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Executive Summaries Mar 17, 2022

Trademarks on the Beverage Market, Alcoholic or Not: Avoid Drinking the Cup

The popularity of local products among Quebecers has dramatically increased in recent years, and alcoholic and non-alcoholic beverages are no exception. Spirits of all kinds, microbrewery beers, wines, ready-to-drink cocktails and seltzers, both alcoholic and non-alcoholic - the variety of products from Québec is growing steadily.

Under these circumstances, companies specializing in beverages must stand out from the competition by using an eye-catching trademark.

Twofold Criteria for Trademark Approval

In Quebec, the Société des alcools du Québec (SAQ) has an approval process for the trademarks of the alcoholic products it sells. Approval is based on an internal process which criteria and application are not available to the public. Nevertheless, it must be kept in mind that these criteria are different from those set by the Trademarks Act.

The Trademarks Act prohibits, among other things, the registration of a mark that:

  • is descriptive;
  • is misleadingly descriptive;
  • is not distinctive;
  • consists, entirely or partially, of a protected geographical indication for a wine or spirit while the one to be marketed under the trademark comes from a place outside the area covered by the geographical indication.

It also prohibits use and registration of a trademark that is likely to be confused with another. In this regard, it is increasingly common to see traditionally alcoholic drinks sold without alcohol, such as non-alcoholic beers. Conversely, it is increasingly common to see traditionally non-alcoholic beverages offered with alcohol, such as tea-based cocktails or alcoholic sparkling waters. Given the evolution of the beverage market, the assessment of the likelihood of confusion must now consider existing marks for both alcoholic and non-alcoholic products.

This means that it is possible for a mark to be approved by the SAQ without meeting the Trademarks Act’s criteria. This may prevent the mark from being registered on the Canadian trademarks database, but also, if the mark is likely to create confusion with another mark, this may lead to the violation of a third party’s rights with the entailing risk of being sued for damages.

On a larger scale, it should also be noted that a mark available for use and registration in Canada will not necessarily be available for use and registration  in other countries and jurisdictions. As Québec’s know-how is gaining a strong reputation internationally, export possibilities may be worth considering from the beginning or at least before starting exporting and verifications of the potential issues relating to use and registration abroad are better made right from the outset..

Choosing and Protecting your Trademark, Step by Step

As soon as a new trademark is being considered, it is essential to:

  • make sure that the mark is available for use in Canada in that it does not infringe on the rights of third parties in an identical or similar mark (the SAQ's approval alone not being sufficient);
  • make sure that the mark can be registered according to the criteria of the Trademarks Act in order tobe able to profit from the reputation developed or to be developed and protect it; and
  • proceed with the filing of the trademark application in Canada and all relevant countries and jurisdictions in order to protect and increase you market share.

Other kinds of products are also subject to rules other than those set out in the Trademarks Act. For example, cannabis products are governed by the Cannabis Act and its regulations. Drugs and natural health products are also governed by specific regulations.

It is therefore important to not only ensure that your trademark complies with the Trademarks Act and is available for use and registration, but that it also meets the specific rules applying.

Our team of trademark specialists is highly experienced, notably in the field of alcoholic and non-alcoholic beverages, and will be pleased to assist you with your trademarks’ availability check and protection strategy in Canada and abroad.

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