Trademark Considerations for Credit Unions – Potential Updates to the Bank Act

Author: Kursty Bansley

As part of last month’s unveiling of the 2018 Federal Budget, credit unions can place a prospective tick in their “win” column in the budget’s response to the June 2017 advisory issued by the Office of the Superintendent of Financial Institutions (“OSFI”), which advisory effectively banned non-bank financial institutions (such as non-federally regulated credit unions) from using the words “bank,” “banker” and “banking” (though the OSFI temporarily suspended compliance exceptions for such credit unions as per a news release dated August 11, 2017).

Please see our blog post of August 28, 2017 for further details regarding the suspension.

As part of the 2018 Federal Budget, the government has outlined proposed updates to the landscape of the Canadian financial sector. The win for Canadian non-federally regulated credit unions is specifically outlined on Page 356 as:

“Providing prudentially regulated deposit-taking institutions, such as credit unions, flexibility to use generic bank terms, subject to disclosure”…

These are proposed changes, and will need to be formally implemented by way of amendment to the Bank Act, or another Act of Parliament.

How does this affect non-federally regulated credit unions: Considerations for current, future and prospective branding and marketing initiatives

As part of the suspension of the original OSFI advisory, all credit unions are currently able to continue to use the terms “bank,” “banker” and “banking” on all public signage, marketing materials, advertising, legal documents and websites. However, non-federally regulated credit unions are technically still precluded from registering Canadian trademarks which contain generic banking terms with the Canadian Intellectual Property Office.

Subsection 983(s) of the Bank Act, together with Paragraph 30(i) of the Trademarks Act, prevents the Registrar of Trademarks from accepting trademark applications including the terms “bank,” “banker” and “banking” unless the Applicant is authorized to do so by way of the Bank Act, or any other Act of Parliament. 

The current practice of the Canadian Intellectual Property Office has thus been to reject trademark applications by non-federally regulated credit unions which utilize generic bank terms, as they are not listed as a “bank” in the schedules of the Bank Act.

Assuming the proposed updates permitting credit unions to “officially” use generic bank terms are approved and implemented by the Government, all credit unions will be able to seek official trademark protection for their word-marks, slogans or logos which use “bank,” “banker” and/or “banking.”

Taking Stock: Assessing and Updating Your Trademark Portfolio  

In preparation for the potential amendments to the Bank Act, or another Act of Parliament, authorizing credit unions to use generic banking terms, credit unions should consider taking stock of their existing trademark portfolios, which may suggest filing of formal trademark applications for any unregistered trademarks, or making updates to any historical or dated trademark registrations.

Of further note, credit unions should also consider:

  • Reviewing public signage, marketing materials and websites to determine any common law marks which may be in use that would qualify as a trademark, and that should be protected by way of a federally registered trademark.
  • Performing searches of the Canadian Trademark Register to ensure that the proposed trademark meets the registrability criteria of the Canadian Trademarks Act.
  • Performing common law searches to assess whether a third party has pre-existing, unregistered rights to a similar word mark, tagline or logo.

Trademark rights in Canada are acquired through use. If a third party is already using the desired trademark (or a confusingly similar variation thereof), it is important to identify any potential risks prior to adoption and use of a trademark, or continued use of a trademark using a generic banking term.

As non-federally regulated credit unions have historically been precluded from obtaining formal registration of trademarks containing generic banking terms, many have been using these terms in common law, and due diligence in the form of pre-screen searching may be prudent. Please speak to a member of our trademarks team directly for more information regarding pre-screen clearance options.

The Federal Budget released on February 27, 2018, did not contain any specific direction in respect of a timeline for implementation of the formal authorization for credit unions to use “bank,” “banker” or “banking.” The current timelines for only the initial examination of a trademark application with the Canadian Intellectual Property Office is nearly 12 months from the date of filing.  With these delays at CIPO, and in contemplation of the aforementioned amendments to the Bank Act (or some other Act of Parliament), you may wish to be proactive in assessing your organization’s needs for formal trademark protection.

If you have any questions regarding trademark implications, please do not hesitate to contact a member of our Trademarks teamIf you have any questions regarding Credit Unions and Co-operatives, please contact a member of our Credit Unions & Co-operatives team

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.