It was bad enough when Canada Post refused to open up its postal code data and sued Ottawa-based Geolytica, for crowdsourcing its own version of this data for its Geocoder.ca website.

For Canadian companies, postal and zip code data that is openly available in the UK and US costs money and can only be purchased from one source: Canada Post. This data doesn't come cheap, either. When I researched costing in May 2012 the starting price was roughly $5,500.

To a corporation that cost is trivial, but to a smaller company that may wish to provide something like a postal code look-up on its website, this is a big deal. The high cost to begin using the data also limits innovation opportunities for developers who want to incorporate postal code data into geo-location software products.

Now the Ottawa Citizen has reported that Canada Post has added a claim of trademark infringement to its lawsuit against Geolytica ove the use of words postal code.

In its amended statement of claim, Canada Post has asserted that Geolytica violated several sections of the Trade-Marks Act. "The Defendants have, contrary to section 9 and 11 of the Trade-Marks Act, adopted and used in connection with a business, as a trade-mark or otherwise, the Official Postal Codes Mark." They also assert that Geolytica violated sections 7b and 7c of the Trade-Marks Act.

"Section 9 marks are a peculiarity of Canadian trade-mark law. They allow a public authority to protect a so-called 'official mark' so that the public cannot then use it," explains Jonathan Mesiano-Crookston, a lawyer with Goldman Hine LLP who specializes in Intellectual Property.

"But in my view, this provision was not designed to allow a public authority to do what Canada Post has done, which is to obtain a section 9 mark over a routine English phrase, and then use the mark to stop others from offering a particular service," says Mesiano-Crookston. "Canada Post can't claim exclusive rights to the phrase "postal code".  It's simply not in my view an official mark of Canada Post."

This most recent legal action raises other important issues.

While it is understandable that the postal service needs to either find new revenue sources or operate more efficiently to avoid losses as people increasingly shift to electronic messaging, consideration for the global landscape is also important. Which raises some hard questions.

The federal government announced a 12 month open data pilot in 2011, which Minister Flaherty then then extended to a three year open data project on April 11, 2012.

"Open data in Canada describes the capacity for the Canadian Federal Government and other levels of government in Canada to provide online access to internal data in a standards-compliant Web 2.0 way," states the Wikipedia open data entry. "A number of efforts have been made to expose data gathered by Canadian governments of all levels in ways that make it available for mashups."

Mashups are the software applications that enable companies to merge different data sets and systems. For example, a tech start-up might want to create a local business directory that allows users to find companies using GPS and postal code information. Yet with Canada Post's extremely closed, aggressive claim of ownership relating to postal code IP, there is little chance of these innovations taking off unless companies can afford to pay the substantial fee required to access the data.

Should a legislated monopoly be allowed to repress innovation and bully a small Canadian company for finding an innovative solution that enabled it to create its own postal code database? Is it reasonable for a ubiquitous term like postal code to be trademarked?

At CanadaOne we strongly believe that to help Canadian companies stay competitive, postal code data should be included in the open data that is available from the federal government. If Canada Post wants to create a new revenue stream in this space, it should do so by creating and marketing applications that are commercially viable.

Assertion of trademarket ownership for the words Postal Code sets a dangerous precedence.

We would ask Canadian businesses to  send a strong message to politicians in Ottawa urging them to take action to ensure that our businesses are free to use the term postal code without having to worry about being sued by a legislated monopoly.

Update: This article originally noted that Canada Post had applied for the mark in 2005, but that it had not been registered. However, Mesiano-Crookston corrected this statement, explaining that section 9 Marks never proceed past advertisement, due to the fact that they are valid once advertised because of their special status.

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