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Acceleration of COVID-related Trademark Applications

It is now possible to seek expedited review of Canadian trademark applications for protection of COVID-19 related trademarks. Grounds to receive special treatment of an application include:

a court action is underway in Canada with respect to the trademark;

the applicant is trying to combat counterfeit products at the Canadian border; or

a Health Canada approval for use of the goods or services is in process or completed.

The recent CIPO Practice Notice is located here: http://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr04872.html

Given that regular examination of Canadian trademark applications is currently taking over 24 months, the ability to accelerate should be helpful for applicants in this fast-moving technology field.  Please contact us if you have questions or need assistance with this or other IP matters.

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Protecting your IP Assets as a Part of your Exporting Strategy

Glass Globe In The Shopping Trolley Concept

Intellectual property (IP) rights include various types of intangible corporate assets which you will want to protect and use and exploit on a daily basis in your business.  These include trademarks and design rights, copyright, patents, trade secrets or confidential information, and other categories of rights. Even the smallest companies have such proprietary information and proper protection for these IP assets can enable companies to get the most out of their branding.  As you prepare to export your products and services, there are many considerations that go into the development of a fulsome exporting business plan, and you will want to be sure to have an international IP strategy in place that aligns with your commercial objectives. 

A starting business planning recommendation is to conduct an IP audit.  This consists of assembling a list of key IP items that your company already owns, or might wish to protect in the future, as well as some understanding of their relative importance. You can assemble a basic IP inventory on your own, or you can enlist the assistance of an IP lawyer to help you to assemble this information.  Regardless of how you build it, this will be an important asset for you in the understanding of the relative placement of IP in your company.  With an inventory in hand, international strategic planning can be started.

One of the things that exporters must keep in mind is that the laws of each country are different with respect to the protection of various types of IP.  Certain types of IP assets are protectable, or not, by statutory IP rights or registrations in some countries.  Presumptions of ownership can vary by IP type and country, and the like. For example, the patent law in Europe is different than the patent law in Canada and the US on the patentability of computer software.  In another example, assets registered as trademarks in some countries might be protected by copyright in others. Dependent upon the geographic footprint of your marketing plan, and the nature of IP assets to be protected, localized legal awareness is necessary to ensure that the right protection is understood and used.  Building an IP plan that accommodates local legislative requirements or options is a significant competitive advantage to your company.  This can also help in terms of prioritizing your foreign plan (since virtually no company has an unlimited legal budget and depending upon your overall export decision matrix and the relative strength of local laws, you can try to “get the most bang for your buck” in terms of your legal spend through such awareness).

Particularly where your IP assets are not ideally protectable locally under the law of the country in question, contracts with customers, distributors and other parties become paramount in importance as a supplemental layer of protection (even with respect to trade secrets and other confidential information – customer lists, corporate information etc.).  These are again subject to local law and should be considered with local legal counsel at the time of their creation.

Two other key planning factors in your international IP protection strategy are the timing of your overall market entry plan, local business model, as well as relative costs or budgeting.  Your IP strategy should accommodate your overall business timeline – for example if you plan to be in a particular geographic region in three years, and it will take two years to register and protect your IP assets there, these relative timing indicators can dictate the appropriate times for the triggering of foreign protective actions as well as being used to best inform your budgeting in terms of costs.  Knowing when things need to be triggered and finished, and understanding the nature of the relative timelines can help to develop a most accurate budget of costs and other corporate resources required in this area.  Another timing element to consider, particularly in the trade secret or patent space, is that certain home market decisions about disclosure, filing or otherwise can have positive or negative effects on your ability to protect in foreign markets at a later date, and this should be factored into your planning as well.

As the geographic footprint of your business expands, it is important to ensure that your have taken the appropriate measures in foreign markets to protect your IP assets in order to enjoy the maximum economic benefit of your intellectual creations.  Aligning your IP strategy with the remainder of your business plan, rather than simply protecting IP for the sake of doing so in a list of indeterminate foreign markets, will yield a plan this is more easily understood and executed throughout the organization.  You should consider consulting an intellectual property professional to put yourself in the best shape on these points.

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Restricting availability of time extensions in trademark cases

Sand running through the bulbs of an hourglass

Canadian trademark practitioners and trademark stakeholders of the Canadian Intellectual Property Office (CIPO) will be impacted by a recent policy change in the CIPO related to extensions of time for response to various office requirements.  A new Practice Notice was issued by the CIPO on January 17, 2020 which will have the effect of significantly restricting the availability of extensions of time for responses to various examination reports and requests for information from CIPO to trademark owners.  If you would like to read the Practice Notice in its entirety it can be found at:  http://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr04736.html

Extension of time to respond to Examiners Report:

Effective immediately, CIPO will no longer grant an applicant an extension of time to file an office action response without demonstrating exceptional circumstances supporting the request.  Failing a timely complete response to an examiner’s report or a request for extension containing demonstrated exceptional circumstances within the typically provided six month deadline, applications will be considered in default.

The practice notice outlines a number of categories of exceptional circumstances considered by the CIPO to be satisfactory examples, including the following:

  • Recent change of trademark agent;
  • Circumstances beyond control (sickness, death, bankruptcy etc.);
  • Pending transfer of ownership which would overcome a confusion objection;
  • Opposition or Section 45 – cited trademark is the subject of a pending opposition or section 45 expungement proceeding;
  • The applicant is in process of actively negotiating a consent from the holder of an official mark;
  • The applicant is in process of division of the international Protocol registration on which an application is based and is waiting on IB confirmation of the divisional;
  • A single extension can be requested to provide more time to file a proper response to an objection in respect of an application which is subject of an indication of a potential refusal; and
  • A single extension can be requested to extend the available time to compile evidence of distinctiveness to respond to a non-distinctiveness objection.

Former practice has been that a first extension of time of six months was typically provided without demonstration of exceptional circumstances, for example in cases where counsel were unable to receive instruction for an extended period of time, or cases where international multi-party negotiations were underway.  Practitioners will need to adjust to the non-availability of such extensions, and it would even appear that best efforts to at least partially respond to a report where a complete response is not possible will not be considered acceptable insofar as the practice notice indicates that a complete response is required to avoid the default of an application.

No fee is payable in respect of a request for an extension of time to respond to an office action.

The new extension practice will only apply to office actions issued after January 17, 2020.

Extension of time to respond to s. 44.1 request:

Canadian trademark holders recently began to receive requests from the CIPO pursuant to Section 44.1 of the Trademarks Act to apply the Nice Classification of goods and services to listings of products and services contained in extant Canadian trademark registrations.  This change in extension of time practice will also apply to the response to these section 44.1 classification requests.

A response to a s. 44.1 request is typically due in six months, failing which a registration will be expunged. The only acceptable grounds for exceptional circumstances listed in the practice notice with respect to this type of case, which could result in the ability to justify a single six month extension of time, are the recent change of the trademark agent of the owner, pending transfer request related to ownership of the trademark, or circumstances beyond the control of the person concerned (sickness, death, bankruptcy etc.).  There is a fee payable for request for an extension of time of this deadline which is currently $125.

These changes will be of particular interest to trademark applicants and owners involved in multijurisdictional portfolio management or cases with complicated competitive matrices, where negotiations with third parties or multiple layers of instructing principals are present in cases extending the time required for instructions or response.

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IP Strategy in the Boardroom

Every corporation has and creates IP assets. Occasional strategic review and oversight of IP initiatives by the board of directors is appropriate and important.   The importance of the IP assets of the company fits within the larger context of enterprise strategic planning and the board should ensure that IP strategy is in line with the remainder of the corporate structure and plans.  

Factors defining IP risk profile:

The degree and nature of IP issues faced by a company can vary based on a large number of factors, including:

  1. Industry – companies in some industries will rely more heavily on IP than others and companies in IP-intensive industries will most appropriately see IP strategy and issues visit the boardroom more often;
  2. Competitive landscape – if the corporation is involved in a business vertical where competition relies upon IP protection and IP-based product or service differentiation;
  3. Innovative positioning of the corporation in relation to peers; and
  4. Importance of IP assets of the corporation to the profitability of product or service lines.

What are the questions to ask?

What are the key IP assets:

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Clearance and avoidance strategy:

The sufficiency of IP clearance and avoidance measures and protective considerations in the new product development workflow of the corporation is also a strategic area in which the Board should gain reasonable assurance of management’s plans and operations.

Related to product development and other business development plans of the corporation is the general position which the corporation elects to undertake with respect to their IP portfolio and the IP assets of competitors. One analogy to consider is the placement of the corporation, in terms of the type of IP position taken, along a spectrum anchored at one end by a purely defensive strategy, centred around freedom to operate and avoidance of third party IP rights, to the opposite end of the spectrum in which a corporation elects to take a more offensive strategy centered around intensive capture, development and exploitation of IP assets to either provide more aggressive exclusionary or competitive options or to add value to the company through increasing the size and depth of the IP portfolio.  This analogy of “pinning” the corporation to a point along a strategy scale oversimplifies the issues but is demonstrative of one thinking approach which might be taken both by management in development of an IP strategy as well as by the board in providing oversight and critique of same.

Even in terms of product development and similar issues, if certain new product pipeline items have potential IP clearance hurdles associated with them such as proximity or threat of action from third parties based on pre-existing IP, if those threats approach or exceed the predefined risk appetite or parameters desired by the board, there should be opportunity for the board to consider these items and provide guidance.  These types of issues might occur more often in an “innovation intensive” enterprise, and this is not to suggest that the board should insert their decision making in place of management, but both the board and the executive of the corporation should condition themselves to have a constructive look at these types of items should they arise, and as important as the discussions themselves to identify the existence of the issues to trigger appropriate followup.

Brand threats:

Insofar as the directors bear responsibility to assist management in crisis management and have a responsibility as custodians of the brand of the corporation, the board should be advised when brand-threatening IP issues such as large scale IP litigation or the like arise. Using IP litigation as an example, given the costs as well as the materiality of the potential economic outcome either in terms of damages awarded against a defendant or as a potential revenue item for a plaintiff corporation, management should work with the board to ascertain and provide appropriate ad hoc or periodic reporting in this area.

Summary:

There are many ways in which boards can satisfy themselves that they are applying appropriate stewardship and risk management principles to the IP position of the company, including for example through assigning various IP strategy issues into the ongoing enterprise risk management and monitoring matrix.

The best likelihood of success for IP initiatives which require wide cultural adoption begins with tone at the top, and it will be important throughout a corporation to see and feel that the cultural requirements for an IP capture plan, tech transfer strategy or the like is adopted by and driven down from the highest levels of the corporate hierarchy into the operational corners below.  This begins with and includes initiative, direction and buyin at the board table.

Directors should provide their varied insight and perspective to the development of IP plans at a strategic level, and insofar as the board will ultimately bear responsibility for the value which is or is not generated in the corporation from IP strategy decisions it is also important to gain a level of assurance on management’s development and execution of intellectual property strategy and plans.

Furman IP can help you as a director, board or management to develop and implement strategic management of the IP elements of your corporate strategy.  Let’s chat if you have questions!

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Counterfeiting – what is it and what can you do about it?

Whenever I hear the word “counterfeiting” I think about the scene in the desert in To Live or Die in L.A., where they show up to shut down the counterfeiters only to find nothing left but a washing machine.  The far less gritty definition of counterfeiting though, related to counterfeit merchandise and services, is something that impacts many of us on a regular basis.

What is counterfeiting, you ask?  There are many different definitions – this one from Wikipedia is good as any to outline the term:  “…Counterfeit products are fake replicas of the real product. …The word counterfeit frequently describes both the forgeries of currency and documents, as well as the imitations of clothing, handbags,shoes, pharmaceuticals, aviation and automobile parts, watches, electronics (both parts and finished products), software, works of art, toys, movies.[1] Counterfeit products tend to have fake company logos and brands.”  Counterfeit goods are copies of your legitimate products.  They are sold by others to trade on your goodwill or other IP rights.  In many cases as the notoriety of your company and your brands increases, so does the temptation for people to copy or trade on the goodwill and value of your IP rights and planning to deal with counterfeit products is one area in which many companies can benefit from the deployment of some resources.

What types of products or services might be copied? Virtually anything – everything from the widely anticipated counterfeit consumer fashion goods such as clothing or the like, through to construction materials, safety products and others (I spoke once to a fellow who found out he had a copycat furnace in his house!).  Services can also on occasion be copied  – for example the copycat Apple store in China in which by reports the staff all thought they were working for the real company.  Appreciating the scope of the counterfeiting problem, you might ask yourself what you can do to minimize or avoid its impact on your business.  As with many IP-related business decisions, the resources you dedicate to awareness and enforcement in the counterfeiting area will vary but a starting point is to understand some of the options that you have at your disposal to detect or fight back against these problems.

Grey market goods are products manufactured by you but which are not authorized for sale in a particular market – for example if a distributor in one country to whom you ship product moves it for sale in another market in which you have another exclusive distributor. The product itself is legitimate, but is not authorized for sale in that territory. There are steps which can be taken to provide the best possible legal scenario to deal with grey market scenarios, although a good measure of common sense and positive working relationships with all your channel partners is often the best way to minimize these situations!

MONITORING: HOW TO SPOT COUNTERFEITING

One of the first key elements for a business seeking to implement an anticounterfeiting program is to establish rigorous monitoring in the markets of interest. The monitoring program can become more complex as the geographic footprint of your business expands into multiple countries. Your staff or local distributors in corners of the market can provide feedback and periodic information about what they see in the marketplace, and in certain cases you may also wish to retain local legal counsel or investigative help to proactively monitor activity or particular parties in the marketplace to identify when counterfeit goods or services are entering the market. The best information possible results in your best ability to enforce your rights.

 A related issue in terms of monitoring or establishing an enforcement framework is to ensure that any contracts that your company enters into with local companies, manufacturers, distributors, agents and the like establish the proper relationship of those companies to assist you with monitoring and enforcement as well as to minimize the ability of those companies to themselves become sources of grey or black market goods in the marketplace.  Establishing this documentary framework is something that you can work on with your counsel, to ensure that the extent possible you have created precedent documents and contract templates that you are using that support your monitoring program. You will also potentially need to rely on local legal counsel in the market of interest to ensure that the contract language which is created is best enforceable Oreos most efficiently drafted for the local legal framework of that country.

ENFORCEMENT

Once you have implemented a monitoring program, or a counterfeit or infringement matter comes to your attention, you next need to develop an enforcement strategy.  You will typically have many different options at your disposal to try to stop it.  Depending upon the jurisdiction and severity of the situation, you may have a civil remedy at your disposal (ie. you could sue the counterfeiter or the vendor of the counterfeit goods for infringement of your IP rights), or in some countries and circumstances there is even a criminal avenue by which a criminal case of counterfeiting can be reported.  In Canada there are civili and criminal options available to consider although most rights holders would at present likely find themselves in the civil route for enforcement of their rights.  You can and should rely on your IP lawyer to give you some help to understand and frame your enforcement approach, since the decision is complicated by the type of business, the country or jurisdiction, the severity of the counterfeiting or infringement, and other factors.  Depending upon the level of enforcement that you elect to undertake as well as the potential geographic dispersion of your market again, you may even wish to leave standing enforcement instructions with your local counsel or representatives so that they can upon detection of the presence of counterfeit merchandise simply proceed with enforcement without the need to delay and hopefully in that fashion most quickly intervene.

BORDER CONTROL

One of the primary means in many countries to exclude infringing products from the marketplace are customs and border enforcement mechanisms which exist allowing for the seizure or destruction of infringing goods at the national borders by customs officials. Many export markets, including the United States, have such a scheme in place, and they provide one of the simplest means of local market enforcement where available. In order to use these border control mechanisms it is most often the case that you will need to have registered  your trademarks or other IP rights locally, so given the time involved in completing those registration steps it is best to be prepared in advance. Canada does not currently have such a simple border control mechanism in place, but there is currently federal legislation pending.  The availability and accessibility of border control programs varies  and again there is the need to rely on local legal advice to make sure the best possible approach is taken  to interface the governmental border control mechanisms in particular jurisdictions with your own civil or criminal enforcement program.

PROTECTION AGAINST COUNTERFEITING

Some of the measures which can be taken to minimize the possibility or impact of a counterfeiter on your products and operations include maintaining tight control over your manufacture and distribution channel through appropriate contracts, as well as in some cases copy protection or detection of origin schemes can be implemented, so that with your brand or legitimate products, their source or authenticity can be verified.  There are many different types of copy control or  rights management systems which can be implemented from very simple to very sophisticated. In terms of sophisticated systems, for example, in polymer manufacturing, trace ingredients have been placed in plastic to allow for tracking of the origin of the plastic. In computer software everyone is aware of the various types of digital rights management or license management schemes which are typically implemented with respect to software programs. There is a strong vendor support industry in this area and to the extent that your company wishes to incorporate some type of a copy protection or  control mechanism into your day-to-day distribution plan you can find a lot of good help in this area.

To summarize, there are a number of steps which can be taken to best prepare to deal with possible counterfeit or copycat presence:

  • Ensuring proper distribution or channel contracts, dealing with IP ownership;
  • Registration of selected trademarks, patents or other IP rights;
  • Awareness of local law and requirements for use of customs interdiction or other local enforcement mechanisms;creation and implementation of a internal policing mechanism to detect counterfeit merchandise or services, including building awareness amongst your personnel; and
  • Implementation of copy protection or other schemes to help with identifying original product.

Companies addressing some of these issues in their market development plans will be best positioned to protect, exploit and maximize their own IP positions as their businesses grow. We can help with that. You know what they say about an ounce of prevention…