New Canadian trademark law amendments – business impact

In the summer of 2014 a large series of amendments to the Trademarks Act in Canada received Royal Assent. The stated policy basis for these amendments was to provide alignment between the Canadian trademark regime and international laws, to allow for accession or completion of the implementation of three international trademark treaties to which Canada was a signatory.   The implementation of these treaties and legislative changes will have a significant impact on trademark practice and brand owners in Canada. The following is intended to provide a very basic understanding of the high points of the amendments and how they might impact businesses and brand owners.

 

What are the Treaties Intended To Do:

The three treaties in question have different purposes, which from a very high level can be summarized as follows:

  • Madrid Protocol:  this treaty provides a consolidated international application mechanism by which trademark applicants in signatory countries can potentially file a simplified or single trademark application to protect their trademark to a certain degree in a number of countries at the same time. This mechanism is intended to reduce the complexity of International trademark protection for some applicants, who choose to use this process rather than use the filing of local trademark applications to protect their rights internationally;
  • Nice Agreement:  the Nice agreement imposes a standardized classification of wares and services for use by signatory trademark authorities. Trademark applicants are required to outline in their applications the nature of their products and services, and by using the Nice classification to categorize these applications and registrations, a more standardized International searching approach and mechanism is facilitated. Use of this classification and agreement is also intended to result in the application of more standardized examination standards on the description of products and services in international trademark offices; and
  • Singapore Treaty: This international treaty mandated the streamlining and harmonization of many trademark application procedures to allow for harmonization on the international level of trademark applications. This treaty spoke also directly to the implementation of an International classification regarding wares and services, which is the Nice classification specifically created by the Nice agreement.

 

Highlights of the Amendments:

There are a large number of amendments to the trademark regime and the Canadian Trademarks Act within the proposed changes. From a high level the changes which probably have the most impact on Canadian businesses include the following [not an exhaustive list]:

 

  1. The revised act will provide an expanded definition of a trademark, which is intended to cover a lot of nontraditional categories including moving and three-dimensional marks etc.
  2. The key amendment from the perspective of many trademark professionals in this regime is the removal of the requirement for a trademark applicant to either declare their use or their intent to use the trademark in Canada at the time of filing of a trademark application or at any time. Anyone will be able to file a trademark application for any trademark regardless of any intent to use the trademark, since they do not need to declare their intention to do so
  3. The definition of confusion in the Act is revised to suggest that the use of confusing trademarks need not take place within the same channel of trade. Depending upon its interpretation or application this could limit the past practice of multiple marks coexisting in disparate channels.
  4. Certification marks:  certification marks are a class of trademark registrations available under the Canadian Act which are registered and used to certify the certain standard of the product or service to which they are applied. In the past some companies have elected to seek regular trademark protection as well as certification mark protection where they wish to sell or promote their own products and services as well as to propagate a standard. The definitions around certification marks are revised in this legislation so that a certification mark can only be registered by someone who does not themselves make products or services in the field – presumably to avoid the monopoly or hijacking of industry standards or certification terms by individual vendors.
  5. The term of trademark registrations is shortened to 10 years.
  6. The Registrar of Trademarks can request registrants to reclassify or to provide classification information under the Nice classification for their pre-existing registrations.

The transitional provisions in this legislation are lengthy. The determination of the applicable legislation and regime will be made by and large based upon the date of advertisement of a trademark application.

 

Impacts and Recommendations:

While it is believed that the amendments will cause significant upheaval in Canadian trademark practice for at least a couple of years while they worked their way into practice and the jurisprudence, there are some anticipated benefits to the amendments. These include the streamlining of application processes and the benefits to be obtained from the implementation and harmonization of classification based upon the Nice agreement. Clients who might wish at this point to await the completion or entry into force of these amendments in advance of significantly advancing their trademark strategy include the following:

 

  • Clients or trademark properties who will desire widespread international trademark coverage which is compatible with protection pursuant to the Madrid Protocol;

 

  • Clients who wish to file trademark applications without the need to declare use of the trademark or an intent to use the trademark at the time of filing of the application;

 

With the removal of the use requirement from the application process, the changed system will likely result in large numbers of trademark registrations which cover unused goods and services – this has been the international experience in the Madrid environment. It will be necessary for Canadian companies to conduct additional investigations to verify the possibilities of use of conflicting trademarks in market in advance of the filing or adoption of their trademarks to have clearance comfort, and there will also in addition to the increased cost and complexity in searching and clearance of trademarks be increased complexity, cost and volume of trademark opposition proceedings since oppositions may be the only way for a party to verify the use status of a trademark definitively from a third party who has filed a conflicting application.

 

Of a more time sensitive fashion, there are believed to be a number of clients and client situations in which it may be desirable to contemplate accelerated trademark filing consideration – i.e. certain fact patterns may benefit from the filing of trademark applications under the current regime rather than waiting for the implementation of these other measures. These scenarios include:

 

  • The term of trademark registrations being shortened to 10 years, trademark registrants may wish to proactively renew their trademark registrations within the defined parameters in the legislation to permit for one more 15 year renewal.

 

  • It may be preferable to file trademark applications related to colors or sounds in advance of proclamation of the new sections, to potentially avoid the need to prove acquired distinctiveness under the new legislation. Proof of acquired distinctiveness is often done by the collection and preparation of affidavit evidence which significantly increases the costs and the trademark process. As well, these applications might be required to include territorial limitations based upon the acquired distinctiveness locale;

 

  • Trademark applications which may be desired to be filed covering large numbers of goods and services might be more cost-effective to file in advance of the proclamation of the application of the Nice classification. It is likely that the implementation of the Nice classification would install a class based fee system in the trademark process and as such significant cost savings might be anticipated in cases where large numbers of classes would be included in an application if they were filed now rather than later;

 

  • If it is desired with more certainty to clear trademarks and filed applications to protect them, in advance of the proclamation of these amendments we can still use the use information in the trademark register to streamline the clearance process and provide some degree of additional certainty for clients in selecting or prosecuting their trademark applications;

 

  • Following implementation of the changes it will be possible to obtain registration without use of a trademark anywhere in the world, so it may be beneficial to file as soon as possible to secure a filing date or priority position in advance of trademark squatters who might file large numbers of applications following the implementation of the changes and the removal of the requirement to declare the intention of the applicant at the time of filing regarding trademark usage;

 

  • It is advisable for clients to consider the breadth and scope of their trademark protection before these amendments are implemented.