Today’s economy is driven by innovation, and the proper protection of innovation is vital.
This chapter of Doing Business in Canada provides an overview of Canada’s intellectual property regime in five key areas: copyright, industrial designs, patents, trademarks and the enforcement of IP rights.
Canada is a signatory of the Berne Convention, and has acceded to the principal multilateral treaties seeking to harmonize copyright protection around the world. Accordingly, foreign businesses wishing to do business in Canada will find many similarities between their domestic copyright laws and those in Canada.
Nevertheless, Canadian copyright laws do possess certain subtleties that should be noted. In particular, for any work to be exploited in Canada, it is important to ensure that the chain-of-title has been properly secured in accordance with Canada’s Copyright Act.
It is also noteworthy that a significant copyright reform bill was recently passed by Canada’s Parliament and introduced into law.
a. What can be protected?
Copyright protection extends in Canada to any original literary, dramatic, musical and artistic work. These terms are given broad definition — for instance, computer programs fall within the concept of “literary” works. Copyright can also subsist in other subject matter, such as sound recordings, broadcast signals and performers’ performances.
b. How is copyright protection obtained?
In Canada, copyright arises automatically upon the creation of an original work. An original work is one that has not been copied from another source, and that is otherwise produced through the exercise of non-mechanical skill and judgment.
c. What rights are conferred?
Copyright in relation to a work means the exclusive right in Canada to reproduce, publish and perform in public the work, or any substantial part thereof. The broad concept of reproduction includes many individual rights, depending on the type of work. For example, in the case of a dramatic work, the right of reproduction includes the sole right of converting it into a novel or other non-dramatic work.
Authors of original works enjoy certain moral rights that they can assert. They enjoy a right to be associated with the work where reasonable in the circumstances as its author by name or pseudonym, and the right to remain anonymous. They also enjoy the right of integrity, meaning that the work cannot be modified or used in association with a product, service, cause or institution to the prejudice of the author’s reputation.
d. How long does copyright protection last?
Generally, copyright protection lasts in Canada for 50 years following the death of the author, though the term of protection may vary depending on the circumstances of creation and publication.
Moral rights for a work last for the same amount of time as the copyright protection.
e. Who is the author of the work?
The term “author” is not defined under the Copyright Act,but it is understood to mean the person or persons from whom the original expression originates. For most works in Canada, an “author” must be an actual person, which is true even where a work is made pursuant to a contract.
The concept of “work made for hire” does not exist here. An employee or contractor will remain the work’s author even if ownership of copyright comes to vest in the employer or contracting party.
f. Must copyright be registered?
Registration of copyright is optional in Canada and is not necessary to enforce a work in Canadian courts. However, registration does confer certain presumptive benefits in that it will be deemed evidence of copyright subsistence and ownership, as described in the registration. As well, a defendant will not be permitted to assert a lack of knowledge of copyright subsistence in the case of a registered work, and this increases the monetary remedies available to a plaintiff who establishes infringement.
g. Who first owns the copyright?
Generally, the author of a work is the first owner of copyright. An important exception to this principle applies for works created in the course of an employment relationship — where copyright will be first owned by the employer, unless the parties agree otherwise. Where a work is created by joint authors, the copyright will be owned jointly, as determined by the Copyright Act. In Canada, works created under the direction or control of a government department are subject to Crown copyright owned by the government, and are not works deemed to be in the public domain.
h. How is copyright assigned or licensed?
Copyright can be assigned freely in whole or in part, but no assignment is effective in law unless it is in writing and signed by the copyright owner or its duly authorized agent. The same requirements apply to making an effective exclusive licence. Non-exclusive licences and permissions do not need to be in writing, although documenting them is highly recommended.
Moral rights of an author cannot be assigned but may be waived. Notably, assigning the copyright in a work does not, in itself, necessarily constitute a waiver of the moral rights therein.
i. Fair dealing and other exceptions
Canada’s Copyright Act provides that a number of specific activities do not infringe copyright. Most of these activities are very specific and apply only in particular, defined circumstances. In contrast, the concept of “fair dealing” has been defined more broadly as a “user right.”
In Canada, it is not an infringement of copyright to engage in fair dealing with a work for the purposes of research, private study, criticism, review, education, parody, satire or news reporting — although certain requirements to credit the work’s author and source must be met for some of these purposes. These permitted fair-dealing purposes are exhaustive, and conduct must fall within one of the categories mentioned above (and also be fair) for fair dealing to apply.
j. Are there copyright collectives in Canada?
Canada has a long history of administering copyright protection through copyright collectives, and a well-defined statutory regime governing these collectives is now codified in the Copyright Act. There are several copyright collectives operating in Canada, which address many of the copyright rights conferred under the Copyright Act.
k. How does technology fit into the mix?
Recent amendments now in force prohibit the use or sale of technology that circumvents digital locks — also called technological protection measures, or TPMs. Other amendments now in force put in place a “notice and notice” regime for Internet service providers (ISPs) and search engines that, if followed, should limit their exposure to infringement claims.
2. Industrial designs
It is often said that beauty is in the eye of the beholder. While many competitive products share similar functional features, industrial design aspects often set these products apart and serve to attract (or repulse) a customer’s eye.
When knock-off producers can’t afford to reproduce the functional features or qualities of the genuine article, the visual aspects are relied upon to catch the buyer’s attention. To cite another classic cliché, imitation is the sincerest form of flattery — but some look-alikes are just too hard to take. Industrial design protection extends to address these issues and more.
a. What is an industrial design?
An industrial design relates to those features of a finished article that appeal to the eye. Such visual features may include aspects of shape, configuration, pattern and ornamentation applied to the finished article, whether alone or in combination. Functional features, materials of manufacture and methods of use are not protectable by industrial design registration — patent or other protection should instead be considered.
Industrial design and copyright are often confused as providing similar protection. Though they can overlap in scope, often they do not, and proving copying to enforce copyright can be difficult. Copyright generally extends to protect literary, artistic, dramatic or musical works, some examples of which may be incorporated into the design of an article — such as a sculptural shape or an artistic graphical image. Care must be taken when assuming that copyright protection applies, as copyright protection may cease once 50 or more articles incorporating the work are produced.
b. Why register an industrial design?
Unlike some other jurisdictions, Canada does not offer protection for unregistered designs, per se. Other IP rights may apply, such as copyright and/or passing off.
Registering a design with the Canadian Intellectual Property Office (CIPO) assists with a legal claim to ownership, and provides the owner with the right to prevent others from making, importing, selling or renting articles incorporating the registered design or a substantially similar design.
c. Who can apply to register?
An applicant for a registered design in Canada must be a proprietor (i.e. owner) of the design. While the author of the design may be a proprietor, if the design was made for another person under a contract, that person is the proprietor and proper applicant. If an employee authors a design in the course of employment, it is owned by the employer. Care should be taken to obtain proper ownership of the design — such as by way of written assignment — especially when one hires a company to produce a new design or otherwise purchases a design from someone else.
When more than one author creates a design, joint proprietorship should be investigated.
d. When to file an application
Under Canadian law, early filing is encouraged as only original designs may be protected. If an author has created a design and has made it available to the public — or if it is the subject of a Canadian application — this may prevent other similar designs from being registered. The date of creation or authorship is not important when determining who is entitled to register the design.
While an application does not need to be filed in Canada before the design is made publicly available anywhere in the world, the applicant is given a one-year grace period to file in the country. The application must be on file in Canada by the end of the grace period, regardless of whether a priority claim to an earlier field application was made.
e. Term of protection
The term of protection for a registered design is a maximum of 10 years from the date of registration, provided a renewal payment is made at the fifth anniversary — or within any grace period thereafter.
f. Should a search be conducted?
Like patents and trademarks, a pre-filing search or pre-product introduction search is often indicated. Design searches assist with the analysis of whether or not the proposed design is registrable — i.e., is it a sufficiently original design — and whether the making, selling, etc., of the design may infringe the design rights of another.
Unlike patents and trademarks, design applications are kept secret by CIPO unless — and until — the design is registered.
g. The application process
A design application includes the following elements:
- Name and address of the applicant/proprietor.
- Title of the design, which is the ordinary commercial name of the article to which the design is applied.
- A description setting out the visual features of the design.
- Sufficient views, in drawings or photographs, of the complete article to represent all the visual features of the design set out in the description. When more than one figure is included, the figures are numbered and a brief description of the figure is included.
If the applicant does not have an office or place of business in Canada, the name and address of a representative in the country is also necessary.
A filing fee is not a filing date requirement. Presently, the filing fee is $400 plus $10 per sheet for each sheet of figures over 10 sheets.
Design applications are examined for formalities and then originality. One or more office actions may issue raising objections to the application. A period of time is provided to reply and an extension of time is available at no government charge.
If the application is allowed, the design proceeds to registration without notice to the applicant.
If no complications are encountered, registration may be obtained in about nine months. Publication (registration) by CIPO may be deferred upon written request and payment of a fee.
A refusal to register a design may be appealed to the Patent Appeal Board and then, if necessary, the Federal Court of Canada.
Drawing requirements — in terms of number of views, format, style and quality — are similar to the United States’ requirements, rather than the more lax requirements of a community design in Europe, for example.
Broken lines may be used to illustrate a portion, or portions, of the article that do not form part of the design. A single view showing environment is permitted. Cross-sectional, enlargement, fragmentary and other views may be permitted, following CIPO’s style guide. Photograph requirements are also similar to U.S. requirements. Colour may be included in a photograph, but colour per se is not a feature of a design in Canada.
The application may show more than one variant (embodiment) of the design, provided that the variants do not differ substantially from one another. However, CIPO’s practice does not permit variants to coexist in a single application where portions of the article appear differently in the variants through the use of broken lines. Divisional applications are only permitted when a design application is filed showing more than one design.
A priority claim may be made if a prior application was filed in another qualifying jurisdiction to register the same design within the previous six months. The priority application details — i.e., jurisdiction, filing date and application number — must be provided to CIPO before the expiry of the six-month period. A certified copy of the priority application is not required unless requisitioned by CIPO, which rarely occurs.
h. Canadian adherence to the Geneva Act of the Hague Agreement
Canada has taken steps to amend its legislation to adhere to the Geneva Act of the Hague Agreement to accept international applications — as office of the applicant’s Contracting Party — and international applications filed elsewhere that designate Canada. Changes to the regulations are still required and currently remain unavailable. CIPO is not expected to be in a position to handle any Hague applications until late 2016 at the earliest.
Canada enjoys a vibrant economy and a culture of technological innovation in areas such as communication, Internet-related devices and software, clean and renewable technologies, tools and methods used in the harvesting and processing of natural resources, and agricultural and pharmaceutical products and practices.
Canada is a signatory of the Paris Convention, and has acceded to the principal multilateral treaties that seek to harmonize patent protection internationally. Canada also benefits from IP bilateral agreements with a number of G-20 members. Accordingly, foreign businesses pursuing business in Canada will find many similarities between their domestic patent laws and those governing Canada.
By their very nature, patents provide their owner with an exclusionary right to an invention. It is natural for companies to capitalize on their research and development expenditures to protect their competitive edge in the Canadian marketplace. However, Canadian patent laws and regulatory practices do possess certain subtleties that should be noted. Accordingly, foreign companies need to be aware of unique aspects of Canadian patent law and CIPO practice, which can significantly influence the scope and costs of obtaining patent protection in Canada.
In particular, care should be taken to ensure that applicable patent protection has been properly secured for any significant company technologies to be exploited in Canada. It is important to take note of the unique Canadian patent system offerings, such as different examination acceleration programs, factors affecting patent filing ability and patent examination advantages — any of which may be used to maximize Canadian patent coverage.
a. Acceptable subject matter for patent protection
It is important to recognize that most, but not all, technology may be patentable in Canada if given careful consideration from a Canadian perspective.
A Canadian patent may be obtained for any new invention, including processes, machines, methods of manufacturing or a composition, or any new and useful improvement to one of the above that is applicable to industry. The key is that there must be at least one new and innovative element to the invention or improvement. That being said, Canadian patents cannot be issued to protect a scientific principle or theorem in the abstract without a practical application.
Developments in Canadian patent law have confirmed that business methods are currently patentable in Canada, which provides for an increased scope of patent protection in computer-related arts concerning some forms of software and business processes.
Claim format and content can make a big difference between acceptance or rejection for certain technologies. For example, methods that provide practical therapeutic benefits to subjects are considered “methods of medical treatment,” and are not patentable in Canada. However, the content may be redrafted to instead claim an allowable “use.” Also, higher life forms — such as mice, or other mammals, and plants — are not patentable, but a higher life form may be protected by directing claims to a cell consisting of patentable nucleic acid.
It is important to note that support for the required claim form or content must be found in the patent application description as filed in Canada. Therefore, consideration should be given to the way in which the subject matter is described in order to best capitalize on Canadian patent protection for the invention.
Another important consideration for Canadian patent protection is innovation associated with professional skill — i.e., those personal skills reflecting learned behaviours that can be improved with practice and are prone to refinement through personal experience. A Canadian patent application seeking protection for a professional skill will ultimately be rejected by CIPO. The professional-skill distinction can have important ramifications for the patentability of a company’s innovations, so close attention should be paid to the description and claim format in order to avoid rejection.
b. Process to obtain patent protection
The granting of Canadian patents is within the exclusive jurisdiction of the Canadian federal government — under the control of CIPO — and is governed by the Canadian Patent Act and Patent Rules.
Patent protection is requested by filing a formally prepared application with CIPO, which should include background, description, drawings and claims that provide sufficient detail of the invention and its operations for a notional person skilled in the area to create it. Also included in the filing are the requisite CIPO patent application fees and details concerning the invention’s inventor(s).
Once filed, the patent application’s claims are examined by an assigned patent examiner for novel, inventive and industrial-applicability considerations in view of pertinent technology publicly available before the filing date, as well as any format considerations. Once deemed allowable by the patent examiner, the patent is issued after payment of the patent issue fee.
c. Patent rights and terms conferred by patent issuance
Enforcement of an issued Canadian patent can be obtained from the Federal Court of Canada or the Canadian provincial courts.
A Canadian patent is a monopoly granted by the Canadian government that affords the patent holder an exclusive right to manufacture, sell or use an invention throughout the country for a period of 20 years from the date of the application. A patent owner or licensee may bring a court action against someone who infringes on the Canadian monopoly to the invention claimed by the patent.
d. Ownership of a Canadian patent
Generally, the individual inventor that contributed to the invention claimed in the patent is the first owner of the patent. An invention created by joint inventors would be jointly owned. An important exception to these principles applies for inventions created in the course of an employment relationship, where the owner would be the employer unless the parties agree otherwise.
e. Transferring of patent ownership through assignment or licence
Patents can be assigned freely in whole or in part, but no assignment is effective in law unless it is in writing and signed by the current patent owner or owners. In the case of joint ownership, it is recognized that assignment by one party cannot dilute the existing patent ownership rights of the other party — unless there is an agreement to the contrary. The same requirements apply to make an effective exclusive patent licence. Non-exclusive licences and permissions do not need to be in writing, although documenting them is highly recommended.
f. Cost reduction through deferred or reduced patent fees
Patenting an invention in multiple jurisdictions can significantly escalate the costs to protect the technology. Seeking patent protection in Canada provides an opportunity to defer and reduce these costs relative to other jurisdictions.
In Canada, the examination of a patent application is not automatic upon filing and must be requested by the applicant. Requesting examination of a patent application can be deferred for five years from the Canadian application filing date. During this time, the applicant can further assess the best manner in which the patent application should be pursued without incurring significant costs. An advantage of delaying examination is that examination results from corresponding patent applications in other countries can be influential in the Canadian examination process, and can expedite prosecution of the Canadian application at reduced cost.
An advantage to help maximize patent coverage for a Canadian patent is that there is no limit to the total number of claims, or the number of independent claims, included in a patent application. There are also no restrictions on the use of multiple dependent claims — i.e., those claims that reference more than one claim — and no excess claim number or multiple dependent claim surcharges. The only surcharge that may impact the number or content of claims is a nominal excess-page printing fee for those patent applications exceeding 100 pages in length.
Furthermore, Canada has a “small entity” designation that allows businesses employing 50 or fewer employees and universities to pay reduced patent application filing, examination and annual-maintenance fees.
g. Accelerated examination program for designated green and clean technology patents
Examination of a Canadian patent application based on clean or green technology can be accelerated to reduce the time to obtain patent protection. To apply for accelerated examination, the applicant must file a declaration indicating that the application relates to commercial technology that would help to resolve or mitigate environmental impacts, or conserve the natural environment and resources.
There is no government fee associated with requesting accelerated examination of green- or clean-technology patent applications. Accordingly, companies involved in clean or green technologies should consider this route to obtain accelerated Canadian patent protection.
h. Accelerated examination programs under patent prosecution highway (PPH) initiatives
Another instance in which Canadian patent protection may be accelerated is where patent protection has already been obtained in other jurisdictions.
Canada co-operates with a number of other partner countries in patent prosecution highway programs. Through this scheme, an applicant with at least one patent claim that has been found allowable by a partner office in one jurisdiction can have the corresponding patent application examination advanced in the partner office of another jurisdiction. This allows patent results obtained in other countries to be used to streamline examination in the corresponding Canadian patent application or, alternatively, allows the Canadian patent application to be used to streamline examination in another country or countries.
i. Advanced examination of Canadian patent applications
Accelerated examination of a patent application can also be obtained by the applicant or any other person who alleges that failure to accelerate it will prejudice their rights. This is typically used in situations where a pending patent application is perceived to be infringed, but the applicant may use it more broadly to expedite the examination process in other situations.
The process of accelerating examination is relatively straightforward and inexpensive. It is granted automatically in response to a request containing a broad affirmation that the failure to advance the examination could prejudice that person’s rights, as well as the payment of a small fee. In order to request advanced examination, the contents of the Canadian patent application must be open to public inspection — i.e., published by CIPO — but this can be requested alongside the advanced examination request where required. An advantage of the advanced examination request is that there is no need to provide any evidence or details to support the affirmation. Currently, an advanced examination procedure typically results in the issuance of a first examination report within three months of the advanced examination request.
j. Acceptable delays for patent application filing in Canada
Similar to most other countries, Canada is a first-to-file jurisdiction, meaning a patent is issued to the first inventor to file a patent application. To obtain a Canadian patent and avoid later technical challenges to its validity, it is important that the application is drafted in the correct form and with a sufficient and enabling description of the invention. It is also recommended that the subject matter of the invention not be disclosed to the public until the application has been filed.
Once the decision has been made to file a patent application, it is important to note that patent systems around the world have strict patent application filing timelines. Failure to meet these filing timelines may result in a loss of the right to obtain patent protection in certain jurisdictions.
However, the Canadian patent system offers a few acceptable delays for filing, such as a 12-month grace period, 12-month late international Patent Cooperation Treaty (PCT) filing and no on-sale bar.
The 12-month grace period provides the opportunity to file a patent application within 12 months of the applicant disclosing the invention to the public. Accordingly, the Canadian patent system offers filing flexibility in providing this 12-month grace period — measured from the time of the first public disclosure of the invention to when the formal patent application is filed in Canada. It should be noted that a provisional patent application filed in Canada, or elsewhere, does not negate the requirement to have the Canadian application filed within the 12-month period measured from the first public disclosure.
For international PCT patent applications, an applicant can file in Canada as a national entry of a PCT patent application up to 42 months after the PCT priority date simply by filing a late national entry request and paying a nominal fee. This late national entry provision allows the applicant an additional 12 months after the standard 30-month PCT national phase entry deadline.
In some jurisdictions, such as the U.S., if a product or service has been “on sale” for more than 12 months prior to filing the patent application, it may be barred from obtaining patent protection in that jurisdiction. However, in Canada, early market entry may not bar entitlement to patent the marketed products — so long as the sale is not considered an enabling public disclosure of the invention made more than 12 months prior to the filing of the Canadian patent application.
k. Procedural flexibility in obtaining Canadian patent protection
The examination process before the Canadian patent office is relatively flexible compared to other jurisdictions, and this flexibility can help maximize patent scope and minimize prosecution costs.
For example, during the examination of the patent application, voluntary amendments to the claims or other parts of the application may be filed at any time in Canada. As well, final examination reports are only rarely issued at times when it is clear that the examiner and applicant have reached an impasse. This allows for ample opportunity to negotiate with the examiner.
Furthermore, when interpreting the patent claims, the courts may not consider any submissions made by the patentee during the application prosecution when a patent is subsequently litigated. This is in contrast to other countries, where a patentee may be estopped from taking a position with respect to the scope of the claims that is contrary to the one taken during prosecution.
l. Reduced relationship potential between patent applications of opposed parties
Circumstances can arise where one Canadian patent application can be affected by another, such as in situations where both applications are directed toward similar subject matter. It does not make a difference whether the applications are owned by the same party or by opposing parties.
In Canada, there is no interference or opposition procedure to challenge a competitor’s co-pending patent application — so there is limited opportunity for one party to oppose a patent being granted to another.
Furthermore, Canada does not use terminal disclaimers between applications owned by the same party. As a consequence, the applicant must amend the claims of the applications to distinguish one from the other.
Although there is no Canadian continuation application procedure (unlike in other jurisdictions), the applicant can file either claim amendments to a further invention any time before allowance, or a divisional application any time before issuance of the parent patent.
The preferred practice for filing divisional applications in Canada is to include or add all desired claims, in order to allow the Canadian examiner to determine whether separate inventions are claimed. This attempts to avoid later allegations of “double patenting” in the divisional application, and allows a broader range of inventions to be claimed within a single application.
A trademark is a word, logo, sound or other business device that serves as a distinctive indicator of the source of particular goods or services. In Canada, while trademarks do not need to be registered to be protected, the scope of rights afforded by registration and the available means of enforcement are greater and more robust than for unregistered trademarks.
As such, trademark registration is a good investment for any owner who plans to use or protect a trademark in Canada. It must be noted that a trademark registration in another country with no use or reputation in Canada conveys no protection in Canada.
Canadian trademark law shares many similarities with U.S. trademark law, but also has its own particularities. As registering a trademark under the Canadian Trademarks Act can be technical, it is advisable to consult a lawyer or agent with expertise in this area to oversee the process and advise on protecting and licensing trademarks in Canada.
a. Registered and unregistered trademarks
If an unregistered trademark has been in use and possesses a reputation or goodwill in Canada, the common law will protect it under the doctrine of passing off. However, the scope of protection for unregistered trademarks is generally narrower than that for registered trademarks. Protection for an unregistered trademark is generally limited to the geographic boundaries of its established goodwill or reputation.
On the other hand, obtaining a registration for a trademark confers many advantages, including the exclusive right to use the trademark across Canada, without geographic restriction, in relation to the goods or services specified in the registration.
Registration can be obtained for a trademark in relation to goods and services. In Canada, unlike in many other countries, a single trademark registration can cover multiple classes of goods and services.
Business names may be registrable as trademarks if such a name is also used as a trademark in association with goods or services — in other words, when the business name is also used to distinguish a product or service of one company from that of another. If a business name is not used as a trademark, it may nonetheless be protected under the doctrine of passing off in a similar manner to an unregistered common law trademark.
In Canada, there is no formal requirement for the use of trademark notices such as ® or TM. However, the use of such notices can be helpful when asserting something as a trademark. When the trademark is being used under licence by a third party, the use of similar notations to direct consumers to a legend (stating the owner’s name and that the mark is being used by a third party under licence) is highly recommended, as it gives rise to a statutory presumption of proper licensing.
b. Entitlement, prosecution and opposition
There are numerous procedural and substantive requirements for the application, processing and registration of a trademark in Canada. Before applying for a trademark, it is advisable to conduct a trademark search to ensure that the trademark is registrable and that the applicant is the party entitled to the registration of the trademark.
There are currently three possible bases for registration of a trademark in Canada: the use of the trademark in Canada, the registration and use of the trademark abroad, or the proposed use of the trademark in Canada. Resolution of competing claims to a trademark will likely depend on which party first used or made the trademark known in Canada, or was the first to file an application on the basis of foreign registration or proposed use, depending on the circumstances. Recent legislative changes that are expected to come into force sometime in 2017 will remove the requirement to state a basis for Canadian applications.
Prior to registration, it is possible for a third party to oppose an application for a trademark on specific listed grounds, such as confusion or technical defects in the application. In Canada, technical grounds can be fatal to an application with no opportunity to remedy them, further underlining the need for marks to be prosecuted by experienced trademark counsel.
c. Term of trademark protection
Registered trademarks currently enjoy a 15-year term renewable upon payment of a fee. No proof or declaration of continuing use is required. Recent legislative changes that are expected to come into force sometime in 2017 will reduce the renewal period to 10 years.
Nevertheless, registered trademarks are liable to be expunged from the register after an initial grace period if — after a request to show use by the registrar or any other interested party — the trademark owner cannot show that the trademark has been “used” (for the purposes of the Trademarks Act) during the previous three years.
d. Assignment and licensing of trademarks
The Trademarks Act allows registered trademarks to be assigned. Since trademark registrations in Canada can cover multiple goods or services, it may be possible to only partially assign a trademark with respect to some of the goods or services — provided there would be no likelihood of confusion between the two resulting registrations. Territorial assignments of registered marks are generally not permitted under the Trademarks Act.
Canada also permits the licensing of trademarks, provided certain conditions are met. For a trademark to be properly licensed and to avoid the risk of invalidity, the trademark owner must control, under the licence, the character or quality of the associated goods or services. While trademark licences can be both oral and written, a bare assertion of control or mere evidence of corporate control of a subsidiary will be insufficient and may render the trademark invalid.
e. Use of trademarks in Québec
It is important for all trademark owners to appreciate that special rules apply to the use of trademarks in Québec, due to the Charter of the French Language (the Charter) in that province. The Charter provides that every marking on a product or document, as well as public signs, posters and other commercial advertising, must be drafted in the French language, though it may be accompanied by a translation.
However, a regulation in the Chartercreates an exception for certain trademarks: a “recognized trademark” may be used exclusively in a language other than French, unless a French version has been registered. If a French version of the trademark has been registered, it must be used instead.
In the past, both unregistered and registered trademarks have been held to be covered by the exception. However, in the absence of a registration, it may not be possible to prove the existence of a trademark to the satisfaction of the authorities. L’Office québécois de la langue française, the body that is responsible for enforcing the Charter, takes the view that the “recognized trademark” exception generally requires registration. The requirement is a commercial reality in Québec, and extends to the packaging of goods that are sold in that province whether or not they are also intended for other markets.
Trademarks and other terms composed of descriptive elements are most likely to be challenged. Therefore, businesses operating (or selling goods) in Québec that wish to make use of the exception should register their trademarks — especially where the mark contains descriptive terms — and would be well-advised to seek guidance from Canadian trademark counsel as to compliance with the terms of the Charter and the current position of l’Office.
5. Enforcement of intellectual property rights
IP rights — including patents, trademarks, copyright and industrial designs — are generally enforced through proceedings brought before the Federal Court of Canada. While the provincial courts have concurrent jurisdiction for enforcement of IP rights, the country-wide jurisdiction of the Federal Court gives it the ability to grant an injunction throughout Canada in a single proceeding. Over 95 per cent of all IP cases are brought to the Federal Court.
The only exception is where the IP right relates to trade secret law, which, as a matter of property and civil rights, can be enforced only in the provincial courts. For passing off matters, while only the provincial courts can enforce the common law right, the Federal Court has jurisdiction under Section 7 of the Trademarks Act to hear essentially the same action.
The Federal Court of Canada consists of approximately 38 trial court judges who can sit anywhere in Canada. While the Federal Court has its headquarters in Ottawa, it is essentially a circuit court, with judges travelling throughout the country to hear cases. Any member of any bar of Canada can appear in the Federal Court, regardless of the province in which the court is sitting. A successful plaintiff is generally entitled to its damages and a permanent injunction — assuming the right has not expired — and some of its legal expenses. Depending on the IP right, the successful plaintiff may also elect to appropriate the infringer’s profits.
While Canadian courts may grant interlocutory injunctions, they are rarely granted in patent, copyright and design matters, and only occasionally granted in trademarks. Proving irreparable harm — i.e., harm that is not compensable in damages — is key to obtaining an interlocutory injunction.
a. Patent enforcement
In general, patent litigation proceedings are commenced with a Statement of Claim and proceed through oral and document discovery, leading to a trial by judge alone.
Proceedings by way of action generally take between two and four years to get to trial. A right of appeal is available to the Federal Court of Appeal and, with leave, to the Supreme Court of Canada.
Frequently in infringement proceedings, a defence and counterclaim of invalidity are also raised by the defendant. Alternatively, a potential infringer could commence a proceeding seeking a declaration of non-infringement and/or impeachment of the patent.
i. Section 55.2 of the Patent Act
Separate and apart from actions for infringement, a procedure is available for certain pharmaceutical patents that is similar to Hatch-Waxman Act proceedings in the U.S. Under this provision, a generic drug manufacturer seeking to come to market by reliance on an originator’s Notice of Compliance must address any patent that has been listed with the minister of health. The initial step is to forward a Notice of Allegation by the second person, at which point the patentee has 45 days to commence an application seeking an order that prohibits the minister of health from issuing a Notice of Compliance to the generic.
These proceedings are summary in nature and are not full actions. Consequently, there is no right of discovery. Furthermore, because they are summary in nature, any decision is not final, and an action for infringement and/or impeachment may be commenced separately and apart from the Section 55.2 proceeding.
b. Trademark enforcement: Passing off, infringement and depreciation of goodwill
The owner of an unregistered trademark may enforce its rights through an action for passing off. To succeed, the owner of the unregistered mark must show the following:
- That the owner has a commercial reputation or goodwill created through use of its mark
- That another person has sold goods or services in a way that misrepresented them as originating from the trademark owner
- That the owner’s reputation or goodwill has been damaged
Mechanisms for enforcing a registered trademark provide a greater ambit of protection than those available to an unregistered trademark. In addition to an action for passing off, the owner of a registered trademark may also bring an action for trademark infringement or depreciation of goodwill.
In the Federal Court, trademark owners may also enforce their rights by means of a summary proceeding called an application. An application proceeds on a paper record and does not involve any discovery process.
The remedies available against a party who infringes a trademark or depreciates the value of its goodwill include injunctive relief, monetary damages or profits, as well as an order for the destruction of the infringing articles.
Recent amendments to the Trademarks Act also make certain types of trademark infringement and counterfeiting criminal offences punishable by fine or imprisonment.
c. How is copyright enforced and what relief is available?
In Canada, copyright can be enforced by either an action with trial or by a summary application proceeding in the Federal Court. An application proceeds on a paper record and does not involve any discovery process.
An exclusive licensee may commence proceedings in its own name to enforce its rights, but will generally be required to join the copyright owner as a party unless the court orders otherwise.
Upon proof of infringement, a copyright holder may obtain a broad range of remedies, including an award of damages, an accounting of profits, permanent injunctive relief and an order of delivery-up of infringing materials.
At any time prior to judgment, a plaintiff can also elect to recover “statutory damages” instead of other compensatory monetary remedies. (The right to seek punitive damages is not affected by the selection of statutory damages). The maximum award of statutory damages is $20,000 per work infringed. A lower cap of $5,000 applies to non-commercial infringements.
The Copyright Act also makes certain types of copyright infringement a criminal offence.
d. Industrial design
Industrial designs are also enforced via an action for infringement in a manner similar to that set out for copyrights, trademarks and patents. With respect to industrial designs, infringement can apply only to elements of design — there is no protection for purely functional elements that may have been taken by a competitor.
A successful plaintiff may obtain an injunction and damages for infringement.
e. Trade secrets, unfair competition claims and ancillary litigation
As noted previously, a breach of trademark secrets can be enforced only in provincial courts. Consequently, where there is a breach of a trade secret and potentially an infringement of a patent, the preferred venue for resolving both matters would be the provincial court with jurisdiction over the defendant.
Similarly, other types of proceedings can often be joined together. For instance, a patent and a trademark case can be joined, depending on the circumstances. In addition, sometimes an attack based on the Competition Act can be joined with a Patent Act defence. Consequently, IP litigation is not always a matter of simply enforcing one right to the exclusion of other causes of action, but often involves a portfolio of issues — both core IP and related matters that touch on areas including trade secret law and competition law, among others.