Hockey players are taught a fundamental lesson at an early age: when you have the puck, keep your head up or you could end up in a world of hurt.
Improper trademark usage and protection in Canada can also bring you into a world of hurt, and this will be even more true given upcoming changes in the Canadian trademark laws.
Companies doing or planning to do business in Canada should take a close look at their trademark portfolios to avoid potential issues.
Here are six common trademark mistakes that companies may face in Canada, as well as summaries of some upcoming changes to Canadian law:
- You don’t conduct searches. The fact that a mark is available for use in another country does not mean it is available for use in Canada. It is important to conduct Canadian clearance searches before using or applying to register a trademark in Canada. These searches can identify potential issues in advance and help you avoid unnecessary legal fees, rebranding fees and damages.
- You don’t register. Your mark must be registered in Canada to be fully protected in Canada. Registrations in other countries provide no protection in Canada. Using your mark extensively in Canada might give you some “common law” trademark rights in areas where your mark has become well known; however, this will not stop competitors from using the mark in other areas. In contrast, registration will protect your mark throughout Canada. Registration also provides a complete defense if you get sued for trademark infringement.
- Your licensing is improper. Your trademark rights in Canada could be diminished or destroyed if a third party uses your mark without a proper license agreement. Canadian law requires a trademark owner to have an agreement in place with any third party who uses your mark, and requires you to have control over the “character and quality” of the products and services offered in connection with your mark. This rule applies to arms-length third parties as well as to intercompany agreements with affiliates and subsidiaries, often overlooked.
- You don’t use the mark. Your Canadian registration can be expunged if you do not use your mark in Canada in association with the goods and services in your registration for at least three consecutive years. Your mark can also be expunged if there are material differences between the registered version of the mark and the actual version you are using.
- You forget copyright and moral rights. Logos and design marks can be protected in Canada by both trademark law and copyright law, but registering a logo as a trademark does not provide any rights under copyright law. If the logo was created by a contractor or any third party other than an employee in the course of his or her employment, then the contractor or third party will own the copyright (even if the person was paid to create it). The contractor and third parties must transfer ownership to you, in writing, to secure the logo. It is also important to ensure that the copyright transfer includes an irrevocable waiver of “moral rights,” a special type of right held by authors of creative works in Canada.Moral rights are separate from copyright and include the right to prevent copyrighted works from being altered to the authors’ detriment without consent, the right for authors to have their names associated (or not associated) with their works, and the right to prevent the works from being used in association with products, services or causes. Moral rights are not transferred with copyright; they must be specifically waived or else will remain with the authors even after the copyright has been transferred. Moral rights are not relevant for word trademarks, but they are relevant for logo trademarks and all other copyrightable works.
- You ignore upcoming changes to Canada’s trademark laws. Canada’s trademark laws are about to change in a big way in 2016 or 2017. Some of the changes will benefit registrants, but others may provide challenges:
- Benefits: Among the benefits of the upcoming changes include implementing the Madrid Protocol; eliminating the requirement to use a trademark before it can be registered (although this will also present challenges too, as mentioned below); allowing additional grounds of opposition; and permitting applicants to divide applications.
- Challenges: Some disadvantages include reducing the length of a registration from 15 years to 10 years; the likelihood of higher filing costs (due to the new Nice classification system); a significantly higher number of conflicting applications (because use will no longer be required for registration) and a requirement to submit evidence of a mark’s distinctiveness upon the Registrar’s request.
The prospect of these upcoming changes should encourage applicants to file their Canadian applications soon to avoid the undesirable changes in the new legislation while still taking advantage of the positive changes that will apply after applications have been examined and allowed.