The Canadian government recently introduced a Bill which contained the most significant changes to Canada's trademark laws in modern history. Due to the fact that the revisions were contained in an omnibus Budget Implementation Bill (Bill C-31, Economic Action Plan 2014 Act, No. 1), they were introduced without consultation and passed despite serious concerns from intellectual property lawyers and businesses over their potential impact. The Bill received Royal Assent on June 19, 2014, and is now the law in Canada. The specific amendments to the Trademarks Act that will be discussed in this article are not yet in force, but are expected to be made effective in the fall of 2014, as soon as the necessary regulations are drafted. Once these regulations are in place, the landscape of Canadian trademark law will be changed dramatically.
This article will summarize the most important changes to the Trademarks Act, and discuss the challenges as well as the opportunities that you should be aware of.
Removal of “use” as a requirement for registration
This revision is by far the most significant one, as it changes what has been a fundamental requirement under Canadian trademark law for many decades. Under prior Canadian law, no registration could issue until the applicant claimed or declared that it had "used" the trademark in Canada. Applications based on use in Canada had to contain a claimed date of first use, and applications based on proposed use could not proceed to registration until a Declaration of Use was provided indicating that the mark was actually in use in Canada. Now, these requirements will be removed. An applicant will be able to file for and obtain a trademark registration in Canada without ever having used that mark anywhere in the world.
The impact of this major revision will not fully be known until after its implementation, but it is likely to result in applications being filed by applicants without a legitimate business interest in the applied-for marks. It is anticipated that we will see a dramatic rise in trademark squatters and pirates, and put legitimate trademark owners in a position of having to litigate in order to defend their marks. It should be noted that "use" will still be an important consideration under Canadian trademark law, and prior use of a mark will still give a trademark owner priority over a subsequent user. However, due to the fact that applications will no longer contain an indication of when a mark was first used, if at all, this information will not become known unless and until the mark is opposed or the subject of litigation. Under this new trademark regime, being the first to file an application will be extremely important.
Any owner of a trademark (foreign or Canadian) who wishes to protect their mark in Canada should consider filing an application in Canada before the regulations are implemented in the fall of 2014. Whether your trademark is already the subject of a foreign registration, or whether an application for the mark has not yet been filed in any country, it would be prudent to be the first to file in Canada before the law permits others to file applications for your trademarks without having to claim use. While you could litigate later over who is entitled to priority for the mark, it would be far more cost effective to avoid this potential litigation by being the first to file.
International classification (Nice) system
Currently, there is no requirement in Canada to classify goods and services that are claimed in a trademark application. Many other jurisdictions, including the United States, require applicants to separate the descriptions of goods and services according to the Nice International Classification System, and to pay a fee for each class of goods or services that is claimed. One of the significant advantages of the Canadian regime was the ability to file with respect to an unlimited range of goods and services and still only pay a single application fee. This enabled trademark owners to claim very broad descriptions and increase the scope of protection of their marks without paying any additional fees.
Trademark owners should consider filing applications in Canada before the implication of the Nice Classification system this fall, in order to obtain the broadest scope of protection possible and in order to avoid the anticipated increased fees for filing on a per-class basis.
Renewal period shortened
Currently, trademark registrations must be renewed every 15 years. The revisions will reduce this renewal period to 10 years.
Trademark owners can do two things as a result of these revisions. First, for any existing Canadian registrations that may be coming up for renewal in the next few years, you can obtain early renewal before the implementation of these changes and thus obtain additional years of registration before the renewal period is reduced. This strategy would only apply to marks that have a few years or less remaining before renewal. Second, if you file an application now, and if it proceeds to registration before the changes are in effect, the renewal period will remain at 15 years. At this point, filing an application now would be unlikely to result in a registration before the changes are expected to be implemented, but it is possible that such implementation will be delayed.
Color and sound marks
Under the current Trademarks Act, it is not necessary to prove that a colour or sound mark has acquired distinctiveness in order to obtain registration. This is likely to change once the regulations are put in place.
Owners of trademarks that consist of colours or sound should consider filing applications in Canada now before these more stringent requirements become law so as to take advantage of the more lenient regime.
The Canadian government indicated that it proposed many of the above revisions in order to allow Canada to conform with the requirements of the Madrid Protocol, an international trademark filing system that allows trademark owners file international applications. Currently, it is not possible to file an international Madrid Protocol application based on a Canadian application or registration. These revisions will allow such Madrid Protocol applications, however, these revisions are expected to be delayed until 2015. As such, this article will not address the issues and opportunities available for trademark owners under the Madrid Protocol. For those familiar with this international filing system (which is available in many countries including the United States), the system will work identically in Canada.
Trademark portfolio review
Given these significant amendments and the fact that it is still possible to take steps before they are implemented, we highly recommend that every trademark owner carefully review their trademark portfolio and consult with their trademark advisors to ensure that they are protected to the fullest extent possible in Canada prior to these amendments taking effect. Whether you have registered or unregistered marks, it is possible to file in the near future and obtain filing priority over applicants who will undoubtedly commence filing applications in Canada once the requirement of use is removed. Taking steps now may well avoid costly opposition proceedings and litigation in the future relating to trademark squatters and pirates. You can also take advantage of the current system which allows unlimited descriptions of goods and services before the Nice Classification system and increased fees are implemented, and early renewals can add extra years to your registrations.