In June 2014, Bill C-31, the Economic Action Plan 2014 Act, No. 1, received Royal Assent. Among other things, the Bill contained significant amendments to Canada's Trademarks Act that will fundamentally change Canadian trade mark law and practice. Expected to come into force in late 2016 or 2017, the amendments also facilitate Canada's accession to the Madrid Protocol, Nice Agreement, and Singapore Treaty.
Other amendments to the Trademarks Act contained in the Combatting Counterfeit Products Act, and implemented in early 2015, created new border measures designed to provide registered trade mark owners with additional tools to stop the import and sale of counterfeits.
The following represents a brief summary of some of the most notable changes and their impact on the pharmaceutical trade mark field.
(i) No Filing Grounds; No Declarations of Use; No Registration Fees
Current applicants must claim at least one filing ground in a trade mark application— use, made known, use and registration abroad, or proposed use—and, if used, identify the date of first use. Use is of fundamental importance under the current regime. Applications based on proposed use cannot issue to registration without the filing of a Declaration of Use attesting to use of the mark in Canada with the goods and/or services. Trade mark use in Canada must be in the normal course of trade; hence, sample shipments of pharmaceuticals or use of the mark in clinical trials, will not ordinarily constitute use (a small exception may exist for unapproved drugs sold as part of Health Canada's Special Access Program). Current applicants must therefore carefully assess how the mark is used to identify proper filing grounds and avoid filing a false Declaration.
The amended Act will eliminate application filing grounds altogether. Applicants need only be using or propose to use, and be entitled to use the mark applied for. Applications will also automatically issue to registration upon expiry of the opposition period, even without use anywhere, and will not be subject to a registration fee.
Pharmaceutical products cannot be sold in Canada until the drug is approved by Health Canada, which can take years. Current practice, therefore, is to apply for a pharmaceutical trade mark and obtain extensions of time to file the Declaration of Use until the product is approved for sale in Canada.
Under the new regime, trade marks will issue to registration simply upon the expiry of the opposition period, even without use. Accordingly, trade marks covering pharmaceutical products could issue to registration long before the products are approved by Health Canada for sale here. Further, without a use requirement, trade mark applications may issue to registration for virtually all pharmaceutical products and/or services. Indeed, pharmaceutical companies with currently pending applications filed on the basis of proposed use may want to consider obtaining extensions of time to file the Declaration of Use pending the implementation of the new legislation, at which time, the application would issue to registration for all of the goods and/or services contained in the application— without any use.
The elimination of use as a prerequisite to registration will bring both advantages and new challenges for the pharmaceutical field. Overclaiming— including virtually all pharmaceutical products/services in an application— is of strategic advantage to pharmaceutical companies since such registrations, obtained without use, can conceivably block similar applications covering overlapping goods or services. However, overclaiming is also likely to lead to additional expense and uncertainly.
Without use information on the Trademarks Register, and with registrations potentially covering virtually all pharmaceuticals, marketplace investigations will become increasingly necessary (and expensive) for clearance purposes. Office actions are also anticipated to increase as examination for confusingly similar marks will be difficult with lengthy listings of goods and services, and Examiners are likely to issue more citations. More oppositions are also likely to be filed, if only to give prospective opponents time to investigate and determine whether there are prior rights on which to oppose.
Registrations will still be vulnerable to non-use cancellation beginning three years after the registration date under the amended Act. Because registrations will issue without proof of use, a pharmaceutical trade mark registration could become vulnerable to attack prior to Health Canada approval of the drug. However, the inability to market a product due to a pending regulatory approval process may be considered a special circumstance excusing non-use, permitting the registration to be maintained. Moreover, even if the registration is cancelled for non-use, a fresh application could be filed and, subject to an intervening right, a new registration would issue, without use, and be immune from a non-use cancellation attack for a further three years.
(ii) Adoption of Nice Classification for Goods and Services
Currently, trade mark applications can include any number of goods and services in a single application with no additional government filing fee. Once the amendments are implemented, however, applicants will be required to classify the goods and services in the application according to the Nice Classification system. While class fees have not yet been adopted and will be the subject of further consultation, the adoption of Nice classes will likely be accompanied by class filing fees, thereby increasing the cost of filing a multi-class application in Canada.
Pharmaceutical companies wanting to cover lengthy listings of products and services may want to file these applications before the implementation of the class based system, with a view to avoiding the payment of multi-class filing fees.
(iii) New Non-Traditional Marks and Examination for Distinctiveness
The amendments expand the definition of trade mark to include many nontraditional marks such as colour, shape, as well as so-called sensory marks (smell, taste and texture). This will be useful for pharmaceutical companies wanting to protect colour and shape of pharmaceutical tablets or capsules.
However, the amendments also permit the Trademarks Office to request evidence establishing the distinctiveness of the mark during examination, which is not currently permitted. Examination for distinctiveness will likely increase the cost of securing registration for non-traditional marks and accordingly, pharmaceutical companies wishing to secure registration of nontraditional marks may want to file the application before implementation of the new legislation.
(iv) Renewal Term
Registrations are currently valid for renewable terms of 15 years. This will be reduced to renewable periods of 10 years by the amended Act. It is not clear yet whether renewal fees will be reduced as a corollary.
To take advantage of the longer term of protection, owners of allowed pharmaceutical trade mark applications based on proposed use should file Declarations of Use as soon as possible. However, if it is more important to secure registration for the broadest possible goods/ services, not all of which may be used, a trade mark owner may wish to delay the deadline for filing a Declaration until the amendments are implemented, when the application will automatically register without use, although this will result in a shorter 10 year term of protection.
(v) New Border Measures
On 1 January, 2015, Canada implemented its Request for Assistance (RFA) border measures program—the cornerstone of the Combatting Counterfeit Products Act (CCPA). Under the program, registered trade marks can be recorded with the Canada Border Services Agency, permitting customs officials to detain suspect imported counterfeit goods bearing such marks at the border for up to ten days (five for perishable goods). During detention, the trade mark owner may be provided with samples of the goods and can request information to help to identify the source of the counterfeit products and facilitate a civil claim against the importer.
The new program complements provisions of the Customs Act, Trademarks Act, Copyright Act and Criminal Code generally governing the import and sale of counterfeit products, as well as the new criminal sanctions and an expanded definition of infringement in the Trademarks Act that came into force in December 2014 when the CCPA received Royal Assent.
While the border measures regime does not apply to grey goods, pharmaceutical preparations cannot be sold in Canada without prior Health Canada approval or without complying with Canada-specific labelling requirements. Consequently, parallel import of pharmaceutical preparations is illegal, and importers of such products would be subject to prosecution, even if not under the Trademarks Act.
International Update
Czech Republic
PETOSEVIC
As of 1 January, 2015, the Czech Republic introduced a new set of rules regulating customs measures intended to combat counterfeiting on the internal market. The new regulations are in line with the external border measures regulated by Regulation (EU) No 608/2013 of the European Parliament and Council of 12 June 2013. The new Czech regulations have introduced forms and requirements for applications for action similar to those in the EU Regulation No. 608/2013, including detailed information on genuine goods (as with Article 6(3)(g)(h)(i) of the EU Regulation No. 608/2013).
For the Czech Customs to be able to detain any suspected counterfeits within the country's borders, trade mark holders should file a separate application for the intra-border customs watch. Once such customs watch application is in place, the customs will detain the goods ex officio within the period of one year, which can be extended each year before the expiration date. Once the goods suspected of infringing IP rights are detained by the customs, a similar procedure to the one regulated on the EU level for border measures is envisaged by the intra-border customs regulations, which also includes a simplified procedure for the destruction of the goods, following the expressed or implied consent of the holder of the infringing goods.
However, unlike the EU Regulation No. 608/2013, the small consignment procedure is not possible under the Czech intra-border customs watch system.
The new set of rules introducing the intra-border customs watch measures is a welcome novelty that will enable IP right holders to combat counterfeiting more effectively on the internal market in the Czech Republic. The Czech Customs are very efficient in their anti-counterfeiting actions and this new set of rules similar to the ones introduced at EU level will most likely make a strong impact on the trade with counterfeits and other infringing goods
Hungary
PETOSEVIC
On 1 January, 2015, a significant addition to the Hungarian Act 95 of 2005 on Medicinal Products for Human Use entered into force — paragraph 20/A called "Temporary inaccessibility of electronic data".
The amendment allows the National Institute for Quality and Organizational Development in Healthcare and Medicines to combat counterfeit drugs sold online faster and more effectively. Namely, the Institute can order the removal of online content on fake or prohibited medicines and require the website owner to comply with the order for up to 90 days. The website owner has to remove the content within one working day or pay a fine ranging from EUR €315 — 3,150 (USD $357-3,570). If the website owner fails to comply, the court may order that the fine be paid several times.
The authorities may report intellectual property infringement at the same time, and if the court decides to make the electronic data permanently inaccessible, this decision would override the one on temporary inaccessibility.
If the website owner does not challenge the Institute's decision on temporary inaccessibility, the names of infringing websites may be displayed on the Institute's website for up to 90 days.
Montenegro
Gordana Pavlovic and Maruska Bracic, CABINET PAVLOVIC
With its decision of 10 April 2014, WIPO Arbitration Center accepted the complaint filed by Novartis AG (Novartis) that the domain name dailies.me was registered and used in bad faith and that it should be transferred to Novartis.
.ME top level domains are very attractive and presence in Montenegro is not required for registration.
Adam Strongbow from Boston, USA registered the domain name dailies.me. The website resolved to pay-per-click (parking site) which contained links to other websites offering contact lenses of Novartis, as well as its competitors.
Novartis (which acquired Alcon) filed a complaint with WIPO Arbitration and Mediation Center which is in charge of resolving conflicts regarding .ME toplevel- domain names. Novartis argued that the subject domain name is identical to its trade marks DAILIES, registered in numerous countries around the world, including Montenegro, as well as that they own and operate a website www.dailies.com.
Previously published in the May edition of Law Lore & Practice published by the Pharmaceutical Trade Marks Group
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
