Canada: Key Changes To Canada's Trademark Law

June 17, 2019: Key changes to trademark laws come into force

Nearly five years after the Government of Canada tabled a number of intellectual property law treaties to harmonize Canada's patent, trademark and industrial design laws with international laws, the long-awaited coming into force date has finally been announced for the Trade-marks Act (Act)– June 17, 2019 (CIF Date). The amendments to the Act will bring Canada in line with three major intellectual property treaties—the Madrid Protocol, the Nice Agreement and the Singapore Agreement (Treaties).  Canada's accession to the Treaties will foster international competitiveness for intellectual property owners, and reduce cost and complexity of entering foreign markets.

In addition, the federal government has committed CA$85 million in funding over five years to develop an IP strategy, which includes IP awareness, education and strategic tools for owners.

Trade-marks Act

There are significant changes to the Act, and implications for trademark owners, which include:

• Non-traditional marks: Trademarks, currently referred to as "marks", will be referred to as "signs". Applicants will also be able to file applications for an expanded list of non-traditional signs, such as shape, sound, smell, taste, texture, hologram, single colour or colour combinations without delineated contours, three-dimensional and moving images. However, the Canadian Intellectual Property Office (CIPO) will examine these non-traditional signs for distinctiveness, and will be able to request proof of distinctiveness in Canada, thus making it more difficult to register many non-traditional signs, including ones now permitted without examination for distinctiveness, such as sound marks;
• No filing basis: The previous requirement to include a basis for filing a trademark application (proposed use, use, registration abroad or making known) will no longer be in effect. However registrations will still be subject to cancellation for non-use. While this simplifies the application process, it creates greater risk of trolls and squatters, and makes the process of clearance searches more complicated and costly. Under this new trademark regime, being the first to file an application will be extremely important;
• Declarations of use will no longer be required after the CIF date: Allowed applications will progress directly to registration after the CIF Date upon payment of the government fee, without the requirement to file the declaration of use for proposed use applications. Applications filed after the CIF will no longer be subject to the CA$200 registration fee. If owners of allowed applications wish to proceed to registration prior to the CIF Date, applicants must still file a declaration of use (for proposed use applications) and pay the registration fee. Applicants who based their applications on proposed use and have not used their trademarks in association with all goods and services, may be able to extend their deadlines until the CIF Date to avoid limiting coverage to only goods and services in use in Canada;
• NICE classification: For all new applications and any pending applications that have not been allowed by the CIF Date, goods and services will need to be classified into the 45 International Classes, harmonizing the system with most of the world;
• Fee-per-Class: The current government filing fee of CA$250 for all goods and services covered under an application, and registration fee of CA$200 will be repealed after the CIF Date. The government filing fees will be based on classification, namely, CA$330 for the first class, and CA$100 for each additional class of goods/services for applications filed online. There are cost savings to filing multi-class applications in Canada prior to the CIF Date. Trademark owners should consider filing applications in Canada before the CIF Date, to obtain the broadest scope of protection possible and avoid the anticipated increased fees for filing on a per-class basis;
• Priority claims: Applicants may rely on any prior application filed in any country of the Union and not just one filed by the applicant in its country of origin;
• Distinguishing guise: The new Act has removed the ability to file an application for a distinguishing guise. This type of intellectual property is mostly subsumed within the new definition of a sign;
  
• Standard character claims: applicants not wishing to limit coverage to any particular font, size or colour will be able to enter a standard character claim;
• Objections on the basis of lack of inherent distinctiveness: Examiners will be able to object to a sign that is not inherently distinctive. Previously, the scope of the examiner's search was limited to: 1) the Canadian Trademarks Register for confusingly similar marks; 2) a general search for the purpose of assessing descriptiveness; and, 3) an assessment for other issues of registrability (e.g., whether the mark is "primarily merely" a name or surname of an individual, whether registration is prohibited or blocked by the existence of an official mark). It is likely this change will lead to more substantive objections raised during examination than in the past;
• Overcoming objections to registrability: The current Act provides that where an application has received objections to registrability, the mark may register if, among other things, it is the subject of a registration in the applicant's home country and is 'not without distinctive character'. This exemption is entirely eliminated in the new Act and affects pending applications not advertised prior to the CIF Date, making the evidentiary burden more onerous, particularly for non-Canadian brand owners;
• Divisional applications: Applications may be divided after the CIF Date. This is advantageous if the application faces objections or oppositions in the prosecution of the trademark, or they wish to assign a portion of the goods and services to another owner. Once the application is divided, it may be merged with the original registration after all issues are resolved and the divided application is registered;
• Associated marks:  all associations will be removed from existing registrations and no further associations will be permitted;
• Term: For applications filed prior to the CIF Date, the term of registration—10 or 15 years—will depend on the date on which the Registrar has processed the registration fee;
• Renewals: After the CIF Date, the term of renewal of a registration will be reduced from 15 years to 10 years, unless the expiry of the trademark occurred prior to the CIF Date; Renewal fees after the CIF date will be calculated based on the number of classes, namely CA$400 for the first class, and CA$125 for each additional class. In addition, for a renewal to be processed after the CIF Date, the goods and services must be properly classified in accordance with the Nice Agreement. Registrants can avoid the fee-per-class increase if they renew their registrations prior to the CIF Date, including those due for renewal after the CIF Date (however, CIPO may still issue a notice requiring classification);
• Record of assignments: Proof of the assignment will only required if initiated by the assignee;
• Certification marks: Applicants will be able to file certification marks that are not in use;
• Madrid Protocol: Canada will join the Madrid Protocol, thus allowing Canadian applicants to file applications with the International Bureau of the World Intellectual Property Association (WIPO) and accessing 118 jurisdictions worldwide. Filing a WIPO application for an international registration offers a streamlined process and cost savings for foreign filings for Canadian brand owners (owners must have a Canadian application or registration first);

Further amendments to come

Additional proposed amendments to the Act were introduced on October 29, 2018, under Bill C-86, aiming at correcting deficiencies in Bill C-31. These amendments, if passed, include:

• Reintroducing the concept of bad faith as a ground of Opposition, and as a basis of a Federal Court validity challenge to a trademark registration;
• Allowing official marks to be challenged on the basis that the owner is not a public authority or that it no longer exists;
• Granting additional powers in certain proceedings, including allowing the Registrar to grant confidentiality orders, awarded costs, and provide case management deadlines in Opposition proceedings;
• Preventing the owner of a registered trademark from obtaining relief in a proceeding alleging infringement or depreciation of goodwill during the first three years after registration, unless the trademark was in use in Canada during that period, or special circumstances exist to excuse the absence of use.

Key recommendations for brand owners

• Conduct an IP audit of your business worldwide, and consider whether to expand your goods and services coverage in Canada;
• File trademark applications prior to the CIF Date to take advantage of the flat government filing fee;
• Renew your trademark registrations that expire soon after the CIF Date to avoid the pre-class fee, and the need to re-classify the goods and services at the time of the renewal (this depends on a number of factors – we recommend consulting with a Trademark Agent); and
• Engage a watch service to monitor your primary brands.

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