Canada’s new Trademark Act

Introduction

In a recent move by the Canadian government, it has amended the old Trade-marks Act 2014 and brought loads of changes with their new amendment act which came into effect from June 17, 2019. The previous Trade-mark Act of 2014 posed several challenges for the business owners who wanted to register their brand name but faced difficulties in absence of a single application procedure for protection in various jurisdictions. If any business owner is planning to register its Trade-mark or has registered one within the old Act of 2014, they need to understand these new amendments and processes.

Adoption of International Standards

The revised Trade-marks Act correspond the Canadian trademark law with that of its major international trading partners like America and European Union. This new legislation have aligned Canadian law on trademarks with procedures laid down in Singapore Treaty on the Law of Trademarks (the “Singapore Treaty”) and the “Nice Agreement”, concerning the International Classification of products and Services for the needs of the Registration of Marks and have also led to implement its ratified “Madrid Protocol”, concerning the International Registration of Marks.

Adoption of internationally sound procedures laid down in several Conventions and Protocols will inevitably result in easing Canadian Businesses efforts to guard their business trademarks not just within Canada but also across International borders. Canadian now with just one application and one set of payment of fees ensure the protection to their trademarks in more than 100 countries now. Such an internationally standardized procedure has also enabled the multi-National companies to pursue trademark protection in Canada with greater ease.

Changes in the Process of Registration

This new trademark legislation has excluded the requisite to provide filing grounds in an application. This implies that fact of usage or intended usage of the trademark by the applicant has lost its relevance equating the position for all irrespective of whether or not they shall use the trademark.

Due to Canada’s allegiance to ‘Nice Protocol’ all the applications for registration according to this novel statute have to now classify the goods and/or services listed therein in accordance with the Nice Protocol. However, in practice this is only a perquisite for the applications which were advertised or not allowed till 17th July, 2019. The applications which got advertised or approved before this date will be required to classify their goods and/ services only upon seeking renewal.

Consequently, ever since the said Act has come into force, a huge hike in number of applications has been witnessed wherein business houses are aiming to secure protection to their trademarks and also do so as a defence mechanism against the ever-increasing menace of trademark squatters.

As a result of coming into force of this Act, another importance change that has occurred is that the declaration of use that was mandated by the previous law has been done away with and the businesses or persons owning the registration of trademark done in earlier legislation can continue to enjoy the benefits of it.

Although the elimination of the utilization requirement simplifies the trademark registration process for brand owners, it also invites applications from trademark “trolls”. Trademark trolls are individuals who file for marks they want to acquire and have absolute no intention of ever using, commonly with the goal of extracting money from a brand owner desirous of the registration for his or her legitimate mark. As a best practice, brand owners should monitor the trademark register and therefore, the Trademarks Journal to spot applications for marks which can be confusing with their pending applications and/or registrations. While it’s always been possible to oppose a mark once advertised, it’s now possible to require action against the said application even before its advertisement. By submitting a “Notification of Third Party Rights” to Canadian Intellectual Property Office (CIPO), brand owners can alert the office that the mark applied for is either confusing with their registered mark or earlier-filed application.

Despite the elimination of the utilization requirement, it still remains a key component of Canadian trademark law.  The use continues to be relevant for variety of reasons. One such reason is that Canada isn’t a first-to-file for jurisdiction. What this suggests is that rights to a trademark don’t necessarily belong to the individual who was first to file for the registration of that trademark. Prior use is a crucial thing about determining entitlement to a trademark where that entitlement is disputed between two parties. Further, a registration can still be cancelled on the idea of non-use under section 45 of the Trademarks Act, and with more applications on the register filed with reference to all goods and services than ever before, we are already seeing an increase in these proceedings.

Changes in Application Fees

The adaptation of the ‘Nice Protocol’ in the new Act has also resulted in changes to the amount of fees required to accompany the application to seek registration. Current Trade-marks Regulations’ Schedule of Fees lays down that under the new regime the fee for the primary class of products or services included in an application is $330 Canadian Dollar (CAD) in case the application and fee are submitted through the Canada’s Intellectual Property Office (CIPO) website. In event of existence of multiple class of products or services to which the application relates to as of the filing date, CIPO charges $100 CAD for every such additional class. However, if the application is made in paper copy form, the initial fee for one class is $430 CAD and $100 CAD for every additional class of products or services to which the application relates to as of the filing date.

Changes to the Term of Trademark Protection and Renewal Fees

Before coming into force of this Act, trademarks were registered in Canada for a 15-year term from the date of registration. But the current legislation has shortened this period to 10 years. Implying that now the renewals for protection of registered trademarks will be required to be filed in 10 years rather than previous term of 15 years.

Section 46 of the Act which provides for renewal of the registration of a trademark now costs $400 CAD in government fees for the primary class of products or services to which the renewal is related and an additional fees of $125 CAD will be required for every additional class of product and/service. In addition to this, the benefit of advance payment of fees for renewal has now been curtailed to the period of merely 6 months and all such renewals will be subject to adherence to all the requirements laid down under the Nice Protocol.

Changes to Trademark Eligibility

The newly enacted Act has widened the scope of what can be considered eligible for trademark registration purposes.

Unlike the previous law, even non-traditional signs like colors, holograms, images, and smells also are now eligible for protection under the trademarks law of Canada. The test which is presently in use to judge eligibility is on the basis of ‘Distinctiveness at the time of use’ which is different from the proof of prior use. Such assessment is made in the light of trademarks’ unique characteristics rather than recognition by consumers and the goodwill associated with the same. This modification in the law aids business owners who use non-traditional marketing methods to interact with consumers and simultaneously protect their interest in their unusual trademarks.

Changes to Examination Procedure – CIPO’s “Test of Distinctiveness”

With the advent of amended legislation, new and pending applications (that haven’t yet been approved), are now examined for distinctiveness. The Registrar of Trademarks has been given the right to seek evidence of distinctiveness as of the filing date for any application containing a mark that the Registrar doesn’t deem to be inherently distinctive. Since the amended legislation came into force, the Canadian Intellectual Property Office (CIPO) has published samples of marks that might be subject to an objection on the idea that the marks aren’t inherently distinctive.

As this objection remains very new, trademark examiners and practitioners are constantly learning as CIPO is fielding comments from practitioners handling these objections. While evidence was initially required to beat the not-inherently-distinctive objection, the office has since changed its language to simply accept either comments or evidence or both in response to the examiner’s report.

One surprising consequence of this alteration to trademark prosecution may be a number of objections being received to marks that might rather be registrable on the bottom that their component parts are not-inherently-distinctive. These objections would seem to be at odds with a guideline of trademark prosecution: that a mark should be considered as an entire.

In light of the actual challenge a not-inherently-distinctive objection may present, and to avoid the expensive prosecution of an application, applicants for trademarks should seek legal advice before filing on the status of their marks and therefore the likelihood of them meeting such an objection.

Changes in Procedure for Amending the Applications and Registrations

With the aim of greater flexibility for correcting errors made in applications, the newly enacted law now permits an amendment to the trademark by imitating the specified mark which is an equivalent to the applied-for mark and also the power to divide applications, amend and merge registrations.

The ability to divide an application is additionally a valuable choice to advance the registration of a trademark where an objection is raised in reference to only a subset of the products and services within the application. By dividing their applications, applicants can obtain registration of their mark for a subset of the products and services within the original application while continuing to correspond with the examiner to beat the remaining objection. This strategy can also be applied within the case of an opposition proceeding that relates only to a subset of the products and services. If and when the objection or opposition is overcome, the primary and subsequently granted applications could also be merged.

Changes in Requirements of Record

The amended Trade-marks Act have quashed the provisions relating to associated marks. Hence, businesses with associated marks are no longer required to provide evidence of mergers or assignments, as was the case in previous Act. Even the registered owners are not exempted from previously existent requirement of providing evidence and record a merger or assignment eliminating the need to alert CIPO about the same which can also lead to businesses saving the fees associated with the same.

Other Supplemental Changes brought by the Act

The act of Federal government of giving royal assent to The Budget Implementation Act 2018, No. 2 (“Bill C-86”) has furthered several changes to law of trademarks in Canada. Many of these changes attempt to further advancement in solving age-old grievances about trademark practice in Canada where the new amendment fills the gaps. One such grievance addressed is that of ‘Trademark squatters’ with the introduction of “bad faith” opposition and expungement ground. The act also changes the longstanding broad protection afforded to official marks.

Conclusion

Amendments to the law on trademark which has come into force in the month of June and clearly shows the legislative intent to uniformalise the whole procedure in accordance with international standards and also to provide businesses operating in Canada a safe avenue.