On June 17, 2019, after almost five years since the proposed amendments were introduced, Canada’s remodeled trademark laws finally came into force. In deciding to update its trademark laws, Canada’s main concerns were alignment and efficiency. (Canada’s new trademark laws will now adhere to multiple international standards and agreements, such as the Singapore Treaty, the Madrid Protocol, and the Nice Agreement).

By modernizing its trademark laws, Canada hopes to “lower the cost and increase the ease of doing business in Canada”,[1] while also providing businesses and individuals with an “efficient means of protecting their trademarks in various jurisdictions around the world.”[2]

While the remodeled laws will bring about a host of changes for trademark applicants and trademark owners, there are five key changes to know about.

(1) Elimination of Use Requirement

Currently, applicants must have a “use” basis for filing, which includes using the mark in Canada or intending to use the mark in Canada. However, under Canada’s new trademark laws, such a “use” basis for filing is not required. Along similar lines, declarations of use will now become a thing of the past. Currently, declarations of use are required to be filed by trademark applicants, which state that the trademark is being used in Canada with certain goods and services.

The elimination of use, intent of use, and declarations of use means that applicants will no longer be required to provide details or dates of use, intent to use, or declarations of use, and can simply file a trademark application, along with meeting other requirements, in order to obtain a trademark registration. The eliminations may rouse some concerns, especially in the realm of protecting marks against trademark “squatting”, individuals not legitimately using the trademark, or individuals not legitimately using the trademark as a source indicator. For example, a brand that is getting ready to apply for a Canadian trademark may not be able to register the mark, if an individual previously registered the same or similar mark, regardless of whether that individual is actually using or intending the use the mark in Canada.

However, trademark applicants and businesses should not worry too much, as the Canadian Intellectual Property Office has included multiple safeguards to help prevent against trademark squatting. The first safeguard, similar to the U.S.P.T.O.’s opposition proceedings, is known as the “protest” procedure. Under the new procedure, third parties may submit submissions to the trademark examiner explaining why the trademark application should be denied. “[T]he examiner of that application will have the option of using those submissions to raise objections in an office action, i.e., a letter of objection, to the applicant. This protest procedure could be used to bring potential squatting behaviour to light, and may discourage . . . squatters”.[3]

The second safeguard also deals with opposing a trademark application and invalidating a trademark registration. Under the new laws, “bad faith”, which is not defined in the Trade-marks Act, forms the basis as a “ground of opposition to the registration of a trade-mark and for the invalidation of a trade-mark registration”.[4] It is important to note, however, that “bad faith” is decided on a case-by-case basis.

The third safeguard pertains to registered trademarks and specifically deals with use of the registered trademark. Under the new laws, “until a mark has been registered for 3 years[,] registered owners will be required to prove use in an action for infringement or depreciation of good will.”[5] In other words, to enforce its trademark registration and make a claim for relief, a trademark owner must show that the trademark was actually in use in Canada during the three year period. In the absence of use, a trademark owner will be required to present the existence of “special circumstances” that excuse such absence.[6] The Trade-marks Act does not describe what constitutes a “special circumstance”.

(2) Priority Claims Expanded

Currently, trademark applicants wishing to claim a priority filing date from a previous application may only do so if two conditions are met: (1) the previous application must have been filed within six months before filing a Canadian application, and (2) the previous application must have been filed in the trademark applicant’s “country of origin”. If these two conditions are not met, the trademark applicant cannot claim the previous application’s filing date, but will be stuck with its Canadian filing date. This situation may lead to problems, as claiming priority can help ensure that a trademark is not used or registered by someone other than the trademark owner.

Canada’s new trademark laws greatly simplify the process of claiming priority. Now, “a request to claim the date of filing in another country as the date of filing in Canada (referred to as a request for priority) be made within six months after the filing date of that earlier application on which the request is based.”[7] While the six-month time limit remains, the “country of origin” requirement has been eliminated. Now, applicants applying for a Canadian trademark can base a priority filing date on any previous application filing within the six-month time period. For example, a business could obtain the filing date from a Swiss trademark application for its Canadian trademark application, provided that the Swiss trademark application was filed within the preceding six months.

(3) Shorter Protection and Renewal Periods, and Adoption of Nice Classification

(a) Protection and Renewal Terms

As part of Canada’s efforts to align itself with international standards and laws, Canada is changing the period of trademark protection and renewals from fifteen (15) to ten (10) years. This change puts Canada closer to the protection and renewal terms currently in place for a majority of countries.

(b) Nice Classification

When Canada’s new trademark laws take effect, Canada will begin enforcing the Nice Classification system (“NCS”) for all pending and future trademark applications. The NCS consists of several classes of goods and services that trademark applicants designate when applying for a trademark. Currently, there are about one-hundred and fifty countries that have implemented the NCS, including Canada, which aligns the Canadian Intellectual Property Office’s trademark registration process with several other countries.[8]

The implementation of the NCS will affect trademark applications that are pending as of June 17, 2019, and trademark applications filed after June 17, 2019. These applications will now be required to use the NCS. This will likely lead to an increase in trademark application costs, as the fees for filing a trademark application increase with each class of goods and services claimed in the trademark application. For example, pending trademark applications will need to be revised in order to comply with the NCS. However, it is unclear whether pending trademark applications will need to pay a fee for such revisions.

Additionally, renewals for trademark registrations occurring on or after June 17, 2019, will be required to use the NCS. “[T]rademark registrations will only be renewed if they fully adhere to the Nice Classification system.”[9] Full adherence, however, will result in an increase in renewal fees. Under Canada’s new laws, and its adoption of the NCS, trademark owners will be charged a separate renewal fee for each class of goods and services that pertains to their trademark. For example, if a trademark falls within ten separate NCS classes of goods, the trademark owner will be required to pay a separate, renewal fee for each class.

(4) Expansion of What Qualifies as a “Trademark”

Under the Trade-marks Act, the definition of “trademark” is expanded to include “a sign or combination of signs that is used or proposed to be used by a person for the purpose of distinguishing or so as to distinguish their goods or services from those of others”.[10] As written, the definition is broad enough to include essentially anything that may act as an indicator of source, including what are known as non-traditional marks.

Currently, Canada recognizes a limited number of non-traditional trademarks, such as sound marks and colors applied to the surface of 3D objects. However, with the newly expanded definition of “trademark”, new non-traditional marks may be registered. These include:

– taste;

– scent;

– texture; and

– color per se (a color with no dimensional limitations, such as brown for UPS in the

U.S.A.).

(5) Enhanced Registration and Examination Procedures

(a) Registration

Trademark applicants wishing to register non-traditional marks, whether allowed under Canada’s current trademark law or allowed under the new trademark laws, will need to provide Canada’s Intellectual Property Office with a “clear and concise description”[11] of the mark in the trademark application. For example, a trademark applicant wishing to register a textile “must include a clear and concise description of the tactile qualities of the trademark” in the trademark application.[12]

There are other specific guidelines for what information must be included in the trademark applications for non-traditional marks. This information can be found in Practice Notices provided by the Canadian Intellectual Property Office.

(b) Examination Procedures

Under current law, distinctiveness is not a part of the trademark application process. While third parties may asset a challenge to a proposed trademark’s distinctiveness when seeking to expunge a trademark application, trademark applicants aren’t required to submit evidence of distinctiveness.[13]

However, under Canada’s new laws, trademark applicants will be required to provide evidence of distinctiveness to the examiner in certain situations.  (Pending trademark applications, as of June 17, 2019, will be subject to a distinctiveness examination, if applicable). For example, trademark applicants will need to show distinctiveness when:

(1) the examiner believes that the trademark isn’t inherently distinctiveness; or

(2) for most, if not all, non-traditional marks.[14]

When determining distinctiveness, examiners will look to the time of filing the trademark application in Canada, without considering other priority dates. The test for determining distinctiveness is the same as it currently stands under § 12(2) of the Trade-marks Act. However, the new distinctiveness requirement may limit the territorial bounds of some trademarks.[15] For example, if a trademark applicant can only show distinctiveness in two Canadian territories, the trademark registration will be limited to those two territories.

If a trademark requires evidence of distinctiveness, the trademark applicant is not required to file evidence of distinctiveness at the time it files the trademark application. For example, a trademark applicant can file evidence of distinctiveness any time after filing the trademark application or after receiving an examiners report. (Examiners reports are similar to the U.S.P.T.O.’s Office Actions). However, it may be a good idea to submit evidence of distinctiveness at the time of filing a trademark application to speed up the application process.

Conclusion

There are many changes involved in the modernization of Canada’s trademark laws that affect both trademark applicants and trademark owners, such as the elimination of the use requirement. Due to the extent of these changes, it is best for trademark applicants and trademark owners to familiarize themselves with the new laws and application requirements in order to hit the ground running and effectively protect their trademarks in Canada.

[1] Joining the Singapore Treaty, the Madrid Protocol and the Nice Agreement, and Modernizing Canada’s Trademarks Regime — An Overview, Government of Canada (Nov. 14, 2018), http://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr04260.html?Open&wt_src=cipo-tm-main&wt_cxt=activity.

[2] Id.

[3] Graham Honsa & Henry Lue, Coping with Clutter and Trademark Squatters under the New Canadian Trademarks Act, Wilson Lue LLP(Dec. 2018), https://www.wilsonlue.com/article/coping-with-clutter-and-trademark-squatters.

[4] Bill C-86, A second Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures, 1^stSess, 42nd Parl, 2018, cl. 220 (assented to 13 Dec. 2018), R.S.C. 1985, c. T-13, s. 38(2) (Can.), https://www.parl.ca/DocumentViewer/en/42-1/bill/C-86/royal-assent.

[5] Christopher Heer et al., Amendments to the Trade-marks Act Will Come into Force on June 17, 2019 – Are You and Your Business Ready?, Heer Law(Jan. 26, 2019), https://www.heerlaw.com/upcoming-changes-trademarks-act.

[6] Bill C-86, supranote 4, at cl. 225 (assented to 13 Dec. 2018), R.S.C. 1985, c. T-13, s. 53 (2) (Can.).

[7] Trademark Regulations, 152 Canada Gazette(Part II) 4064, 4139 (23 ed. 2018), http://gazette.gc.ca/rp-pr/p2/2018/2018-11-14/pdf/g2-15223.pdf.

[8] Frequently Asked Questions: Nice Classification, World Intellectual Property Organization(2019), https://www.wipo.int/classifications/nice/en/faq.html.

[9] Christopher Heer et al., supranote 5.

[10] Bill C-31, An Act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures, 2^ndSess, 41st Parl, 2014, cl. 318 (assented to 19 June 2014), R.S.C. 1985, c. T-13, s. 2 (Can.), available athttps://www.parl.ca/DocumentViewer/en/41-2/bill/C-31/royal-assent/page-4.

[11] Draft – Practice Notice on Non-traditional Trademarks, Government of Canada(Sept. 28, 2018), http://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr04453.html.

[12] Id.

[13] A guide to trademarks: Expungement of a trademark registration, Government of Canada(Oct. 9, 2018), http://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/h_wr02360.html;Trade-marks Act, R.S.C. 1985, c. T-13, § 38(2) (amended Dec. 30, 2018).

[14] Trade-marks Act, R.S.C. 1985, c. T-13, § 38(2) (amended June 17, 2019).

[15] Id.at § 32(2).