In the Home Stretch? Get Ready for Implementation of Amendments to the Trademarks Act

March 1, 2018

By Cynthia Rowden

In February, implementation of amendments to the Canadian Trademarks Act took a big step forward   with the publication of the latest revisions to the Trademark Regulations in the Official Gazette, which set February 1, 2019 as the planned coming-into-force (or CIF) date.  The Regulations are not only a key element of the framework of Canadian trademark registration, opposition and cancellation proceedings, but include the details that will finally permit Canada to become a member of the Madrid Protocol. The latest draft Regulations are subject to consultation until March 11, 2018, and include some significant revisions to earlier drafts, but the general view that the likelihood of further changes, apart from minor drafting for clarification, is small. So, we now have a fairly clear picture of the new Canadian trademark landscape.

These amendments will introduce the most significant changes to trademark rights in Canada since the 1950’s, and are designed not only to implement a series of intellectual property treaties, but also simplify registration and bring Canadian trademark law and practice in line with many other countries.

Highlights include:

1. Canadian trademark owners will be able to use the Madrid Protocol to access streamlined international filing, and international applicants will be able to designate Canada when filing for extensions of rights through the International Bureau. It is hoped that more Canadian businesses will take advantage of this to grow their international brand portfolios. It is also expected that more international businesses will choose this option instead of direct filings in Canada.

2. Application requirements will be simplified. Applicants who have used or propose to use a mark may file in Canada, and specific filing grounds will not be necessary, eliminating many filing formalities.

3. Use as a prerequisite to registration will be eliminated. NOTE, the Trademarks Act continues to make “prior use” a ground of both opposition and expungement, so it will still be important to clear new marks by checking not only the Register, but unregistered, or common law, sources. Also, while the Trademarks Act does not contain requirements to prove use in Canada after registration or on renewal, non-use in Canada after the third anniversary of registration may result in cancellation.

4. Goods and services must be classified using the Nice Classification, and fees, per class, will apply on filing. The Draft Regulations confirm that fees for a single class, for applications filed online, will be $330 CA for the first class of goods/services, and $100 CA for each additional class. Higher fees will be applied for paper, vs. online filing. The new fees-per-class will not apply to applications filed before the coming-into-force date (unless applications had not been formalized by that date).  In addition, registration fees for applications filed after the CIF date will be eliminated, but will still be payable for applications pending at that time.

5. A broader list of non-traditional trademarks (colour, taste, texture) will be registrable, but Examiners will have more leeway to require evidence of distinctiveness in Canada.

6. Amendments, including to a trademark, corrections and recordal of assignments will be simplified.

7. A system for third-party letters of protest will be implemented, permitting letters to the Registrar before registration. More details will be included in Practice Notices.

8.  Opposition and summary non-use (s. 45) proceedings will be different, with changes in the order of written representations, limitations on participation in hearings, and stricter rules on service of documents and timing.

9. Applications may be divided, with fees applicable for each divided application. This may offer strategies for faster settlement of disputes if parties can divide out non-contentious goods/services.

10. Renewal terms for all marks issued or due for renewal after the coming-into-force date will change from 15 years to 10. Renewal fees will also be charged on a per-class basis, namely $400 CA for the first class of goods/services, and $125 CA for each extra class if processed online.

While the expected implementation of these changes is still nearly a year away, brand owners should have a strategy to both plan for new opportunities, and benefit from current fees and procedures.  Steps should include:

– assess brand portfolios, and consider if cost savings are possible by filing now, before fees increase. For example, if goods/services cover 5 classes, the government fees will increase from $250 to $830; 

– broaden your brand portfolio, and avoid registration delays by filing now for marks, goods and services not yet in use in Canada. No declarations of use will be necessary for applications filed before the amendments, and registration will issue upon allowance (although applications filed before the CIF date will also need to pay the registration fee);

– consider cost-savings of early renewal to avoid fees-per-class. While this won’t impact the term of renewal, which will shorten to 10 years for all registrations due for renewal after the CIF date, benefits for owners of multi-class registrations can be significant;

– get ready to use the Madrid Protocol to enhance international brand protection. Costs of obtaining and maintaining foreign trademark rights can be lowered by using the Madrid Protocol, which may avoid some local legal fees for filing, renewal and recordal of assignments and other changes. However, local laws will continue to be relevant for brand registration and enforcement, so consideration still needs to be given to clearance, risk assessment, registrability and use requirements. Budgets should be assigned based on countries of priority. Many international brand owners now use a combination of local registration and Madrid Protocol filings to optimize their rights. Review your brand portfolio and develop a strategy for broader international brand protection.

Other impacts

The long lead-up to the amendments, passed in 2014, and now planned for implementation in early 2019, has opened up the Register to abuse from applicants who have taken advantage of the current very low Canadian government fees (and no fees-per-class), and the impending ability to register without use. A small number of entities have filed hundreds of “45 class” applications with pages of goods/services, for marks including coined words, personal names and well-known brands, all based on proposed use. If allowed, these will register after the CIF date without ever being used, and will have long-lasting impact on the Canadian Register. While abusive filings are being noted in many other countries, the 45-class filings seem to be unique to Canada. These marks threaten to complicate selection and risk analysis of new marks, and add considerable work for the Trademarks Office. While it is hoped that a strategy to combat these filings can be implemented, this phenomenon illustrates that trademark owners need to be vigilant in ensuring that they have developed trademark filing strategies to reduce the risk that others don’t appropriate their rights, causing future costs and risks.

For more news and information on the status of the changes to the Trademarks Act and Regulations, contact Bereskin & Parr’s Trademark Group.

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