Canada: Big Changes May Be Coming To The Trade-marks Act Under Bill C-31

Last Updated: June 2 2014
Article by Rob Aske

I recently had the pleasure of presenting a summary of pending changes to Canada's Trade-marks Act under the enormous omnibus bill C-31, part of the federal government's "economic action plan".

The government's own summary to the Bill describes it as implementing the Singapore Treaty, the Madrid Protocol, simplifying filing requirements, eliminating the need for a declaration of use, reducing the term of registration to 10 years, and adopting Nice Classification.

Here are the key points I covered:

   1.  Hyphen slashed!   Trade-mark becomes "trademark".

   2.  Wares replaced with goods.

    3.  Signs:  Trademark definition expanded with reference to "signs", to permit registration of broader array of marks including [open ended]: word, a personal name, a design, a letter, a numeral, a colour, a figurative element, a three-dimensional shape, a hologram, a moving image, a mode of packaging goods, a sound, a scent, a taste, a texture and the positioning of a sign.

Definition of distinguishing guise deleted.

Registrar would have explicit power to request evidence of distinctiveness at filing date for: certain colour marks, three-dimensional shape of any of the goods, mode of packaging goods, sound, scent, taste, texture, or any other prescribed sign (s. 32).

    4.  Term reduced to 10 years under 46(1).  15 year term would still apply for existing registrations when the law comes into force under 73(4). So registrants may wish to renew promptly when they can for 15 years rather than 10 after the law changes.

    5.  Nice Classification would be adopted, which WIPO describes as follows:  The Classification consists of a list of classes – 34 for goods and 11 for services – and an alphabetical list of the goods and services. The latter comprises some 11,000 items. Both lists are amended and supplemented periodically by a Committee of Experts in which all Contracting States are represented. The current edition of the Classification is the tenth, which entered into force on January 1, 2012.

Section 6 descriptions of confusion amended to note that confusion may occur whether or not the goods and services are in the same class of the Nice Classification. 

Applications would require grouping of goods or services according to Nice Classification (section 30).  Registrar could require Nice Classification for existing registrations (44(1)).  Any questions regarding classes for goods and services shall be determined by the registrar whose determination is not subject to appeal.

The application must still also include a statement in ordinary commercial terms of goods and services (like before). 

Some fear costs of filing may increase if a fee per call system is adopted.

    6.  Changed application process:  Under section 30 a person can file if they are using or propose to use a trademark in Canada.  The application must include a statement in ordinary commercial terms of goods and services (like before).  The concepts of proposed use, making known in Canada, or use and registration abroad are removed from the application.  The Nice Classification must be included.  Regulations may specify further requirements. 

30(1) A person may file with the Registrar an application for the registration of a trademark in respect of goods or services if they are using or propose to use, and are entitled to use, the trademark in Canada in association with those goods or services.

    7.  Utilitarian Function: A trademark is not registrable if in relation to goods and services its features are dictated by a utilitarian function (12(2)).  The registration of a trademark does not prevent a person from using any utilitarian feature embodied in a trademark (20(1.1)).

     8.  Divisional applications (s. 39).  An applicant may limit the original application to one or more of the goods or services and file a divisional application for the same mark in association with any other goods or services that were within the scope of the original application on its filing date, and within the scope of the original application as advertised, if the divisional application is filed post-advertisement.

    9.  Associated Marks:  The concept of associated marks is removed from section 15, which required associated marks to be identified as such on the register, and no change of ownership in respect of a group of associated marks could be made unless the Registrar was satisfied the same change had occurred with respect to all of the marks in the group.  Now instead section 15 would simply state that confusing marks are registrable if the applicant is the owner of all of the confusing marks.

Some think that this change takes away protection of the public interest by preventing confusing marks from being owned by different entities.

    10.  Use:  This is the most controversial part of the new legislation.  Applications would not be based on existing use and proposed use.  No date of first use would be required.  An application can simply be made if the applicant is using or proposes to use the mark (s. 30). 

If there is no opposition to the application, the applicant can register without any declaration of use or without in fact putting the mark into use.

Under section 38, there is a new ground of opposition whereby the opponent can argue that on the filing date of the application the applicant was not using and did not propose to use the mark in Canada in association with the goods or services (38(2)(e)) but it could be difficult to prove no intention to use.  Under section 45, much like before, after 3 years, a third party could require the owner to furnish evidence of use with the goods and services.

Some practitioners have expressed significant concerns about changes to use including the following:

(a)          It will be more difficult to conduct searches in advance of filing for a mark as the register will have less information about the state of use of other marks;

(b)          It will be more difficult to make assessment between competing applications, as date of first use would not be shown;

(c)          Similarly, it would be difficult to make assessment of rights between an applicant and a registrant; e.g. is the registered mark subject to expungement for being a subsequent user?

(d)          It would be more difficult to decide whether to oppose an application without the use information;

(e)          The "allowance" stage will not be included and this will not sort out real uses from "possible" uses, and applicants who file for long lists of goods and services will not have to weed these out at the declaration of use stage;

(f)           The valuation of marks may be more challenging if they are not based on actual use;

(g)          Registrations may be enforceable even if they are not based on actual use;

(h)          There is no requirement to prove use upon the ten year renewal;

(i)            The onus of policing the register moves more to third parties instead of the registrar.

(j)            Some claim that similar European countries using this system have a much higher percentage of oppositions and are more open to "trademark trolls".

    11.  The government's bill C-8, Combating Counterfeit Products Act, still remains pending and covers many of the same issues as above. If both acts come into force, then there are detailed transitional provisions included in C31 to ensure consistency between the two laws.

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.

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