Canada and the United States enjoy one of the world's
largest, strongest and most comprehensive bilateral trade
relationships in the world. Every minute, $1.2 million worth of
goods and services cross the world's longest undefended border.
Over the years, through deliberate and concerted efforts in both
countries, we have harmonized our regulatory environments to
encourage and reduce barriers to trade. Also, for some years both
countries have shared a regulatory framework for trade-marks built
on the fundamental concept of "use".
Trade-marks are an important consumer protection device and a
key component of an efficient market economy -- "a kind of
shortcut to get consumers to where they want to
go".1 Both Canada and the United States tie their
trade-mark registration systems to the marketplace by requiring
commercial use as part of the quid pro quo for owners to
enjoy exclusive rights. In some cases, the United States goes as
far as to require trade-mark owners to provide physical specimens
of use rather than relying on a statement of the owner. Tying
trade-mark rights to "use" allows both countries to
provide consumers and businesses trade-mark registration systems
that mean something. With some assurance that many unused marks are
removed from the active registers before or after registration,
decisions to invest in trade-marks can be made with a degree of
The Canadian government is poised as part of an omnibus budget
implementation bill to dismantle this use-based system on the
premise that doing so will increase the speed and efficiency of the
registration process. The bill introduces other worthwhile changes,
but we view it as a mistake to:
remove the requirement for applicants to identify a date of
first Canadian use
remove the requirement for applicants to provide details for
foreign use and registration
remove the requirement for applicants to file a declaration of
use before obtaining registration for applications filed on the
basis of proposed use.
We appreciate the need to position Canada to adhere to
significant international trade-mark treaties which can be done
without removing the above conditions. However, surrendering the
use requirements is false economy. If this bill passes in its
present form, those with no legitimate interest in trade-marks will
be able to obtain enforceable rights to the detriment of others who
have built goodwill through actual use or who have a genuine
intention to use a mark in Canada. We shall trade yet to be
measured efficiencies for less certainty, more oppositions, more
litigation, and a less meaningful trade-mark register. Trade-mark
owners can also expect to face additional investigations to
evaluate risks in clearance searching for new marks. Costs will
increase for business.
Canadian and foreign owners of Canadian trade-marks should urge
the federal government to undertake further study with input from
relevant user groups before pulling the use linchpin from our
1Mattel, Inc. v. 3894207 Canada
Inc. SCJ No. 23
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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