Brand owners and brand users, be on alert – big changes
may be coming to Canada's trade-marks laws and some of them
aren't pretty. Some of them are really good developments,
as well, that will put us in step with international intellectual
property law norms, but all of them are going to dramatically alter
the way we view trade-mark protection in this country from now
This will resonate particularly loudly for businesses in the
franchise industry. If you are a franchisor, you need to
understand not only how your (old) trade-marks are protected and
rights to them enforced, but also how your (new) trade-marks will
be applied for and registered in the future. After all, these
marks are your notice to the world that you are doing business
under them and that they are not available for use in connection
with similar products and services. If you are a franchisee,
you are likely spending a lot of money to buy into a brand, and
name recognition is a big part of that. You certainly want to
know that your franchisor has exclusive rights to those marks and
that they won't be vulnerable to modifications as a result of
improper use or infringement allegations.
These changes are coming by way of a federal government bill to
make major amendments to Canada's Trade-marks Act to
prepare Canada for a likely ratification of a number of
international intellectual property treaties, which itself was
largely a step towards preparing for a Canada-European Union free
trade agreement. While some of the changes are superficial
and overdue (e.g. replacing the spelling of "trade-mark"
with the more universal "trademark"; replacing the
antiquated term "wares" with "goods"), some of
the more substantive proposed changes to be aware of are as
Classification of goods and services –
rather than drafting a description of goods and services in
trade-mark applications in "ordinary commercial terms"
only, Canada will adopt the Nice Classification system which
divides goods and services into prescribed classes. While the
predictability and consistency will be nice, it remains to be seen
whether application fees will be charged on a per-class basis, as
is the case in some jurisdictions, which would make Canadian
trade-mark applications costlier.
International registration of trade-marks
– currently, trade-mark owners in Canada need to make
separate applications for their marks here and any other country
where they are seeking trade-mark protection. Under the new
regime, Canada would keep up with international filing norms and
permit applicants to file in numerous international jurisdictions
at the same time.
Eliminating the requirement that a trade-mark be
used – currently, you can apply for a trade-mark in
Canada on the basis of "proposed use" and will then have
3 years to demonstrate actual use before obtaining
registration. The proposed changes will eliminate this
'use' requirement and permit registration so long as the
applicant is the party entitled to the trade-mark (i.e. no other
confusing marks exist) and there is an intent to use the mark in
the future. This will need to all sorts of predicable and
not-so-predictable issues relating to squatters of certain
trade-marks and domain names, and would be a terrible result for
current and future brand-owners.
Term – the current trade-mark
registration term of 15 years would be reduced to 10. This
may weed out trade-marks that have fallen out of use, but is also
an acceleration of the payment of government renewal fees by 5
The modernization of Canada's trade-mark laws to better
facilitate international commerce and intellectual property
protection should be welcomed by the franchise industry.
However, certain of these changes may be catastrophic in their
implementation and enforcement and will hopefully not be enacted
with the balance of the amendments.
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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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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