Canada: Bill Proposing Significant Changes To Canadian Trademark Law Receives Royal Assent

Bill C-31, which contains sweeping amendments to the Canadian Trade-marks Act, received Royal Assent on June 19, 2014. While it may be another six months to a year before the Bill is proclaimed into force and the changes take effect, there are steps that brand owners can take now that may save on government and legal fees and achieve enhanced protection for trademarks.

Key Changes

The amendments in Bill C-31 are intended to harmonize the trademark filing and registration process in Canada with standardized procedures found in two international treaties (the Singapore Treaty and the Nice Agreement), and prepare for the implementation of a third international treaty that will permit access to an international registration scheme (the Madrid Protocol).

The amendments will simplify the trademark application process by eliminating the requirement to specify whether an application is based on use or proposed use of the trademark in Canada, or use and registration of the trademark abroad. Also eliminated is the need to file a Declaration of Use before registration, currently required if an application is based on proposed use in Canada.

However, in order for an application to be valid, the applicant must be using or propose to use the trademark in Canada, and be entitled to use the trademark. In assessing entitlement, prior common law trademark or trade name rights will continue to trump a subsequently filed application or subsequent use of a confusingly similar mark. Importantly, the Trademarks Office will continue to examine applications based on possible confusion with prior pending and registered trademarks, and prior rights owners will retain the ability to oppose an application and attack a registration based on prior use of a confusingly similar trademark or trade name. The ability to invoke a summary procedure to cancel a registration if the trademark has not been used for three consecutive years also remains intact.

In addition, while goods and services will still need to be defined in applications in "ordinary commercial terms" (interpreted to require a higher degree of specificity than in other countries), goods and services also will need to be grouped and classified according to the international Nice Classification scheme established by the Nice Agreement, with the Registrar having final say. The Registrar also will have the discretion to require owners of existing trademark registrations to comply with this requirement.

Another key change is the reduction of the term of a trademark registration (and renewal) from 15 years to 10 years.

Proactive Strategies

Some of the proactive strategies that brand owners can employ now are set out below.

1. Request Renewal Now

The term of registration and renewal will be reduced from 15 years to 10 years, and the implementation of the Nice Classification system may result in the adoption of a class-based government fee system for renewal.

Accordingly, requesting renewal now may result in cost savings, especially for owners of registrations covering multiple classes of goods and services.

Historically, the Trademarks Office permitted registrations to be renewed up to one year in advance of their renewal deadline. However, in May 2014, the Trademarks Office changed its practice and began accepting renewal requests 14 years in advance of renewal deadlines (i.e., registrations due for renewal up to December 2028 inclusive), an attractive option particularly for house marks and other key trademarks. It remains to be seen whether the Office will revert back to its prior practice now that Bill C-31 has received Royal Assent.

2. Keep Allowed Proposed Use Applications Pending Through Extensions

The elimination of the requirement to file a Declaration of Use for proposed use applications will permit owners of allowed proposed use applications to complete the registration process without having to first use the mark in Canada.

Accordingly, if your company or client owns an allowed application and does not anticipate commencing use of the mark in Canada with all the goods and services specified in the application within the next six months to one year, then it may make sense to keep the application pending through extensions of time until the changes take effect.

If no further extensions of time are available, then the registration process should be completed prior to the final deadline, and a new application should be filed for the goods and services with which use in Canada could not yet be declared.

3. Actively Apply to Register Trademarks Now

It is anticipated that the number of trademark filings (particularly by foreign brand owners utilizing the international registration scheme) will increase. Owners of prior rights in unregistered trademarks can only prevent the registration of confusingly similar trademarks by initiating opposition proceedings, which can be costly.

Since the Trademarks Office will continue to examine applications for possible confusion with prior pending or registered marks, applying to register trademarks should block applications for confusingly similar marks at the examination stage. Since opposition costs far exceed registration costs, adopting aggressive filing strategies now may save considerable legal fees. Furthermore, since pending and registered marks are more likely to be caught by trademark clearance searches, filing now may discourage others from adopting confusing similar trademarks.

In addition, the implementation of the Nice Classification system may result in the adoption of a class-based government fee system for filings, and so filing now may also save in government fees.

4. Actively Monitor the Trademark Register

Since the simplification of the registration process and the opportunity to register marks through the Madrid Protocol is likely to increase trademark filings, it will become even more important to actively monitor the trademark register for potentially confusing marks.

The amendments contained in Bill C-31 will significantly impact trademark clearance, registration, and enforcement strategies in Canada. Complicated transitional provisions and co-ordinating amendments that relate to another pending bill (Bill C-8 titled the Combating Counterfeit Products Act ) add another layer of complexity. By taking proactive steps now, brand owners may be able to realize cost savings while achieving maximum protection for their trademarks in Canada.

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