Over the last few years, there has been increasing use by the Canadian Trade-marks Office ("TM Office") of a provision in the Canadian Trade-marks Act ("TMA") that permits examiners to approve trademark applications for advertisement subject to prior written notice to owners of potentially confusing registrations (under TMA, s. 37(3)). This practice shifts to registrants more of the responsibility for protecting their marks on the Register, and, while statistics are not yet available, is likely to ultimately result in more oppositions.
Examination of trademark applications
Canadian trademark applications are examined for compliance with technical filing details, as well as entitlement and registrability. The term "entitlement" refers to competing rights between trademark applicants and trademark/trade name users, generally determined by first to use in Canada or first to file a trademark application (TMA, s. 16). While Canada is not a "first to file" jurisdiction, there are advantages in being first to apply. "Registrability" focuses on issues such as confusion with registered marks, as well as inherent registrability issues such as name, surname and descriptiveness significance, plus interaction with other rights, such as official marks, university/college marks and marks of protected organizations, such as the government and the Red Cross.
Canadian examiners usually review new applications within six months of filing. Traditionally, examiner objections, including those based on confusion with a previously filed application and/or registration, are made in writing, and the applicant is given six months (which can be extended) to respond. If the applicant's first reply satisfies the examiner that the applicant is entitled to registration and that the mark is registrable, then the application will be approved for advertisement in the Trade-marks Journal, at which time, there is a two-month (extendable) opposition term. If the applicant's first reply does not persuade the examiner to withdraw any objections, a letter maintaining the objections can be issued, and an applicant may have up to two more chances to submit that the confusion objection should be withdrawn. If the examiner is satisfied that the application is not registrable or the applicant is not entitled, the application will be refused.
Examiners may be "in doubt" about confusion
Section 37(3) of the TMA provides that where the Registrar is "in doubt whether the trade-mark claimed in the application is registrable, he shall, by registered letter, notify the owner of the registered trade-mark of the advertisement of the application". Until recently, this section was infrequently used by the TM Office and only after the applicant had typically made several submissions seeking to persuade the examiner to withdraw any confusion objections. In fact, occasionally, applicants would include, as part of written submissions arguing against confusion, that should the examiner not be persuaded that the objection ought to be withdrawn, the examiner could choose to send a notice to the registrant under s. 37(3), the applicant's hope, of course, being that the registrant would not be as concerned about confusion as the examiner.
In the last few years, there seems to be both a difference in the use of s. 37(3) by the TM Office, and a marked increase in the number of notices that are being issued. In Bereskin & Parr's Toronto office alone, during 2015 there was an increase of over 300% in the number of s. 37(3) notices sent by the TM Office to registrants, advising of the advertisement of such "doubtful" trademarks, compared to 2012. Instead of raising objections based on confusion with registered marks and providing the applicant with one or more opportunities to reply, some examiners are simply advising the applicant that its application will be advertised subject to notice to a registrant. On some application files, s. 37(3) notices are being sent out to many registrants.
This may not reflect a dramatic increase in tough examination cases that are actually doubtful, but instead, a new examination trend in the TM Office. Whereas applicants traditionally have had the opportunity to argue (in several submissions) that marks are not confusing, and s. 37(3) notices were rarely used, examiners increasingly seem to skip that stage of examination (or only to give applicants a single chance to overcome an objection), and are leaving the harder question of whether marks are confusing, or not, to the owners of registered marks. These registrants must then decide whether to oppose, seek a settlement or do nothing.
Examination can be a time-consuming process, for both the TM Office and applicants. This new practice may have the benefit of speeding up examination (increasingly important when Canada starts to accept applications filed under the Madrid Protocol, which sets ambitious examination timelines), and letting registrants, as opposed to examiners, worry about the issue of confusion. However, it is somewhat at odds with both the obligations of relative examination under the current TMA (which do not appear to change under the proposed amendments), and past comments from the TM Office that it must "maintain the integrity of the Register".
Implications of increased use of "Doubtful Case" Notices
The increase in s. 37(3) notices impacts current applicants and registrants, as well as those searching the Register when making tough decisions about availability of new marks. For applicants, examination could be faster, but they now have more exposure to possible oppositions due to specific notice to registrants of the advertisement of marks. For registrants, the fact that the TM Office examiner was "doubtful" of confusion lends credibility to taking the position that the applied-for mark is confusing. This, in the long run, is also likely to lead to more oppositions, or at least more extensions of time to sort out how to respond. In addition, registrants now find themselves being compelled to oppose applications that might not have reached advertisement if the examiner had actually refused the application. To the extent that knowing whether the TM Office views marks as confusing (or not) can help in making decisions about new marks. Businesses relying on Register searching will now be less certain if they see that the examiner has chosen not to decide if marks are confusing, but instead is left in doubt.
This current trend in the Canadian TM Office seems to be evolving to a middle ground between "full" examination and the European concept of no relative examination. It is, in concept, not unlike the practice adopted for Community trademarks ("CTMs") where a search is done by the CTM Office, and the results shared with owners of any mark noted on the search, leaving it to those owners to decide whether to oppose. This practice has led to a rate of opposition in Europe that is much higher than is currently the case in Canada. It remains to be seen if the rate of doubtful cases will continue to grow, and with it, the rate of oppositions in Canada.
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