Canada: Legal Trends 2016: Intellectual Property

ONE | LEGISLATIVE CHANGES

The previous federal government committed Canada to sweeping changes to the legislation and regulations governing virtually every category of intellectual property in the country. Some of these changes have largely already taken effect. These include amendments to the Copyright Act and Trade-marks Act to introduce customs enforcement measures against counterfeit goods. Other changes, such as the introduction of privilege for certain communications between clients and their patent agents and trade-mark agents, will come into force on a date that has been fixed. Still, other changes, such as those relating to Canada's adherence to the Hague Agreement Concerning the International Registration of Industrial Designs and its adherence to the Madrid Protocol, have been enacted, but no date has been fixed for when they will take effect. They await finalization of treaty adherence, the introduction of regulations and changes to the infrastructure of the Canadian Intellectual Property Office (CIPO).

CIPO recently announced that the most significant changes to the Trade-marks Act will not be implemented until 2018, at the earliest. These changes include: (1) elimination of "use" as a requirement for trade-mark registration, (2) a broadening of the categories of registrable marks, (3) a shortening of the term of a registration and subsequent renewal terms from 15 years to 10 years, and (4) the fact that adoption of the Madrid Protocol will not be implemented until at least 2018. The delay in the implementation of these changes will, no doubt, impact trade-mark owners over the next few years. For example, the opportunity to obtain a 15-year registration term before the changes take effect may result in an increased number of trade-mark applications being filed in the next year.

TWO | TRANS-PACIFIC PARTNERSHIP AGREEMENT

If adopted by Canada's new federal government, the recently announced Trans-Pacific Partnership (TPP), an ambitious economic and free trade agreement between Canada and 11 other countries that represent approximately 40 per cent of the world's economy, will require some important changes to Canada's intellectual property (IP) laws. One example is the replacement of Canada's "notice and notice system" with a "notice and takedown system." Under the former system, an Internet service provider (ISP) is required to notify a potentially infringing customer of the ISP's receipt of a complaint from a copyright holder. Under the latter system, the ISP will be compelled, under certain circumstances, to remove the allegedly infringing material from its customer's website. The TPP will also require Canada to extend the copyright term for several categories of works.

THREE | LITIGATION BY NON-PRACTISING ENTITIES

For a number of years, more than half of all patent infringement proceedings commenced in the United States have been filed by non-practising entities (NPEs). Despite the prevalence of NPE patent litigation in the U.S., it was relatively uncommon for these NPEs to file suit in Canada, even for NPEs based in Canada.

However, this situation may be changing. In recent months, NPEs have filed several patent infringement proceedings in Canada's Federal Court. At the same time, the U.S. has introduced measures to discourage NPE litigation. It is uncertain whether there is a correlation between these two developments. It is also too early to predict whether the recent increase in NPE litigation in Canada is a harbinger of things to come. We continue to monitor the situation.

FOUR | IP CLASS ACTIONS

Traditionally, most Canadian IP class action litigation has arisen from claims that a defendant has infringed the copyright of large groups of business owners or professionals. Quite often, the claimed damages have been relatively small on a per-plaintiff basis. During the past year, however, plaintiffs have filed actions in which the purported class is seeking certification of claims involving allegations of patent abuse.

In each of these cases, the plaintiffs allege that a pharmaceutical manufacturer caused harm to others by obtaining and enforcing its rights in an invalid patent for a drug in order to delay market entry of a drug's generic equivalent. The potential classes of plaintiffs in these cases are quite broad. They include virtually every participant in the channels of trade, such as distributors, pharmacies, insurers and consumers. The pleaded causes of action are also rather broad, including unlawful interference with economic interests, waiver of tort, unjust enrichment and conspiracy.

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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