Canada: Will New Trademark Regime Raise The Bar?

Last Updated: July 11 2016
Article by Susan Keri and Meghan Dillon

The new Trademarks Act's registration requirements and provisions on distinctive marks look set to have a significant impact on how pharmaceutical companies manage their trademark strategies

Canada continues to await implementation of amendments to the Trademarks Act set out in Bill C-31, the Economic Action Plan 2014 Act (No 1). The bill received royal assent in June 2014 and is expected to be implemented in 2018. The stated goal of the amendments is to bring Canada into line with international practice, allowing it to accede to the Madrid Protocol, the Singapore Treaty and the Nice Agreement. The legislative amendments are likely to present both benefits and challenges for applicants in all industries, with the pharmaceutical industry being no exception.

Dispensation of use as registration requirement

The most notable change to be introduced by Bill C-31 – and the one that has received the greatest amount of attention – is the dispensation of use as a requirement for registration.

At present, trademark applications must be based on at least one filing ground. The most common filing bases are:

  • use in Canada;
  • proposed use in Canada; and
  • use and registration abroad.

While an application can be filed in Canada on the basis of an intention to use in the country, it will not issue to registration until a declaration of use is filed attesting to commercial use of the mark in Canada. The registration will issue only for those goods or services for which the mark has been put into commercial use within Canada.

The requirement of having to file a declaration of use to secure registration is often particularly onerous for pharmaceutical trademarks. Pharmaceutical products cannot be sold in Canada until the drug has been approved by Health Canada, and ordinarily neither sample shipments nor use of the mark in the context of clinical trials constitutes trademark use sufficient to support the filing of a declaration of use. Given the lengthy drug approval process in the country, there is often a long delay between the allowance of a pharmaceutical trademark application and the filing of a declaration of use, necessitating the filing of multiple extensions. Indeed, applications must often be re-filed altogether once the maximum allowable extension period has expired.

Once the amendments to the act are implemented, trademark application filing grounds will be eliminated and applicants need only be "using or propose to use, and be entitled to use" the applied-for mark in Canada. Under the new regime, applications will issue to registration simply on expiry of the opposition period, regardless of whether use has commenced in Canada or anywhere else in the world. This means that trademarks covering pharmaceutical products could issue to registration long before the products are approved for sale by Health Canada. Further, the elimination of use as a prerequisite to registration will enable pharmaceutical companies to secure trademark registrations for marks covering virtually all types of pharmaceutical product and service, without ever having used the mark in Canada.

Non-traditional marks and examination for distinctiveness

While the dispensation of use as a prerequisite to registration is likely to be a welcome change in the pharmaceutical field, other amendments may not be so favourable.

Under the existing regime, there is no examination for distinctiveness, with the exception of distinguishing guise applications (ie, the shape of the goods or their packaging), where applicants are required to file evidence of distinctiveness. The amendments eliminate the concept of a distinguishing guise as a distinct type of trademark, replacing it with an expanded definition of 'trademark' to include various non-traditional marks. While this represents a significant shift towards acceptance of a wider variety of non-traditional marks (eg, scents, tastes and textures), applications to register non-traditional marks – and indeed all marks – will be subject to examination for distinctiveness. If the registrar is of the view that an applied-for mark is not inherently distinctive, the applicant will be required to file evidence that the mark had acquired distinctiveness across Canada as of the trademark application filing date, and the registration will be restricted to the provinces and territories in Canada where the mark has been shown to be distinctive.

Examination for distinctiveness will be particularly relevant in the pharmaceutical field where trademark protection is often sought for non-traditional marks such as the colour of pharmaceutical tablets or capsules. Colour marks are considered inherently registrable in Canada (Smith, Kline & French v Registrar, [1987] 2 FC 633) and are not currently subject to examination for distinctiveness. However, under the new trademark regime, evidence of distinctiveness will be required for applications to register all non-traditional marks, including colour marks.

Oppositions and litigation in Canada demonstrate how difficult it is for pharmaceutical companies to establish that non-traditional marks (eg, colour tablets or capsules) have become distinctive. There is concern that the same high threshold for establishing distinctiveness will be applied at the examination stage, once the new regime is implemented, making it both more expensive and more difficult for such marks even to reach the opposition phase, let alone make it through to registration.

The recent Federal Court decision in Pfizer Products Inc v Canadian Generic Pharmaceutical Assoc (2015 FC 493) highlights the high evidential burden on an applicant in establishing that colour applied to a pharmaceutical tablet or capsule serves to distinguish the rights holder's goods from those of others. The case dealt with Pfizer's application to register a trademark consisting of the colour blue applied to the whole of the visible surface of a diamond-shaped tablet. The application was successfully opposed by the Canadian Generic Pharmaceutical Association. The Trademarks Opposition Board held while the Viagra tablet design was distinctive among patients, Pfizer had failed to establish that it was also distinctive among physicians and pharmacists – all part of the relevant consumer group.

Pfizer appealed the decision, arguing that the board had erred in its application of the test for distinctiveness by requiring that distinctiveness be established among patients, physicians and pharmacists.

The Federal Court upheld the Trademarks Opposition Board's decision that the Viagra tablet design was not distinctive of Pfizer or any single source. The court agreed that distinctiveness need not be established in each of the consumer sub-groups, but rather that a significant degree of recognition among the whole constituency of ordinary consumers – including physicians, pharmacists and patients – was required. However, it nevertheless found that the limited use which physicians, pharmacists and patients made of the appearance of the Viagra tablet design for identification purposes was insufficient to establish the distinctiveness required for trademark registration.

The case confirms that the test for distinctiveness is the same in the pharmaceutical industry as in any other: the applicant must show on a balance of probabilities that the relevant consumer associates the trademark with a single source to a significant degree. However, in the pharmaceutical context, where the relevant consumer includes patients who use the products, physicians who prescribe them and pharmacists who dispense them, and where purchasing decisions are usually made by professionals or on the advice of professionals, the distinctiveness of such marks will be inherently more difficult to establish.

Given the difficult threshold for establishing distinctiveness of non-traditional marks in the pharmaceutical field and the fact that these types of application are virtually always opposed, examination for distinctiveness will simply add a further hurdle, making it even more difficult to register non-traditional marks such as colour tablets or capsules in the pharmaceutical industry.

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