Canada: Fall Surprise: Parliament Tables New Trade-Mark Amendments

Last Updated: November 29 2018
Article by David Bowden

More amendments tabled to the Trade-Marks Act before the previous amendments, tabled four years ago, have even been implemented.

On October 29, 2018, Parliament tabled the Budget Implementation Act 2 (Bill C-86), which would amend the Patent Act, Trade-marks Act, and Copyright Act. In addition, the bill contains provisions enacting the College of Patent and Trade-mark Agents Act.

Proposed amendments to the Trade-marks Act include adding bad faith as a ground of opposing applications and invalidating registrations; requiring use as a precondition of alleging infringement in some circumstances; adding some restrictions to the term of official marks; giving the Registrar additional powers to govern the process of opposition proceedings; and requiring leave to file additional evidence with the Federal Court on appeal from a decision of the Registrar.

Amendments to the Trade-marks Act

Bad Faith and Infringement Claims

Unlike for oppositions, the Trade-Marks Act (the "Act") did not previously provide for invalidation of a registration based on the grounds that the underlying application was filed in bad faith. Therefore the amendments add this as a new ground on which an interested party can challenge a registration. This amendment was likely made in response to concerns raised about bad faith registrations which could be obtained under the new Act.

For oppositions, opponents can already challenge an application on the grounds of that the application was made in bad faith. Under the legislation in place today, this ground of opposition is based on the applicant's non-compliance with requirements which must be included in an application, namely a statement that the applicant is entitled to use the trade-mark (pursuant to section 30(i)). However, recent amendments to the Act, that are not yet in force, remove this statement of entitlement from the requirements for applications. The latest amendments effectively add this ground of opposition back into the Act, providing that bad faith constitutes a valid ground on which an application for registration may be opposed.

In another change under the new amendments, an owner of a registered trade-mark will not be entitled to relief based on the infringement or depreciation of its trade-mark rights, unless the trade-mark is used in Canada or special circumstances exist that excuse the absence of use in Canada. This requirement would apply, however, only for the period of three years immediately following the registration date of such trade-mark. As with the amendment which allows the invalidation of registered trade-marks which were filed in bad faith, this proposed amendment likely aims to curb potential abuses of trade-mark law by unscrupulous parties, sometimes known as "trade-mark trolls."

Expanded Powers of Registrar in Oppositions, Objections under Section 11, and Non-Use Cancellations

Proposed amendments expressly allow for the implementation of regulations regarding case management for oppositions, objections under section 11 (for proposed geographical indications), and non-use cancellation proceedings. In particular, amendments allow the Governor in Council to make regulations respecting case management of proceedings by the Registrar. Such regulations could allow the Registrar to fix deadlines for any step of an opposition, for instance, despite any deadline provided for in the Act.

Further, the amendments allow the Registrar to impose costs on parties and to make confidentiality orders in the course of opposition proceedings, objections under section 11 to geographical indications, and summary non-use cancellation proceedings under section 45. The amendments allow the Registrar to make these types of orders, and further provide that such orders may be filed in Federal Court (to allow for enforcement of the orders by the Court).

The amendments allowing the Registrar to impose costs on parties, in particular, are likely to be controversial among practitioners. Yet, if effectively implemented by the Registrar, the power to award costs could dissuade parties from commencing meritless oppositions. Further, costs could disincentivize opponents from adopting "kitchen sink" opposition strategies which allege all possible grounds of opposition (without regard to the particular circumstances of a case). Potential adverse cost awards should be kept in mind, for example, by agents who are tempted to use the new "bad faith" grounds of opposition as casually as practitioners currently use (soon-to-be former) section 30(i).

Finally, the latest amendments give the Federal Court discretion to grant leave to admit new evidence on appeal from the Opposition Board. Under the current legislation, parties can submit new evidence on appeal as of right. Some practitioners adopted a strategy under this legislation which involved filing little to no evidence on opposition to keep initial costs down and filing substantive evidence with the Federal Court only if unsuccessful at first instance. This change will likely curb this approach, if not entirely end it.

Official Marks

Regarding official marks, the proposed amendments clarify that the prohibition on the adoption and use of official marks does not apply if the entity which made the request is not a public authority or no longer exists. This amendment effectively codifies previous dicta made by the Federal Court in TCC Holdings Inc v Families as Support Teams Society, 2014 FC 830 (see para. 31). The amendments further provide that the Registrar may, on her own initiative or at the request of a person who pays a prescribed fee, give public notice that subparagraph 9(1)(n)(iii) no longer applies to the official mark.

This amendment could lead to the removal of numerous official marks currently in force. The official marks of entities which no longer exist or which are not public authorities can serve to block new applications, despite the owners non-entitlement or dissolution. The amendments, therefore, would give some applicants recourse to get rid of potential barriers to the registration of their trade-marks.

Establishment of Regulatory College for Patent and Trade-mark Agents

The College of Patent and Trade-marks Act ("CPT Act") establishes a regulatory body for patent and trade-mark agents, and provides for new offences for unauthorized practice. The establishment of a regulatory body for agents has been the subject of much public discussion, including a public consultation by the Canadian Intellectual Property Office.

The CPT Act sets out a mixed-model of governance for the profession, under which the Minister appoints directors to the board with the remaining directors to be elected in accordance with the College's bylaws. The governance structure, however, allows for a significant degree of government control, as the Minister can appoint a simple majority of directors to the Board. Under the CPT Act, the appointed directors cannot be patent or trade-mark agents. In addition, no director (either appointed or elected) can be a member of an association "whose primary purpose is to represent the interests of persons who provide advice on patents or trade-marks" or a person who was a member of a governing body or committee of an association within the preceding 12 months. This restriction may prove to be controversial, as it would exclude (for example) all members of the Intellectual Property Institute of Canada, with additional restrictions on all committee members for 12 months following their resignation or departure from a committee.

The College's purpose will be to license patent and trade-mark agents in Canada, and to maintain a register of agents which provides the name, contact information, and any disciplinary proceedings or conditions imposed on a licensee. In addition, under the CPT Act, the Board will have the authority to appoint members to the Investigations Committee and the Discipline Committee. These committees will seek to ensure compliance with standards of professional conduct and competence, as set out by a "Code of professional conduct" to be established by the Minister through regulations. The CPT Act further outlines the procedures for investigations and hearings of disciplinary proceedings of licensees.

The CPT Act also creates offences for unlicensed persons who use the title "patent agent" or "trade-mark agent" and who represent themselves as agents. The CPT Act provides for a fine for such infractions of $25,000 for a first offence or $50,000 for a second offence. Offences also exist for representing another person in the presentation or prosecution for applications for patents or trade-marks or in other business before the Patent Office or the Office of the Registrar of Trade-marks. Penalties for violating these provisions on representation include fines of the same amounts indicated above, or in the alternative, imprisonment for a term of not more than six months.

Conclusion

These amendments are not yet in force, and may change during the course of subsequent readings in Parliament. As a result, it is difficult to predict when the changes may come into effect – and even which changes will ultimately make it into the final legislation. What is clear, however, is that intellectual property law in Canada is undergoing a period of massive change, through these amendments, through pending amendments made through the Economic Action Plain 2014 Act No. 1, and through amendments to Canadian IP law necessitated under the renegotiation of NAFTA under the United States-Mexico-Canada Agreement.

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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