Canada: It's Finally Happening—Major New Trademark Law Takes Effect In Canada On June 17, 2019

After five years of uncertainty and speculation, a date has been set for Canada's drastic new trademark laws to come into force. Five months from today, on June 17, 2019, brand owners and local, national and global companies in all industries will be governed by an entirely different trademark regime that eliminates the concept of "use" as a requirement for obtaining registration.

This is the most significant change to Canada's trademark laws in modern history and dramatically changes the landscape of brand protection and enforcement in Canada. This article summarizes the most important revisions of the new Trademarks Act, and discusses the challenges as well as the opportunities that you should be aware of.

"Use" of a Trademark Will No Longer Be Required for Registration

This is by far the most significant change to the law. It will allow an applicant to file for and obtain a trademark registration without ever having used that mark anywhere in the world. Currently, and for the last several decades, an applicant had to have actually used the trademark in Canada, either by claiming a date of first use in their application or by filing a Declaration of Use to complete an application based on proposed use. On June 17, 2019, this requirement will be eliminated and will create both risks and opportunities for companies and brand owners.

Risk of Trademark Squatters and Trolls

Given that applicants will no longer have to claim that they have used the trademark being applied for, the door will be opened to squatters and trolls who will search the world for unprotected brands and obtain registration for these brands in Canada. If your company name or valuable brands are not registered in Canada, it is possible for a third party to register and own your mark without you ever knowing. Trademark trolls already own tens of thousands of trademarks and domain names for unprotected corporate brands, and these numbers are sure to increase. You can avoid this risk by applying for trademark registrations for your business name and valuable brands in Canada within the next five months.

"Use" is Still Important

Although use will not be necessary to obtain registration, it is still an important factor when determining entitlement to trademarks, and in opposition and enforcement proceedings. If you can establish prior use of your trademark, you can successfully oppose a troll's application, or seek to have their registration invalidated. However, to even become aware of pending applications, it is necessary to properly search and monitor your marks and then take the necessary legal steps, all of which will require increased diligence and cost. These costs may be avoided if a dispute over first use is not required in the first place, if you establish your priority by having trademark applications under way before June 17, 2019. In Canada, being first to file will become very important—do not allow trolls to beat you to the Trademarks Office.

Increased Fees

Other changes to Canadian legislation will result in increased fees and a requirement to follow the Nice international classification system for goods and services. Currently, a single application can list an unlimited number of goods and services for a single fee, meaning that a trademark owner can obtain a very broad scope of protection for no additional cost. The new law will not only increase the base filing fee from $250.00 to $330.00, it will include only one class, and an extra fee of $100.00 per additional international class will be required. With 45 possible classes, these fees can be significant. It will become necessary to be selective when choosing which classes to protect, and to use acceptable descriptions of goods and services. By filing applications within the next five months, you can obtain a broader scope of protection and avoid significant filing fees for multi-class applications.

Shorter Renewal Period

The new law shortens the renewal period for a registered mark from 15 years to 10 years. It will also be more expensive to renew trademarks, regardless of the number of classes. Trademark owners should consider renewing their registrations before the new law takes effect, as early renewals are permitted.

Expanded Definition of Trademark

The definition of a trademark will be greatly expanded and changed to the term "sign", and will include virtually anything that functions as an indicator of source, including non-traditional trademarks such as colors, scents, tastes, textures, moving images, and holograms.

International Applications

Canada will be adopting the Madrid Protocol, which allows applicants to file an international trademark application and select member countries in which they want to obtain protection. This is a centralized system that should be a cost saving to brand owners who are seeking expanded international rights. Trademark owners are encouraged to review their portfolio and consider whether they wish to convert existing Canadian registrations and applications into international ones.

Other Changes

Some aspects of the new legislation will make the application process easier and more flexible. For example, it will be possible to "divide" applications to separate contentious portions of an application so that the non-contentious aspects of the application can proceed without being delayed.

On the other hand, some revisions may result in a greater likelihood of objections at the examination stage. Trademark examiners will now be able to object to an application on the basis that a mark is not inherently distinctive. Their ability to raise objections under the current law is more restricted.

What Should I Do Now?

In light of these major amendments to Canadian trademark law, we strongly recommend that every business and brand owner carefully review their portfolio of existing and proposed trademarks and consult with their trademark and intellectual property advisors within the next five months. There are steps that can be taken now to significantly increase your term and scope of protection, reduce costs and perhaps most importantly, avoid the risk that you will be the victim of opportunistic trademark squatters and trolls. Your corporate identity, your trademarks and your reputation are among the most valuable assets of your business—and you still have time to protect them.

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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