The Canadian Trademarks Act amendments, which are allegedly coming into force in early 2019, include the removal of the requirement that a trademark applicant declare that it has been using its trademark before it files the application or before registration in Canada. The amendments are meant to bring Canada's laws in line with international treaties. The Canadian government wants these changes to simplify the registration process.
As to the current law and the claim to registration based on use, an applicant can file in Canada based on its actual use of the trademark in Canada, stating a date of first use, or based on proposed use, declaring its intent to use the mark in Canada. When an application is based on proposed use, the applicant must file a declaration of use of the trademark in order to obtain registration. The amendments remove these requirements. The fear is that the effect of the new law will be to clutter the registry with applications for trademarks and then registrations that would likely never be used.
This amendment allows an applicant to register trademarks which it has not used and never intends to use in Canada. Some motives for doing this may include selling the trademark application or registration to a third party at a later date or registering the trademark to block another entity from being able to register the same mark or a confusingly similar mark.
Will the removal of the use requirement simplify the application process – supposedly yes – we will have to see. But, if it does, will this be at the expense of giving trolls/squatters access to the Canadian trademark registration process. Some say that this has already happened. There has been an increase in the filing of trademark applications which claim all or substantially all 45 international classes in the application. These applications have been filed and are sitting in line on the register until the amendments are in place. Currently, Canada has a single filing fee, regardless of the number of international classes listed in the application. Once the amendments are in place, a filing fee per class may reduce the filing of such applications since this will dramatically increase the cost of filing the applications.
These amendments will require applicants to spend more time and money to determine which marks they can adopt and register and which applications they can challenge. It will be difficult to know which entity has true prior rights to a mark and if a challenge against a possibly confusing mark in an application or registration would be successful.
In addition, legitimate brand owners can file for and obtain registration for their marks for lists of goods and services which are broader than the goods they are selling or the services they are providing in Canada. This may be a benefit for the brand owners.
These amendments may mean more marks coming into conflict with each other. This can result in an increase in prosecution issues during the application process, an increase in the number of opposition proceedings and an increase in the number of litigation cases regarding ownership and trademark infringement.
The Canadian government is now starting to think about what to do about this. It announced in April, 2018 that it will add further amendments to the Trade-marks Act. These will require registrants to prove a trademark has been used within three years of its registration (in order to be able to enforce the registration). This potential change is not part of the amendments coming into force in 2019.
It will take brand owners some time to adjust to this system. As well, as a result of these amendments, will we see an increase in trademark trolls or squatters in Canada – the answer is yes!
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