Planning ahead: preparing for changes to Canadian trademark law

The most recent estimate for the implementation of amendments to the Trademarks Act (also known as the ‘coming into force’ date) is early 2019. Draft regulations have been published, providing more information on how many of the new provisions will be implemented. The changes will bring opportunities for Canadian and international trademark owners, and it is not too early to plan for them. The following report:

• reviews the existing and proposed changes to rules on filing, renewal, opposition and cancellation proceedings;
• highlights some transition issues; and
• offers tips for trademark strategy now and following the implementation of the amendments.

Trademark filing
Accepted marks currently include words, designs, distinguishing guises (shapes of goods or packages) and sounds. Letters and numbers are also registrable. Colour alone is not registrable. As of the coming into force date, acceptable marks will also include signs such as colour, moving images, modes of packaging, figurative elements, scent, taste, texture and positioning of marks. However, most non-traditional marks will require evidence of distinctiveness in Canada to obtain registration. 

Trademarks
Since number, letter and sound marks may now be registrable without evidence of distinctiveness, it would be advisable to file such marks before the coming into force date.

Goods and services
For now, the Nice Classification is not mandatory, but the Canadian Intellectual Property Office (CIPO) is actively encouraging voluntary classification. If instructions are received with class information, classes are included in new filings; if not, classes may be selected (if clear) or further instructions may be sought at a later date. The CIPO has informally classified all registrations and pending applications, and recommends that classifications in existing registrations are reviewed. Within approximately two months of the coming into force date, pending applications that have yet to be classified will require classification to proceed. On the coming into force date, classification will be required for all new applications, and transition rules will apply to phase in classification for all registered marks.

Since classification will be required for all pending applications as of the coming into force date, having to add classes may delay prosecution; therefore, including classes now is advised. While classification of registrations can also be done at any time, for any multi-class registration, it may be preferable to postpone classification until either requested to do so by the CIPO or closer to renewal. 

Fees
A single government filing fee (C$250 for online applications) is currently in place, regardless of the number of classes of goods or services. The draft regulations propose that, from the coming into force date, government filing fees will be C$330 for one class and C$100 for each additional class for applications filed online (C$100 more for paper applications). 

Given the increase in fees for multi-class applications, filing now is advisable while filing fees are lower. As noted below, ‘use’ as a registration requirement will be eliminated and applications filed (regardless of filing grounds) now will probably be registrable anywhere without use. This offers strategies for maximising rights that should be discussed with your trademark adviser.

Filing grounds
For now, applicants must identify a filing ground, which can include:

• proposed use in Canada;
• use in Canada (with a date of first use in Canada required for each general class of goods or services); or
• use anywhere plus a home country application or registration.

If proposed use is relied on, a declaration of use must be filed before registration. If use and registration is relied on, a certified copy of the home country registration must be filed before approval. On the coming into force date, filing grounds will no longer be required, and any applicant that has used or intends to use its mark may file. For applications already filed and still pending as of the coming into force date, a declaration of use will no longer be required, and it will be unnecessary to submit a certified copy of any home country registration.

Currently, there are accepted guidelines for extending deadlines to file declarations of use before registration. By keeping an application pending until the coming into force date, it may be possible to register marks for broader lists of goods or services. However, keep in mind that at any time following the third anniversary of a registration, the mark may be challenged by a third party for non-use, and failure to show use in Canada, or special circumstances excusing non-use, may result in cancellation of the registration.   

Priority claims
At present, priority claims may be added to a Canadian application based on a first-filed country of origin or home country application or registration for the specific goods or services, if the Canadian application is filed and the priority claim added within six months of the home country filing. No extensions of that date are permitted and the claim cannot be withdrawn. As of the coming into force date, it will be possible to base a priority claim on any first-filed application in a country of origin. One seven-day extension, filed after the original priority deadline, may be permitted. It will also be possible to withdraw the claim.

Examination
CIPO’s examination of new applications is currently based on specific grounds of entitlement and registrability. From the coming into force date, examination will also be based on distinctiveness, and examiners will be permitted to request evidence of distinctiveness in Canada. It is uncertain what evidence will suffice to demonstrate such distinctiveness.

Overcoming name and descriptiveness objections
At present, any objection based on name or surname significance or clear descriptiveness may be overcome by filing evidence that the mark was already distinctive in Canada at the filing date (Section 12(2) of the Trademarks Act) or, if the mark is also registered by the applicant elsewhere, that the mark is not without distinctive character in Canada, including by virtue of use elsewhere (Section 14 of the Trademarks Act). The second exception is used by non-Canadian applicants and is generally viewed as having a lower threshold of evidence. As of the coming into force date, Section 14 exceptions will be eliminated, and it appears that any owners of applications that are relying on Section 14 to overcome name or descriptiveness objections that have not yet been advertised as of the coming into force date will be advised at that time that they must file suitable evidence of distinctiveness in Canada, which may require additional affidavits or may not be feasible at all.

Many practitioners believe that given the time and effort required to compile acceptable evidence under Section 14, owners should prepare and file the necessary affidavits and have the evidence reviewed by the CIPO. However, taking those steps may no longer be practical given the upcoming changes eliminating Section 14 claims.

Letters of protest
During examination, the CIPO refuses to review any correspondence relating to an application from a party other than the applicant or its agent. A third party may not attempt to draw its rights to the attention of an examiner in the hope of prompting a confusion citation. As of the coming into force date, the CIPO has proposed a procedure permitting correspondence from third parties, but it is expected that the CIPO will merely accept the letter, and that there will be no additional communication between the CIPO and third parties relating to such letters.

This new procedure, which will be explained in more detail in a practice notice expected to be published by the CIPO closer to the coming into force date, suggests that watch systems that may now focus on advertisements should also cover pending applications, giving trademark owners the chance to prompt examiners to make confusion objections and hopefully avoid costly opposition proceedings.

Allowance
At present, any application that is allowed either after the expiry of the opposition term or after a successfully defended opposition requires, before registration, payment of a registration fee, plus filing of a declaration of use if the application is based on proposed use. As of the coming into force date, declarations of use will no longer be required. Registration fees will be payable for any application pending at the coming into force date, but applications filed on or after this date will no longer need to pay a registration fee and will proceed to registration on completion of the opposition term or following a successfully defended opposition.  

The abovementioned comments regarding the timing of declarations of use and whether it is advisable to file now or hold off pending the coming into force date apply here.

Registration
Registration certificates currently show full information on the applicant’s filing basis, including any claims of use in Canada or abroad, or when a declaration of use is filed. After the coming into force date, registrations will not include such details (based on the change regarding filing grounds). This will probably complicate risk analysis, making marketplace searching more important.

Renewal
Term
At present, registrations are in force for renewable terms of 15 years. As of the coming into force date, the term will be 10 years. The draft regulations include complicated provisions for calculating deadlines for registrations that are due for renewal after the coming into force date but renewed before then as well as registrations that are due for renewal before the coming into force date and renewed in a grace period after that date. Further, any registrations due for renewal on or after the coming into force date, but which are renewed before the coming into force date, will be issued a new certificate of renewal clarifying that the term is only 10 years – a longer term cannot be acquired by early renewal of marks due for renewal after the coming into force date.

Grace period
The grace period is currently six months from the expiry of the renewal term. The draft regulations set out two dates that will apply as of the coming into force date; namely, the latest of six months from the expiry of the term or two months from the notice from the CIPO of the failure to renew. Trademark professionals believe that this is complicated and a single date is preferable.

Renewal fees
Government fees for renewal are currently C$350 per mark, regardless of the number of goods or services. As of the coming into force date, renewal fees will be calculated per class, which the draft regulations set at C$400 for the first class and C$125 for each additional class. There may be savings on class fees with early renewal, before the coming into force date, but this will be clarified once the regulations are finalised.

Madrid Protocol
At present, Canada is not a member of the Madrid Protocol. Canadians seeking international protection must do so by filing national or regional (eg, EU) marks. Non-Canadians must file directly with the CIPO. As of the coming into force date, Canada will become a member, which will permit Canadian companies to take advantage of streamlined foreign filing opportunities and allow non-Canadian applicants to designate Canada when using the Madrid Protocol to expand their international trademark protection.

Since the impact of Canada’s accession to the Madrid Protocol will be to make international filings easier – not only for Canadian businesses seeking international trademark protection, but also for companies abroad to obtain Canadian rights – it is expected that, after the coming into force date, there will be even more filings in Canada by companies abroad. Trademark owners should assess whether their Canadian trademarks are well protected and ensure that the acquisition and enforcement of rights are not complicated by other applications.

Oppositions
Several changes are expected to opposition proceedings following the coming into force date. The draft regulations propose changes to the deadlines and order of proceedings, most specifically relating to timing and the impact of cross-examinations. The rules on onus, which are not likely to change, will make it more difficult for opponents to show non-entitlement, both since use information will no longer be part of the filing information and the probable difficultly in showing a lack of intent to use a mark. The CIPO has predicted an increase in the volume of oppositions, likely resulting from a combination of more filings and broader goods or services lists relating to the elimination of use requirements.

Non-use cancellation proceedings
Some changes will be made to procedure and timing. The elimination of use as a prerequisite to registration will result in many marks on the Patent Register that are not used at all, or not used for some of the registered goods or services, with the result that there will likely be more challenges for non-use.   

Transfers
The CIPO currently requires evidence to support a transfer arising from an assignment, merger or amalgamation. No evidence is required for a change of name. As of the coming into force date, the CIPO will require only the name and postal address of the transferee.

Associated marks
At present, the CIPO associates similar marks owned by the same company. Therefore, any change (eg, assignment, merger or change of name or address) must be made against all associated marks. Failure to include any associated mark in the list of marks to be changed will prompt an objection from the CIPO. As of the coming into force date, the CIPO will no longer associate marks and the implications for recording changes will be eliminated.