Trademark Enforcement Tips and Traps: Navigating Canada’s Trademark System One Year After the Major Changes

July 06, 2020

On June 17, 2019, the most significant changes to Canada’s trademark system in over 60 years took effect.  At the one-year anniversary of the changes, we are assessing the impact that they have had on Canadian trademark practice. We will provide some practical tips and also identify some traps in dealing with the altered trademark landscape, in this case as it relates to enforcement.

Use Still Matters

The most fundamental shift wrought by the changes was the elimination of the requirement to “use” a trademark before obtaining a registration for the mark, a major departure from the foundation of Canadian trademark law.  Applicants are no longer required to provide details regarding their use of the mark (or lack thereof) at the time of filing, nor are they required to file a declaration of use in order to secure a registration. Furthermore, even if applicants desire to voluntarily include such details in their filings, they cannot do so. As such, use information will simply not be included in the Canadian Intellectual Property Office (“CIPO”) database going forward.

However, it is important to recognize that use remains relevant in Canadian trademark law. The regime of common law marks remains intact, meaning that parties can obtain rights through their use of a mark. Canada has not become a first-to-file jurisdiction; rather, use is an important factor in determining entitlement to a mark. If there is a dispute between two parties regarding confusingly similar marks, the party with prior rights (based on either a registration or common law rights arising from prior use) will prevail.

Use also remains critical for maintenance of trademark rights. Any registration that is more than three years old can be subject to non-use cancellation proceedings. Historically such proceedings covered all of the goods and services in a given registration. One change in the new regime is that non-use cancellation proceedings can now be targeted at a subset of goods and services (or any single good/service).

Another implication of this change is that additional diligence is required to clear a trademark for use and/or registration. Since details regarding a third party’s use of (or intent to use) its mark are no longer contained in the CIPO database, it is more difficult to evaluate risk based on competing rights. Given these difficulties, it is expected that trademark owners will ultimately shoulder more responsibility and costs for addressing competing rights by way of opposition proceedings and summary cancellation proceedings.

Finally, the elimination of the use requirement has led to an increase in trademark “trolls”.

Trademarks Trolls

As noted above, the elimination of the use requirement has made Canada a more friendly jurisdiction to trademark trolls (also known as non-practicing entities). For example, one company filed more than 400 applications in all 45 classes before per-class filing fees were introduced on June 17, 2019. In order to defend against troll activities brand owners should: (i) file applications for their key marks to avoid being blocked by a troll application; and (ii) monitor the CIPO database to catch any relevant troll applications early on. If a troll application is identified at the appropriate time, brand owners may respond by either filing a notice of third-party rights or, upon advertisement, commencing an opposition proceeding.

Notification of Third-Party Rights

The notification of third-party rights is a new measure that came into effect in June 2019. It allows third parties to bring to CIPO’s attention certain information which may impact the registrability of a pending application. There are three permissible grounds, namely: (i) the applied-for-mark is confusing with a registered trademark; (ii) the applicant is not entitled to registration of the trademark as it is confusing with a mark that is the subject of an earlier-filed application; and (iii) the application includes a registered trademark in the list of goods and services.

Changes Not Yet Implemented

Although most of the changes that the Canadian government has announced in recent years were implemented as of June 17, 2019, there are some important changes that have yet to take effect.

Currently, on an appeal of a trademark opposition decision to the Federal Court, a party can file additional evidence as of right. Under changes that have been announced but not yet implemented, a party will need to seek and obtain leave from the Court before it will be allowed to file new evidence on the appeal.

When implemented, changes to opposition and non-use cancellation proceedings will permit the Opposition Board to award costs of the proceeding to a party and give the Board jurisdiction to issue confidentiality orders.

Another change that has been approved but not yet implemented relates to enforcement proceedings that are commenced within three years after registration of a trademark. In such circumstances, the registrant will not be entitled to relief unless its registered mark was used in Canada at some point during the three-year period after registration or, alternatively, special circumstances exist that excuse the absence of use during that period. This change could have severe consequences for any foreign trademark owner who has not yet commenced use of a recently-registered mark in Canada since the change would impair the owner’s ability to maintain its right to the exclusive use of its mark.

Lastly, other changes will, when implemented, effectively negate the impact of an official mark in respect of which public notice has been given of a public authority’s adoption and use if the mark owner in question ceases to exist or ceases to be a public authority. In view of the fact that official marks do not need to be renewed or otherwise maintained, this change to Canada’s trademark legislation will provide some relief to third parties who encounter an official mark notice.

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