The long-awaited changes to the Trademarks Act will come into force on June 17, 2019.
In June 2014, significant changes to the Trademarks Act were approved by the Government. After more than 3 years of uncertainty, the new Trademark Regulations were published on November 14, 2018 in the Canada Gazette, paving the way for implementation of the new legislation next summer.
According to the Government, the purpose of the new legislation is to harmonize Canadian trademark law with a number of international treaties and international norms, which will align Canada’s laws with those of its major trading partners. Canada’s accession to various treaties will ensure that Canadian businesses remain competitive in international markets, in addition to reducing costs and complexity for all trademark owners.
While this may be the case, the changes are significant and will give rise to many issues for businesses and brand owners. Now is the time to review what these changes mean for you.
To guide you during the transition, we have prepared:
An overview of the key changes
What the changes mean for existing trademark applications and registrations
Impact of the changes
Recommendations for businesses and brand owners
OVERVIEW OF KEY CHANGES
Broader Definition of “Trademark”
The definition of a “trademark” has been expanded to include non-traditional trademarks including a shape, sound, smell, taste, texture, hologram, colour, or moving image. Any sign that distinguishes the products and services of one trader from those of others may be protected.
No More Filing Bases when Filing an Application
Under the current legislation, it is necessary to indicate a basis at the time of filing an application, i.e. use, intent to use, use and registration abroad or making known. Under the new legislation, no filing basis needs to be provided, simplifying the application process.
Introduction of Fee-per-class Filing System
Currently, a trademark owner must pay a government filing fee of C$250 for filing an application, for an application covering an unlimited number of classes. Under the new legislation, the application filing fee will increase to C$330 for one class, and trademark owners will be required to pay C$100 for each additional class of goods and services.
Elimination of Government Registration Fee
There is currently a government registration fee of C$200 that needs to be paid after allowance to obtain the registration of a trademark. This fee no longer exists for applications filed after June 17, 2019.
Adoption of Nice Classification System
Goods and services must be grouped according to an international system of classification of goods and services comprising 45 classes. Canada’s practice will be harmonized with other countries, as the Nice Classification has been adopted by most countries around the world. Despite the requirement for classification, goods and services must still also be identified in ordinary commercial terms.
No Country of Origin Restriction on Priority Claim
Under the current legislation, priority can only be claimed from a prior application filed by the applicant in its country of origin. This limitation no longer exists – an applicant located in a country of the Union can claim priority from a prior application filed in any country of the Union.
Increased Ability to Amend a Trademark
While the current legislation permits trademark owners to amend an application as long as it does not alter the distinctiveness of the mark, the new regulations provide that an amendment is permitted as long as the trademark remains substantially the same. This must be done prior to advertisement of the application.
Introduction of Distinctiveness Requirements During Examination
Under the current legislation, an applicant can evidence distinctiveness of a trademark to overcome objections based on clearly descriptiveness or that a trademark is primarily merely the name or the surname of an individual who is living or has died within the preceding thirty years.
Under the new legislation, Examiners will additionally be able to object to an application on the basis that the mark (traditional or non-traditional) is not inherently distinctive. Evidence of distinctiveness may be provided to overcome the objection.
Elimination of Use as a Prerequisite to Registration
Use has always been a requirement to obtain a trademark registration in Canada. Canada’s practice will now be in sync with most other countries, where use is not a prerequisite for obtaining a trademark registration. Registrations will, however, still be subject to cancellation on the basis of non-use of the trademark.
Reduction of Term of Protection from 15 Years to 10 Years
Currently, a trademark registration is valid for 15 years from registration and may be renewed for additional terms of 15 years. Under the new legislation, the term of registration and renewal has been reduced to 10 years.
Mandatory Grouping of Goods and Services according to the Nice Classification
Renewal will only be accepted if the goods and services have been classified under the Nice classification. The Registrar may also send a notice to existing trademark owners at any time, requiring grouping according to the Nice classification. The grouping must be completed within six months of the notice. If the grouping is not furnished, the Registrar may cancel the registration upon providing the registrant a reasonable notice to that effect.
Increase of Government Renewal Fee
Currently, a trademark owner must pay a government fee of C$350 for renewing a registration, regardless of the number of classes. Under the new legislation, the renewal fee will increase to C$400 and trademark owners will be required to pay C$125 for each additional class of goods or services covered by the registration.
Accession to the Madrid Protocol
The Madrid Protocol is an international trademark registration system. Trademark owners will be able to seek trademark protection in multiple countries (102 countries) through a single application. Canadian owners will be required to first have an application or registration in Canada before filing foreign applications under the Madrid Protocol.
Ability to Divide Applications and Registrations
The ability to divide applications and registrations is a new feature. The introduction of divisional application or registration may be useful to trademark owners who:
- Face problems during prosecution in relation to only a portion of the goods or services covered by the application;
- Face an opposition in relation to only a portion of the goods or services covered by the application;
- Wish to transfer only some goods or services associated with a trademark to another owner.
Elimination of Documentary Proof for Recordal of Transfer in Some Cases
The recordal of assignments and mergers no longer requires documentary proof, if the recordal is requested by the current applicant or registered owner of the mark. In cases where the transferee of the mark requests the recordal, documentary proof will still be required.
Under the current legislation, only certification marks that are in use at the time of filing an application can be registered. The new legislation recognizes certification marks that are proposed to be used.
The new legislation accepts the filing of an application in the name of more than one person. Only one address for correspondence may be provided.
WHAT THE CHANGES MEAN FOR EXISTING TRADEMARK APPLICATIONS AND REGISTRATIONS
For applications that have not been advertised as of June 17, 2019:
- Priority can only be claimed from a prior application filed by the applicant in its country of origin;
- Goods and services must be grouped according to the Nice Classification;
- Non-Canadian owners will no longer be required to file certified copies of their home country registrations if the “use and registration abroad” basis is claimed;
- A declaration of use is no longer required once the application is allowed;
- The government registration fee of C$200 must be paid to obtain the registration of the mark after its allowance.
For applications that have been advertised as of June 17, 2019:
- Grouping of goods and services according to the Nice Classification is not required, unless requested by the Registrar;
- A declaration of use is no longer required once the application is allowed;
- No more extensions of time required after allowance to allow use to begin;
- The government registration fee of C$200 must be paid to obtain the registration of the mark.
For trademarks that are registered as of June 17, 2019:
- The grouping of goods and services according to the Nice Classification is not required until the first renewal after June 17, 2019, unless requested by the Registrar;
- The 15 year term remains until the next renewal, after which the 10 year term will apply;
- Registrations can be renewed at any time until the later of:
- 6 months after the renewal deadline;
- If a notice is sent by the Registrar, the end of the two-month notice period;
- Renewals effected before June 17, 2019 are subject to the flat-fee charge of C$350 irrespective of the number of classes.
For renewals effected after June 17, 2019:
- Grouping of goods and services according to the Nice Classification is required for renewal;
- The renewal fee is C$400 for the first class of goods or services plus C$125 for each additional class of goods or services covered by the registration;
- The renewal may only be paid 6 months in advance of the renewal deadline or the later of:
- 6 months after the renewal deadline;
- If a notice is sent by the Registrar, the end of the two months notice.
- The government flat-fee of C$350 applies if the renewal deadline was before June 17, 2019 even if it is paid after June 17, 2019;
- If the grouping is not completed by the renewal, the fee for the first Nice class is due within the renewal period but the fee for the additional class(es) will be due two months after the Registrar sends the owner confirmation that the goods or services are properly classified.
IMPACT OF THE CHANGES
While the government’s goals of ensuring that Canadian businesses remain competitive in international markets in addition to reducing costs and complexity for all trademark owners are commendable, the reality is that the changes to the legislation will also create some hurdles.
The upcoming changes to the trademark legislation have caused and are expected to cause:
- An increased number of trademarks filed by trolls and squatters: Canada was not an attractive market before these changes because use was a prerequisite for registration. Since the announcement of these changes, hundreds of applications have been filed by trolls covering all 45 classes of goods and services, presumably for the purpose of profiteering;
- An increased number of trademark owners seeking defensive registrations or covering a much larger spectrum of goods and services than what they may put into use; and
- An increased number of filings into Canada by way of the Madrid Protocol.
As a consequence of the increased number of applications, it will be increasingly difficult to clear new trademarks without investigating a much larger number of results. The increased number of applications will likely also result in an increase in contentious proceedings such as oppositions, litigation and non-use cancellation proceedings to address problematic marks.
RECOMMENDATIONS FOR BUSINESSES AND BRAND OWNERS
Businesses invest significant time, energy, resources and money in creating their brands. It is an important part of what distinguishes them from their competitors. But, protecting these brands is no easy feat.
Being proactive about the steps you take may help you deal with the challenges that may be brought on by others trying to appropriate your rights and save you a lot of money and aggravation – do not wait until you have a problem. Take steps now to:
- Conduct a full review of your trademark strategy and portfolio in Canada and elsewhere;
- File trademark applications before June 17, 2019 to take advantage of the flat government filing fee. Trademarks that cover several classes of goods and services will benefit from significant savings;
- Expand the coverage of your existing trademark registrations to extend your monopoly by adding goods and services that are of relevance to your industry;
- Look into trademark monitoring / watch services to protect your primary brands;
- Renew trademark registrations before June 17, 2019 to take advantage of the lower flat-fee cost even if the renewal is not yet due and avoid the grouping of goods and services;
- File trademark applications to take advantage of the Madrid Protocol if protection is required in other countries.
Additional changes to the trademark legislation are contemplated by the budget implementation legislation that was published on October 29, 2018, as well as by the United States-Mexico-Canada Agreement. The timing of these changes is uncertain but it highlights once again the necessity for businesses and brand owners to be proactive to protect their most valuable assets.
Reach out now to the professionals at Aventum. We can help you navigate these changes and identify the best strategy for your situation.
For more information, contact Chantal Bertosa.