Amendments to Trademarks Act and regulations - implementation in late 2016 or 2017?
Two bills containing amendments to Canada’s Trademarks Act were passed in 2014, bringing a new Customs Assistance plan, a broadened definition of 'infringement' and added criminal sanctions for infringement. However, most amendments, including those that eliminate use as a registration requirement, have not yet been implemented. An initial consultation on regulations took place in late 2014, but there has been no response since then from the government to the many comments made in the regulatory discussion document, including a request from many Canadian and international trademark owners and groups to reconsider the elimination of 'use' from the filing, registration or renewal steps. The government has also introduced changes to the Patent Act and the Industrial Design Act, setting an ambitious plan for overhaul of many aspects of IP law in Canada.
Trademark owners and practitioners are obviously wondering when the amendments will be implemented. On March 30 2015 an amended notice was posted on the website of the Canadian Intellectual Property Office that notes that “interested stakeholders will also have the opportunity to comment when the proposed amendments/regulations are pre-published in Canada Gazette, Part 1 (expected late 2016)”. By law, the comment period following publication in the Canada Gazette is two months, so reading between the lines, it is likely that the amendments cannot be implemented until sometime in 2017.
The notice does not make mention of any consultation on fees, including possible new fees per class and fees related to Madrid Protocol filings by Canadians and others. It was previously indicated that a fee consultation would take place in the spring of 2015.
A number of comments are made in the notice:
- “The bulk of the proposed amendments are required to enable Canada to accede to the Singapore Treaty on the Law of Trademarks, the Protocol relating to the Madrid Agreement concerning the International Registration of Marks and the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks.”
Accession to the Singapore Treaty (designed to limit trademark filing and registration formalities) and the Madrid Protocol (an international filing programme designed to facilitate international expansion of trademark rights) should ultimately benefit trademark owners in Canada. The most contentious amendment, the elimination of 'use' as a requirement for registration, is not 'required' by the treaties. In fact, Canada’s biggest trading partner, the United States, continues to require 'use' before registration by all American applicants, and also requires a bona fide intent to use for all applicants who file without prior use in the United States, including those applicants filing through the Madrid Protocol. Such requirements make applicants focus on actual goods in use or intended to be used, and help to prevent the trademark register from becoming crowded or cluttered by marks, goods and services for which there is no use or no likelihood of use in the near future.
- “These treaties will harmonise Canada’s trademark protection regime with international norms and will reduce cost, complexity and red tape for Canadian applicants seeking trademark protection in more than one country.”
It is important to remember that international registration procedures and use laws continue to differ, despite the various treaties, and that the Madrid Protocol offers only simplified filing steps. The main advantage for Canadian businesses should be easier and less expensive filing costs for international trademark filings. A more likely impact will be more applications from non-Canadians, adding considerably to the examination burden of the Trademarks Office, the number of oppositions and cancellation proceedings, and a growing Trademarks Register.
- “Other proposed amendments aim to further modernise Canada’s trademark regime and facilitate the overall implementation of the treaties. These include proposed changes to the regulations governing trademark opposition and creating new regulations for summary cancellation proceedings.”
As noted above, with amendments to the Trademarks Act that bring Canada’s system more into alignment with that of Europe, it is expected that the number of oppositions, usually a very time-consuming and expensive step, will increase. A government spokesperson estimated the amendments could result in a jump in the rate of applications being opposed from less than 2% to 7-8%. Opposition rates in Europe are much higher (over 15%). Currently, oppositions regularly take more than four years from start to finish, about a year of which is spent either waiting for a hearing or a decision. Such delays are likely to encourage parties to seek other venues, such as the Federal Court, with speedier resolution (eg, expedited trials and summary judgments) to resolve important trademark disputes.
- “Opposition proceedings occur when someone objects to the registration of a trademark in Canada. Summary cancellation proceedings ensure that only trademarks that are actually being used in the Canadian marketplace enjoy the benefits of registration.”
The amendments will actually permit owners of marks not in use, anywhere, to enjoy the full benefits of registration. Only if a third party invests in the time and expense of an opposition before registration, or summary non-use cancellation three years after registration, will a registrant be required to show use of its mark in Canada. Furthermore, any registration that is at risk of a non-use challenge can be refiled, and registered again, unless there is an intervening right, leading to the potential for 'rolling' registrations to obtain perpetual rights without clear evidence of use in Canada.
- “The proposed amendments will help shorten the duration of the proceedings and streamline the overall process. The changes will increase market certainty for everyone while parties will benefit by seeing a faster resolution of their dispute brought before the Trademark Opposition Board.”
Various stakeholders have suggested that the elimination of filing grounds, used to assess relative rights with other trademarks owners, may make clearance of new marks more costly, use more risky, and decisions to oppose more difficult. One likely result is that more oppositions may be commenced while parties work out their respective rights.
- “Indication of business impacts: there may be business impacts. The 'one-for-one' rule and/or the 'small business lens' may apply.”
The government has several policy initiatives designed to reduce government red tape and improve the competitive advantage for Canadian businesses. The 'one-for-one' rule provides that, for any new regulatory requirement, an existing regulation must be removed. The 'small business lens' requires regulators to assess small business needs when designing regulations. It is clear to users of the current Canadian trademark system that the amendments will impact all businesses, including small and medium business. One immediate issue posed by the amendments relates to fees. Canadian Government fees relating to trademarks are currently among the least expensive of the G8 nations - $250 for filing, $200 for registration fees and $350 for renewal (all Canadian dollars), regardless of the number of classes of goods and services. It will be a challenge for the government to keep costs relatively constant for Canadian users. In addition, the implementation of the Madrid Protocol will require an entirely new regulatory scheme (since the intent is to implement it by regulation, as opposed to by legislative change), and it is clear that Madrid filers will have to adapt to a totally online filing and correspondence system, which is not how the Trademarks Office currently operates.
Stay tuned for more announcements on regulations, fees and implementation dates. However, for now, except for the measures designed to address counterfeiting that are now in place, it appears quite unlikely that trademark owners will see further implementation of the amendments until early 2017.
Cynthia Rowden, Bereskin & Parr LLP, Toronto
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