Proposed changes to Section 45 practice may prove controversial

Canada
The Canadian Intellectual Property Office (CIPO) has proposed changes to the practice to be followed in proceedings under Section 45 of the Trademarks Act with a view to modernizing and streamlining the current practice. 

Section 45 of the act provides a summary procedure for the cancellation of trademarks which are no longer in use in Canada. Pursuant to Section 45, any person can request that the registrar of trademarks issue a notice requiring the owner of a registered trademark to show:

  • use of the mark within the three years immediately preceding the date of the notice; or
  • special circumstances that excuse the lack of use of the mark. 
Absent use or special circumstances, the registration will be cancelled.
 
The most significant changes proposed by CIPO are set out in the following paragraphs.
 
While Section 45 requires the trademark owner to show use “with respect to each of the wares or services specified in the registration”, CIPO proposes that the requesting party may demand the issuance of a notice restricted to certain specified goods or services. This would enable the parties to focus on the goods or services which are of particular interest, and could thus be well received.
 
Section 45 also permits the registrar to decline to issue a Section 45 notice in appropriate circumstances. Under the proposed changes, the circumstances in which the registrar will not issue a Section 45 notice include cases where:
  • the registration is the subject of a pending Section 45 proceeding;
  • the registrar considers the request to be frivolous or vexatious; and
  • the request is made within three years from the date of a previous Section 45 decision in which it was held that the trademark was in use.
The latter circumstance might be viewed as being controversial, given that it could take more than three years from the issuance of a Section 45 notice before a final decision is issued, taking into account the appeal process from the registrar’s decision.
 
As with the new opposition practice, CIPO is proposing to limit the number of extensions of time that the owner can obtain for the filing of evidence. The act provides that the trademark owner has three months from the date of the notice within which to file its evidence. CIPO proposes that the owner may have one extension of time of four months. No requests for further extensions of time will generally be considered, even where the parties consent to the request on the basis of settlement discussions.
 
Under the current practice, where no evidence is filed, the registrar will immediately proceed to issue a decision cancelling the registration. Where evidence is filed, the registrar will usually ask the requesting party to confirm that it is still interested in pursuing the matter, failing which the registrar will issue a decision in conformity with the evidence. The proposed changes take this one step further and provide that the registrar may issue a decision without the benefit of written submissions from either the requesting party or the trademark owner where the evidence is clear on its face - namely, where the registrar determines that the evidence filed “clearly” establishes use or “clearly” fails to show use. No guidance is given as to how the registrar proposes to implement this provision. It is difficult to see how the registrar will differentiate between those cases in which submissions from the parties will be heard and those in which submissions will not be heard.
 
Finally, the current practice includes a provision under which “the registrar may terminate the proceedings upon receipt of a request to cancel the Section 45 proceedings signed by or on behalf of both parties”. This provision has been dropped from the proposed new practice, which may complicate attempts to reach a settlement between the parties.
 
CIPO is currently seeking input on the proposed changes. The period for consultation ends on March 13 2009.
 
Robert A MacDonald, Gowling Lafleur Henderson LLP, Ottawa

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