Jurisdictional perspective: Canada

Major legislative reforms in Canada prompted an influx of applications from Gleissner in 2017. Smart & Biggar partner Kohji Suzuki and associate Nora Labbancz explain how this happened and what the authorities did next.

In 2014 the Canadian government passed a number of significant amendments to the Trademarks Act, including to eliminate use as a requirement to secure registration. With no opportunity to push back, brand owners voiced fears that this would open the door to trademark trolls. Their concerns proved well founded. When it became clear that the law would be brought into force in 2019, a large number of suspicious applications began to be filed in Canada. Following aggressive examination by the Canadian Intellectual Property Office (CIPO), most have now been abandoned and troll applications no longer appear to be a significant issue in the country. However, for a time, the problem was a major headache.

‘Trademark trolls’ are parties who apply to register trademarks that are already in use by brand owners or that consist of generic terms, which will likely block subsequent applications by legitimate brand owners. The ultimate goal of many of these trolls is to force brand owners whose applications have been blocked to negotiate with them.

Trolls under the new system

In 2014 the government announced that Canadian trademark law would be substantially amended, with significant changes including the introduction of class fees and the elimination of the requirement to use a trademark before it can be registered. The combination of these amendments was a golden opportunity for trademark trolls, who could file multi-class applications before the law changed without having to pay class fees and then have those applications proceed to registration after amendments came into force without needing to prove use.

Figure 1 shows that in 2015 and 2016 there was little troll activity in Canada. However, in 2017 – once the in-force date of the amendments became clearer – activity spiked with a large influx of applications to register marks consisting of generic words, given names or established brand names (eg, BLUE, UTILITY, SALMON, KELSEY and EUTM) listing all 45 classes.

Figure 1: All-class applications filed in Canada

Of those all-class applications, approximately 77% were filed in the name of the company Brandster Branding Ltd. As has become clear, Brandster Branding has strong suspected ties to Gleissner. In addition, Gleissner is suspected of being behind a large number of companies that have collectively filed hundreds of trademark applications in Canada since 2017. In fact, according to CompuMark, 96.9% of all suspicious applications listing all 45 classes filed in Canada since the beginning of 2017 were associated with Gleissner.

The highest volume of filing activity by companies linked to Gleissner was in 2017.

According to Figure 2, most of these applications were filed by Brandster Branding. However, at least 93 were filed in the name of other Gleissner-related companies (eg, Abby International Ltd, Canopy International Ltd and Chameleon International Limited) in 2017.

Figure 2: Applications filed by Gleissner-associated companies

Since then, numbers have fallen sharply. In fact, no applications were filed in 2020, suggesting that Canada may no longer be one of Gleissner’s favoured jurisdictions.

A loss of interest

One possible explanation for the dramatic decrease in the number of Gleissner filings is the introduction of per-class filing fees.

Before June 2019, the cost of filing a trademark application in Canada was C$250, regardless of the number of classes of goods and services listed. On 17 June 2019 the cost of filing a new application increased to C$330 for the first class of goods or services, with another C$100 for each additional class. As a result, the cost of filing an all-classes application rose from C$250 to C$4,730, making it significantly less attractive for Gleissner (and other suspected trolls) to file in Canada.

Another possible explanation for the downturn is that troll behaviour has been successfully targeted by CIPO’s relatively aggressive stance against suspicious applications.

Office actions have been issued against almost all applications filed by suspected trolls and a review of some reveals the citation of numerous third-party marks in confusion objections, the raising of descriptiveness objections and multiple objections to the goods and services terms used in the applications.

In some early cases, Gleissner’s companies attempted to keep applications alive in the face of extensive objections by filing simple responses with only minor amendments. However, such submissions were considered to be non-responsive and the applications were ultimately deemed abandoned.

CIPO’s approach has been very successful. Approximately 95.8% of applications filed by Gleissner-related companies have now been abandoned.

Only three Gleissner applications filed since 2017 have proceeded to registration or been approved for registration, namely:

  • Registration TMA1072808 for the mark CHAMELEON standing in the name of Chameleon International Limited and registered for goods and services in Classes 1, 4, 13, 15, 23, 24, 26, 27, 29, 31, 38, 40 and 45;
  • Application 1837306 (registration pending) for the mark COCONUT standing in the name of Coconut Holdings Limited and applied for in association with goods and services in Classes 9, 14, 16 and 41; and
  • Application 1837308 (registration pending) for the mark PLAZA standing in the name of Plaza Partners Ltd and applied for in association with goods in Classes 14 and 26.

However, these registrations list relatively few classes. Almost all of the remaining active applications linked to Gleissner are currently in default (see Table 1).

Table 1: Current status of applications filed by companies linked to Gleissner

Filing dateRegisteredRegistration pendingDefaultExaminer’s report issuedAbandoned

Unlike in other jurisdictions, there have been no trademark disputes in Canada involving applications linked to Gleissner. This is likely because very few of these have proceeded to advertisement for opposition or registration. As such, there have been minimal opportunities for opposition or expungement proceedings to be initiated.

Brand protection strategies

Gleissner and his fellow suspected trademark trolls seem to have given up on Canada for now. They are no longer filing suspicious 45-class applications and are abandoning applications when faced with extensive office actions. As such, it appears that CIPO has won the war against the trolls – at least for the time being.

While this is undoubtedly positive news for brand owners, there is no guarantee that this is the end of troll activity in Canada. Trolls may have switched up to file applications in fewer, more focused classes. Such activity could target brand owners with well-known marks in other countries that have no use or reputation in Canada, as trolls can register such marks in Canada in core classes without having to prove use.

It is therefore vital that brand owners remain vigilant when it comes to protecting their trademark rights in Canada. If a problematic troll application is discovered, a useful strategy may be to file a notification of third-party rights – a mechanism that allows brand owners to bring their prior trademark rights to the attention of CIPO. This can be filed against an application at any time before registration. However, to maximise its impact, the notification should be filed before the application is initially examined.

Since this mechanism has only been available in Canada since June 2019, it is not clear whether it is influential or effective. Nevertheless, pursuing this strategy would provide brand owners with the comfort of knowing that their rights have been expressly brought to the attention of the Trademarks Office.

If a troll application is cited during prosecution, one strategy is to simply wait and see whether the application will be abandoned. If so, it will no longer pose an obstacle to registration. CIPO appears to be sympathetic to brand owners facing troll applications and has been granting them generous extensions of time to respond to office actions where it appears that a cited troll application may be abandoned.

For any troll applications that have proceeded to advertisement or registration, brand owners may be able to take advantage of recent amendments to the Trademarks Act, which now explicitly establishes bad faith as a ground of opposition and expungement.

Finally, any true troll registration should be vulnerable to expungement on the basis of non-use pursuant to Section 45 of the act three years after registration.

Concerns over increased troll activity as a result of the amendments to the Trademarks Act were justified in 2017 with a sharp uptick in the number of suspicious applications filed. However, thanks to the efforts of CIPO and the new per-class filing fees, trademark trolls no longer appear to be a significant issue in Canada. Nevertheless, brand owners should remain vigilant and should not overlook the country in their global brand protection strategy as there is no guarantee that the trolls will not return.

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