Written by Melissa M. Dimilta and L.E. Trent Horne
The Federal Government recently introduced Bill C-31, the Economic Action Plan Act 2014, No.1. Bill C-31 is an omnibus bill which makes changes to nearly 40 different pieces of legislation. Among these amendments are changes to the Trade-marks Act that will have a significant impact on trademark owners.
The stated intention behind the amendments to the Trade-marks Act in Bill C-31 is to ensure that Canada meets its international trademark obligations outlined in three treaties: the Singapore Treaty on the Law of Trade-marks, the Nice Agreement, and the Madrid Protocol (which were tabled by the Federal Government in January 2014). These international treaties stipulate trademark registration requirements for all member states and allow Canadians access to an international trademark registration scheme. The changes to the Trade-marks Act are extensive and exceed the scope of these international treaties.
The three changes to the Trade-marks Act which will have the greatest impact on trademark owners are:
Changes to Use Requirements
Canada is presently a use-based jurisdiction, such that a trademark registration can only be acquired if the applicant states that it has used the mark in Canada, or has both used and registered the mark abroad. The amendments to the Trade-marks Act fundamentally alter this use requirement.
Bill C-31 provides that applicants will no longer be required to state that the mark has been, or is intended to be, used in Canada when the application is filed. Further, there will no longer be a requirement to file a declaration that the mark has been used in Canada as a condition precedent to registration. If the amendments proposed in Bill C-31 are implemented, an applicant will be entitled to a Canadian trademark registration without ever stating that it intends to use, or has used, the mark in Canada.
The proposed amendments will simplify and expedite the registration process, and appear to have been drafted with these objectives as the primary goal. However, removing the use requirement will allow applicants with little or no legitimate interest in a trademark to obtain enforceable rights, to the detriment of those that have used, or have a genuine intention to use, the same mark in commerce.
Trademark owners have been given new tools to enforce their rights. Bill C-31 provides for two new grounds for opposition: i) as of the filing date the applicant was not using or did not intend to use the trademark; and ii) as of the filing date the applicant was not entitled to use the trademark. By offsetting the simplified registration process with expanded grounds of opposition, the proposed amendments to the Trade-marks Act look to shift the responsibility of ensuring that trademarks have been used before the date of registration from the Registrar of Trade-marks to trademark owners. Inevitably, this will result in increased costs to trademark owners who will need to police the market and incur the costs of opposition and expungement proceedings.
Currently, Canada is one of the few countries where the products and services in a trademark application are not set out in the classes defined in the Nice Classification. Instead, applicants individually list a range of products and/or services. Presently, there is a single filing fee regardless of the number of products and services included in the application. The proposed amendments to the Trade-marks Act provide that the current practice of describing the goods and services in ordinary commercial terms will be maintained. However, applicants will also be required to classify the products and services according to the Nice Classification.
Whether filing fees will increase as a result of the use of the Nice Classification scheme remains to be seen; this will be addressed by way of changes to the Regulations, which is not part of Bill C-31. There will certainly be a learning curve for examiners when the Nice Classification is implemented, which has the potential for increased office actions and delays. This increased expense will not be limited to applications. The amendments provide the Registrar with the ability to request that the owner of a trademark registration group the goods or services according to the Nice Classification with the threat of expungement if the trademark owner does not respond.
If there is a dispute over the appropriate Nice Classification, the Registrar's decision is final. Bill C-31 specifically provides that any question arising as to the class which any goods or services are to be grouped shall be determined by the Registrar, whose determination is not subject to appeal.
Term of Registration
The amendments to the Trade-marks Act will alter the term of registration of a trademark from 15 years to 10 years. Renewal fees will therefore be incurred every 10 years.
Bill C-31 went to committee on April 8, 2014. Professional associations have communicated objections, and have asked that the proposed amendments to the Trade-marks Act be made the subject of a separate bill which can receive detailed consideration and input from interested parties. If history is any indication, it is unlikely that these submissions will be favourably received. As noted by Aaron Wherry in “The Omnibus Question” in Macleans magazine, “not a single budget bill since 2011 has been amended by a committee studying it: 2,000 pages of legislation passed by the House without a single change”.