The Trade-marks Acts Gets a Makeover - 5 Things You Need to Know

The biggest changes in fifty years to the Trade-marks Act have passed into law.  On June 19th, amendments to the Trade-marks Act were ratified in an omnibus bill.  There was no consultation undertaken by the government on the changes.  It is largely believed that the changes were implemented to more closely align Canada’s trade-mark system with that of the U.S., Europe, and Japan.

The amended Act will come into force once the regulations are drafted and approved, which many believe will be in the middle of 2015.

Here are five (5) changes to the Trade-marks Act you need to know about.

1. Trademark Applications can be registered before Use

The basis of our trade-mark law in Canada has been that the person who used the trademark first will usually have superior rights to that trademark.  The European system is based much more on the principle that the first to file for protection of a trademark should have superior rights.

For the first time, the amendments permit an applicant for a trademark, who has never used the trademark, to register it.  This is a fundamental shift in our law.  It also has the potential to increase trademark oppositions, litigation, and trademarks on the register that the applicants never intended to use, that is, these applicants have merely registered the trademark as a placeholder hoping to profit on its sale to someone else.  (This practice still occurs in the field of domain name registrations.)  Because a trademark can be filed without stating whether they were ever used, interested parties may be forced to begin opposition proceedings to discover whether the trademark has superior rights to theirs.

In this environment, trademark applicants and registrants should carefully consider whether to employ a watching service to make them aware of the filing of any trademark applications that could be confusing with their important marks.

2. Trademark Applications Need Not Identify Filing Grounds

A trademark application may be filed without identifying any grounds for the filing.  Although this may speed up the application process for the applicant and the examination time for the Trademarks Office, it does little to communicate to other interested parties important information about the trademark.

For example, currently, where a party performs a trademark pre-filing search and discovers that an application has already been filed for an identical trademark, that party may make a decision about whether to oppose that application or choose another trademark on the basis of the date of first use specified in the application.  If that date were not included, the applicant would either have to make a choice about whether to file its application on incomplete information or it may oppose the other application in order to find out when it was used in order to determine who has superior rights.

3. Adoption of the NICE Classification System

The description of wares and services in a trademark application is a critical part in drafting a proper application.  The amendments have added a further step.

Applicants will now be required to classify their wares and services according to the NICE Classification system.  NICE was established in 1957 by countries who worked to harmonize across countries and languages how goods and services are described in trademark registrations.  Along with describing the goods and services in the trademark application in accordance with ordinary commercial terms, applicants will also have to consult the NICE classifications, identify them, and group the goods and services in the application together on the basis of NICE.

Applications and registrations filed before the amendments come into force may be required by the Trademarks Office to regroup and classify the goods and services listed in their applications or registrations.  Failure to classify the goods and services at the request of the Trademarks Office could lead to the application or registration being expunged or not renewed.

4. Convention Priority Claims can be based on any Original Filing

Under the present Act, in order for the application date of a Canadian trademark to be deemed the application date of an earlier filed identical trademark, such earlier filed trademark had to have been filed in the country where the applicant resides.  That often lead to a complex legal determination about where the applicant resided when the applicant was an amalgam of multiple companies and corporations in different jurisdictions.

The amendments will permit a later filed Canadian application to be based on any earlier filed original application, so long as the applicant resides in a country that is a party to the Union of Paris, 1883.

5. Length of Protection Shortened

Trademark registrations are valid for 15 years from the date of registration.  After the amendments come into force, that period of protection will decrease to 10 years.

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There are many projections about how the amendments to the Trade-marks Act will affect the protection and policing of trademark rights in Canada.  At this time, there are more questions than answers.  Once the regulations are finalized, the impacts may be clearer.  My take on it is that we will need at least a few years to assess fully how these changes have affected trademark law in Canada.