Trademark procedures and strategies: Canada
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Major amendments to the Trademarks Act were passed in 2014, partially to facilitate implementation of the Nice Agreement, the Singapore Treaty and the Madrid Protocol. Most notable among these amendments is the elimination of use as a registration requirement. The amendments received royal assent, but have not yet been implemented. The latest projections suggest that implementation could take place in 2019.
Legal framework
National law
Major amendments to the Trademarks Act were passed in 2014, partially to facilitate implementation of the Nice Agreement, the Singapore Treaty and the Madrid Protocol. Most notable among these amendments is the elimination of use as a registration requirement. The amendments received royal assent, but have not yet been implemented. The latest projections suggest that implementation could take place in 2019.
To address concerns regarding adequate remedies to deter counterfeiting in Canada, the Combating Counterfeit Products Act was enacted in January 2015. It provides for new border detention provisions (by a written request for assistance submitted to the Canada Border Services Agency), additional criminal penalties for counterfeiting and a broadened definition of ‘trademark infringement’. Full details on detentions under the new provisions are not public, but counterfeits of several major brands, particularly in the fashion industry, have been detained.
New provisions passed in 2016 now ensure that trademark agents have privilege for communications relating to trademark protection.
Provincial laws
Canadian provinces generally have legislation regarding corporate names and trade names. The province of Quebec has specific legislation requiring use of the French language in business, including French trademarks, unless marks qualify as ‘recognised marks’ under the Charter of the French Language. The regulations enacted under the charter, that came into force on November 24 2016, also mandate the use of French in generic business descriptions on all signage.
International treaties
Canada is already signatory to the Paris Convention for the Protection of Intellectual Property. Implementation of the amendments to the Trademarks Act will be followed by implementation of other treaties, including the Nice Agreement and the Madrid Protocol.
Legislation to implement Canada’s obligations under the World Trade Organisation Agreement on Trade-Related Aspects of Intellectual Property Rights came into force on January 1 1996. Among other things, this introduced a comprehensive set of procedures for the protection of geographical indications for wines and spirits.
Canada has also signed the Comprehensive Economic and Trade Agreement with the European Union, and is involved in negotiations relating to the Trans-Pacific Partnership Agreement. The former will require further amendments to the Trademarks Act to add new protected geographical indications and most likely to include specific protection for ‘famous marks’.
Unregistered trademarks
Registered and unregistered trademarks – including logos, shapes and some non-traditional trademarks and trade names – can be protected in Canada. The owner of an unregistered trademark or trade name may assert its rights over others (claiming passing-off action), and may rely on those rights to prevent registration of confusingly similar trademarks. However, enforcement of unregistered rights depends on proof of reputation and such rights will normally be protected only in a geographic area where such reputation exists.
Registered trademarks
Formal requirements
Any person – including trade unions, businesses and government administrative authorities, and their agents – may apply for trademark registration. Goods and services must be described in “ordinary commercial terms”. While Nice classification is not yet formally used, the Trademarks Office encourages the inclusion of Nice classes in applications, in anticipation of upcoming amendments that will mandate classification for all applications and registrations. Currently, applicants must identify at least one specific filing ground (use in Canada, proposed use in Canada, use and application/registration abroad or “making known” in Canada). In addition, the mark must be used somewhere before a registration will issue. Applicants relying on proposed use must submit a declaration attesting to use of the mark in Canada with some or all of the goods or services in the application before registration, and registration will cover only goods or services in use.
Once the Trademarks Act amendments are implemented, use will no longer be a prerequisite for registration. Any applicant that has used or intends to use its mark in Canada and is entitled to register it may apply for registration. If unopposed, the application will issue to registration for all filed goods or services, without the need to file a declaration of use.
Scope of protection
The Trademarks Act prohibits registration of marks that cannot function as a trademark, unless the applicant can show that the mark has acquired distinctiveness in Canada as of the application filing date. These include:
- marks that are primarily or merely names or surnames;
- words that are clearly descriptive or misleadingly descriptive of the goods or services, their origin or the persons that created them; and
- three-dimensional (3D) shapes.
Also, if such a mark has already been registered in the applicant’s country of origin and is not without distinctive character in Canada, it may be registrable. This exception will be dropped once the Trademarks Act amendments are implemented.
The planned amendments will permit registration of a broader range of marks, such as tastes, textures and smells. However, examiners will also be given the power to object to such applications for lack of distinctiveness and it is anticipated that it will become more difficult for such marks, and others with a low degree of inherent distinctiveness, to be approved without evidence of acquired distinctiveness in Canada.
Famous marks
Canada has no statutory definition of a ‘famous mark’ and provides no specific remedies for dilution of well-known marks. Fame or reputation may affect enforcement or opposition results, since the test for confusion includes analysing the extent to which a mark is known. However, the Canadian courts have stated that fame is not a trump card and – following Supreme Court of Canada decisions such as Mattel Inc v 3894207 Canada Inc (2006 SCC 22) and Veuve Clicquot Ponsardin v Boutiques Cliquot (2006 SCC 23) – have been reluctant to expand the scope of protection to goods or services significantly different from those for which the marks are known or registered.
Prohibited marks
Section 9 of the Trademarks Act grants special protection to certain types of mark, including marks suggesting governmental patronage. ‘Official marks’, adopted and used by public authorities under significant government control in Canada, and university marks are also protected if such marks are given public notice by being included in the Trademark Journal published by the Trademarks Office. In each case, the act prohibits the adoption of any name consisting of or nearly resembling an official mark or university mark in connection with a business, as a trademark or otherwise, or registration of such mark, without the consent of the owner of such official or university mark.
Procedures
Searching
Searches of the register, as well as common law rights, are advisable before use and filing. While the Canadian Intellectual Property Office (CIPO) does not provide searches, the register is searchable online at www.cipo.ic.gc.ca/eic/site/cip....
Currently, all marks on the register list details of filing grounds and/or dates of filed declarations of use. The amendments to the Trademarks Act will make it unnecessary to include use information, with the result that the register will be less useful for searching. Additional marketplace and other searches to determine the scope and duration of actual use will likely become more important for potential applicants.
Examination
Applications may be filed online or in hard copy and will be examined on both absolute and relative grounds. The Trademarks Office will cite as confusing only registered trademarks or previously filed applications. Under the amended act, examiners will also be entitled to object on distinctiveness grounds. Applicants have the opportunity to respond to such objections and, if appropriate, to amend the application or submit evidence of distinctiveness in response to certain objections. If all objections are overcome, the application is approved for opposition. The time from filing to approval generally takes at least eight to 12 months, unless substantive objections are raised.
CIPO adheres to strict timelines within which to respond to examiners’ reports and limits extensions, unless exceptional circumstances exist.
Opposition
Following approval, applications are advertised for opposition in the Trademarks Journal. An application may be opposed by any party within two months on any of four possible grounds of opposition:
- non-compliance with Section 30 of the Trademarks Act (technical deficiencies in the application);
- non-registrability under Section 12(1);
- non-entitlement, referring to prior use or to a confusingly similar trademark (registered or unregistered), trade name or previously filed trademark application; and
- non-distinctiveness.
Distinctiveness may refer to confusion or other issues, such as common or generic use.
If the registrar finds that the statement of opposition raises at least one valid ground, a copy is forwarded to the applicant, which must file a counterstatement, failing which the application will be deemed abandoned. Each party may file evidence to support its position, cross-examine any affidavits of the other side, file written arguments and attend an oral hearing.
The Opposition Board’s decision may be appealed (with new evidence permitted) to the Federal Court, the Federal Court of Appeal and, in limited instances, the Supreme Court.
Confusion
The test for confusion is whether, as a matter of first impression in the mind of the average consumer with imperfect recollection, the use of both marks in the same area and in the same manner is likely to lead to an inference that the respective goods or services are produced by the same company.
Consideration is given to all of the circumstances, including:
- the inherent distinctiveness of the trademarks or trade names and the extent to which they have become known;
- similarities in the goods, services and channels of trade; and
- the degree of resemblance between the trademarks or trade names in appearance or sound or in the ideas suggested by them.
In Masterpiece Inc v Alavida Lifestyles Inc (2011 SCC 27) the Supreme Court confirmed that when assessing confusion in oppositions:
- the location of prior use is irrelevant, since confusion is assessed based on possible coexisting locations;
- resemblance should be considered on a mark-by-mark basis – even one confusingly similar mark may invalidate or prevent registration;
- the mark as applied for should be considered (as opposed to the mark used);
- resemblance should focus on the most striking or unique elements of a mark;
- visual resemblance will often have the greatest effect on confusion; and
- while the cost of the goods or services is not irrelevant, it is not determinative.
Registration
Currently, if there is no opposition or if an opposition is decided in the applicant’s favour, the application will be allowed and will issue once a registration fee is paid and, if the application was based on proposed use in Canada, confirmation is given that use in Canada has commenced. Registration will be granted only for goods and services declared to be in use. Filing a false or inaccurate declaration may be grounds for invalidating all or part of the registration.
Once the amendments are implemented, registration fees will not be required and an application will automatically issue to registration once the opposition period expires or, if opposed, on rejection of the opposition.
Registration of a trademark constitutes prima facie evidence of ownership and gives the owner the exclusive right across Canada to use the mark in association with the goods or services for which it is registered. Currently, registrations are valid for 15-year terms (which will be reduced to 10 years on implementation of the amendments). Evidence of use is not required to renew a trademark registration in Canada.
Removal from register
Following the third anniversary of a registration, it becomes vulnerable to challenge for non-use in Canada pursuant to Section 45 of the Trademarks Act. This is a summary procedure determined by the registrar. Any person may request the registrar to send a notice to a registrant requiring evidence of use, in the form of an affidavit or statutory declaration. There is no cross-examination. Each party is entitled to file submissions and attend a hearing. The registrar’s decision may be appealed to the Federal Court, with new evidence permissible on appeal.
In addition, the Federal Court has exclusive jurisdiction to expunge or amend a registration on the grounds of invalidity set out in Section 18. These include the following:
- The mark was not registrable at the date of registration;
- The mark is not distinctive (determined at the date of the expungement proceedings);
- The mark has been abandoned; or
- The applicant was not entitled to secure the registration, based on prior use of a confusing trademark or trade name (subject to Section 17, which stipulates that such challenge may be made only by that person or a successor and cannot be brought more than five years after registration). Once implemented, the amendments to the Trademarks Act will add a challenge whereby marks that are found to unreasonably limit the development of any art or industry can be expunged.
The Federal Court may also expunge or amend a registration based on a misstatement of filing grounds in an application. Specifically, misstatements that are intentional and fraudulent or innocent but fundamental to the registration – in the sense that the registration could not have been secured without the representation – may render a registration void ab initio.
Enforcement
A rights holder may take action for improper use of its trademark based on infringement, passing off or depreciation of goodwill. Owners of registered marks can bring an infringement action (Section 19 or 20), usually combined with an action for depreciation of goodwill (Section 22), as well as an action for passing off. Owners of unregistered marks may bring only an action for passing off and are likely to succeed only in the geographical area in which the mark has an established reputation. Success in a passing-off action depends on proof of actual or likely damage.
Since January 1 2015, owners of registered trademarks have also been entitled to record their marks with the Canada Border Services Agency, as part of the new request for assistance programme. Under this programme, customs officials are entitled to temporarily seize suspect goods when they are imported into Canada, to allow the rights holder to confirm whether the goods are counterfeit and, if so, commence civil proceedings for infringement.
Demand letter
A cease and desist letter may be sufficient to stop the other party’s undesirable conduct.
Court action
Action can be commenced by application to the court or by pleadings, and a plaintiff may request a summary trial, summary judgment or an interim injunction pending trial. However, summary or interim orders are rarely granted. Both the Federal Court and provincial courts have jurisdiction over infringement and passing-off actions, but only the Federal Court may expunge a registration. Any lower-court decision may be appealed. A rights holder may also apply to a court for an order for interim custody (pending determination of the status of the allegedly infringing goods) or, in limited cases, an order preventing the import of infringing goods. The plaintiff may be requested to give an undertaking as to damages in these situations.
Successful court proceedings may result in an injunction, damages and an award of costs and an order for the destruction, export or other disposition of any offending goods, packages, labels or advertising material. The plaintiff must choose either damages or profits. Statutory damages for trademark infringement are not possible. Generally, the winning party is entitled to some portion of its legal fees and disbursements.
The cost, length of the proceedings and enforceability of a judgment must all be considered before choosing court action. Punitive damages are available in the case of trademark infringement where the defendant’s conduct is so “malicious, oppressive and high-handed that it offends the court’s decency”.
Ownership changes and rights transfers
Trademarks, whether registered or unregistered (including pending trademark applications), are transferable.
Registered trademarks
A registered trademark or pending application is transferable either in connection with or separately from the goodwill of the business with which it is associated. However, where the transfer of a mark results in multiple owners, the mark may lose its distinctiveness.
While a trademark assignment need not be recorded with CIPO, recordal ensures that the assignment is recognised as valid and enforceable against third parties and that pertinent documents are directed to the proper owner. A photocopy of the assignment document and payment of the necessary government fees (currently C$100 per mark) are required.
A change of name and address can be recorded without any supporting documentation. Changes arising from mergers require a photocopy of the merger document to be filed. There are no government fees for recording changes of name, mergers or changes of address.
The registrar will also accept a security agreement for recordal on the register free of charge.
Unregistered trademarks
There are no provisions in the act for recordal of an assignment of an unregistered trademark or trade name, and such assignments are therefore not recorded at CIPO. Both registered and unregistered marks may be licensed in Canada, pursuant to Section 50. Licences need not be in writing, although a written record – plus evidence of actual control over use by the licensor – is advisable. Licences are not usually recorded with CIPO.
Related rights
Some overlap is possible between trademarks, copyrights and industrial designs where the subject matter involves logos, designs or shape marks.
The Supreme Court has disapproved of the concept of ‘evergreening’ the monopoly conferred by other IP rights, particularly patents, through the use of trademark registrations for shapes. However, the Trademarks Act does not expressly prevent this.
Online issues
A domain name may be registered as a trademark, provided that it functions as such.
The Canadian Internet Registration Authority (CIRA) administers registrations for country-code top-level ‘.ca’ domain names and restricts registrants through its Canadian presence requirements to certain qualifying parties, including those holding a Canadian trademark registration that corresponds to the domain name at issue.
Eligible parties may lodge complaints seeking the transfer of domain names that have been registered in bad faith through the CIRA Domain Name Dispute Resolution Policy. Panels require complainants to demonstrate prior rights in the mark, and the registrant’s bad faith and lack of legitimate interest in the domain name, before they will order a transfer.
With regard to keyword advertising, Canadian courts have held that use of a competitor’s mark is allowable as long as there is no misrepresentation. Similarly, use of a registered mark in a website metatag has also been found not to be infringing or depreciate goodwill, as such tags are not visible to the public and do not create a deception.
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