By Stephen D. Wilson | November 26, 2018
As global trade and multinational business grow, worldwide trademark protection has become extremely important. Canada is or may become a vital market for many U.S. brand owners, and vice versa.
Brand owners should be aware that the Government of Canada is in the process of implementing a major overhaul of its trademark laws and acceding to international trademark treaties with the U.S. and other countries. The new Canada Trademarks Act and Trademarks Regulations are scheduled to come into force on June 17, 2019. The new law will better align Canada law with U.S. law in some respects but diverge in other respects, and will significantly impact U.S. brand owners who own or wish to secure trademark rights in Canada.
Canada Joins Trademark Treaties with U.S. and Other Countries
In an effort to modernize its trademark laws, Canada is acceding to three international trademark treaties of which the U.S. is a member: (1) the Singapore Treaty on the Law of Trademarks (Singapore Treaty); (2) the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (Madrid Protocol); and (3) the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (Nice Agreement).
The Singapore Treaty updates the 1994 Trademark Law Treaty (TLT) and currently includes 47 member countries. In many foreign countries, a trademark registration provides the basis to enforce trademark rights. Some foreign trademark laws also impose burdensome and strict requirements to record trademark licenses. In many cases, failure to record a license may result in invalidation of a trademark registration. The Singapore Treaty reduces certain license recording formalities and penalties.
The Madrid Protocol may allow brand owners to seek trademark protection in multiple countries that are Madrid Union members by filing a single application in one language, with payment in one currency. As of October 15, 2018, the Madrid Union includes 102 members and covers 118 countries, representing more than 80% of world trade.
A requirement for accession to the Singapore Treaty and the Madrid Agreement is use of the Nice Classification system for classifying goods and services, which the Nice Agreement governs. The Nice Agreement categorizes the entire universe of goods and services into 45 International Classes (34 Classes for goods and 11 Classes for services), for the purpose of registering trademarks. The Nice Agreement harmonizes the International Classes across all member countries, which facilitates searching and comparing marks.
Important Changes To Canada Trademark Law Affecting U.S. Brand Owners
Some important changes to Canada trademark law under the new Trademarks Act will include:
- Shortening trademark registration and renewal term from 15 years to 10 years
- Requiring designation of International Classes for goods and services
- Requiring separate application and renewal fees per International Class
- Removing registration fee
- Removing requirement for applications to identify date of first use in Canada or details of use and registration of corresponding foreign marks
- Removing requirement to file declaration of use as prerequisite to registration for applications based on proposed use (this will also apply to pending applications)
- Adding distinctiveness as examination ground, which may require proof of “acquired distinctiveness” to register marks that CIPO does not view to be inherently distinctive
- Broadening scope of non-traditional marks eligible for trademark registration (e.g., to allow registration of scents, holograms, and animated images)
- Allowing division of trademark applications
- Allowing designation of Canada for trademark protection in application or international registration under Madrid Protocol
- Allowing third party correspondence with CIPO, such as letters of protest
The new law will present a mix of potential pros and cons for U.S. brand owners. For example, removal of the requirement to prove “use” of a trademark before registration may increase the risk that competitors, “squatters,” or “trolls” will file blocking trademark applications in Canada or claim infringement against U.S. brand owners who advertise or offer goods or services to consumers in Canada. On the other hand, the new law may make it easier for U.S. brand owners to register marks in Canada without having to prove use before registration. Trademark use will remain an important cornerstone of Canadian law, however. Three years after registration, third parties may request that CIPO cancel or “expunge” a Canada trademark registration in whole or in part based on non-use of the registered mark. In any event, U.S. brand owners should act promptly to avoid losing the race to file in Canada.
The new Canada Trademarks Act and Regulations will significantly affect the options and strategies available to U.S. brand owners who currently or may in the future: (1) do business in Canada; (2) ship products to Canada; (3) advertise products or services to Canadian consumers and businesses; (4) own or wish to secure trademark rights in Canada; (5) own Canada trademark applications; (6) own or wish to apply for Canada trademark registrations or international registrations under the Madrid Protocol; (7) license or assign trademark rights in Canada; (8) own, offer, or acquire franchises in Canada; (9) enforce trademark rights against infringers in Canada; or (10) wish to cancel Canada trademark registrations owned by competitors, infringers, squatters, or trolls. Brand owners should consult with U.S. trademark counsel experienced in international trademark protection before the new Canada statute and regulations go into effect, and once the changes become effective.
These comments are of a general nature and not intended to provide legal advice, as regulations may change and specific situations will differ and should be discussed with a trademark lawyer.
The Beggs & Lane Intellectual Property Group assists clients with U.S. and international trademark protection and other global intellectual property (IP) matters.