Overview: Amendments to the Canadian Trademarks Act

Amendments to the Canadian Trademarks Act

Introduction To Intellectual Property

Since the beginning of history, the commercial exchange has been an important sphere of concern for every organized society. Nowadays, the international community is undergoing a surge in international trade relations, manifested in the adoption of several international trade treaties and the creation of the International Chamber of Commerce (CIC). This phenomenon can be explained by two main reasons: globalization and improvement of communication technologies. Trade has become a complex area in the heart of every state's concerns. Now, more than ever, it is important to find effective techniques to ensure a growing economic market and the fluidity of global resources.

Therefore, intellectual property rights play a fundamental and vital role in the life of business by regulating the freedom of competition. Moreover, the intellectual property rights grant private rights to the business owner’s that will ensure healthy economic competition between the various commercial actors. In Canada, intellectual property rights are found in three different legislative regimes: the Trademarks Act (‘the Act’), Copyright Act, Patent Act, Integrated Circuit Topography Act and Industrial Design Act. In the following section, we will make a brief overview of the Trademark Act, and then, we will discuss the recent amendments that have affected this law.

I. Validity And History Of The Trademarks Act

Canada is organised in a federal structure, which means there is one federal government, seven provincial governments, and three territories government. The Constitution (s. 91-92) imparts different power to each of the governments. If an act is adopted in violation of this power division, this act will be invalidated by the court.  The Trademark Act has been adopted by the federal government. It is a valid exercise of Parliament’s general trade and commerce power under Section 91(2) of the Constitution Act, 1867 (Kirkbi AG c Gestions Ritvik Inc., [2005] 3 RCS 302). In 1868, the federal government adopted, for the first time, the Trademarks and Patent Act, this law was replaced in 1932 by the Unfair Competition Act. Then came the ‘Report of Trade Mark Law Revision Committee to the Secretary of State of Canada’ of January 20^th, 1953. This report gave birth to the actual Trade-Marks Act, which came into force on July 1 1954. Since then, many amendments have affected this law in order to ensure a modernized and effective law that suits the contemporary reality of commerce.

II. Guiding Principles Of The Trademarks Act

First, it is vital to understand why investors put a lot of time and money in order to develop the right symbol that will become the ambassador of the product made by their company. This symbol or trademark is an important tool to assist consumers and businesses because it serves as an indication of provenance. In other words, the trademark will allow consumers to know when they purchase a product, who stands behind it. In this way, trademarks provide a “shortcut to get consumers to where they want to go” (Mattel Inc. v 3894207 Canada Inc., 2006 SCC 22, [2006] 1 S.C.R. 772)

One of the most important aspects to notice about the Canadian statute is that it protects both local trademarks, the registered one, and the unregistered one. In fact, the Trade-Mark Act is more than a simple system of registration; it has been created to “regulate the adoption, use, transfer, and enforcement of rights in respect of all trade-marks”. If trademarks are intended to protect the goodwill or reputation associated with a business and to prevent confusion in the marketplace, then it is perfectly logical that the unregistered trademarks are also covered by the protection of this Act.

However, when a mark is registered, it grants the holder more effective and extensive rights against third parties. It also grants exclusive rights to the use of a distinctive designation or guise throughout Canada, and a right of action to remedy any violation of that right (ss. 19-20 of the Act). Also, in order to exercise that right of legal action, the existence of the mark itself does not have to be established, registration is evidence enough.

Furthermore, the Canadian Trademarks Act creates a legislative regime of protection against misleading marketing or “passing off” action, under Section 7(c) of the Act. The passing-off action is established in order to ensure first, that buyers know what they are purchasing and from whom they are buying, second, for the protection of the interests of traders in their names and reputation. According to the case law, three components are necessary to prove: ‘the existence of goodwill, public deception due to misrepresentation and actual or potential damage to the plaintiff’.

III. Important Amendments To The Canadian Trademarks Act

In the past year, the liberal government of Canada has shown serious ambitions about modernizing and innovating its intellectual property legislation. The main objective was to adapt Canadian legislation to international conventions.  As a matter of fact, on the 17^th day of June 2019, sweeping changes to the Canadian Trad-Marks Act came into force. We will now analyse briefly the most important modifications.

1. Bad Faith (s. 38 (2) a.1))

The insertion of the concept of bad faith in the Act will allow the holder of a trademark that is used and known abroad, but not in Canada, to invalidate or discredit the registration of the trademark. The litigant will have to prove that the application was filed in bad faith.  In other words, trademark holder from all around the world will be able to stop registration of a trademark in Canada, by another company, who try to steal their trademark.

38 (1) Within two months after the advertisement of an application for the registration of a trade-mark, any person may, on payment of the prescribed fee, file a statement of opposition with the Registrar.

(2) A statement of opposition may be based on any of the following grounds:

(a) that the application does not conform to the requirements of section 30;

(a.1) that the application was filed in bad faith;

2. Cost and Confidentiality (s. 11.13 9) and s. 45.1 (1))

The new modifications of the Canadian Trade-Mark Act include the possibility that a penalty cost will be awarded to the prevailing party and the possibility to obtain confidentiality orders concerning sensitive commercial information from the Court. Indeed, allowing a penalty cost will make a litigant be more careful when pressing ahead with a losing case. The confidentiality order will allow parties to present extensive sales data to the Court without worrying if their information’s are being exposed to their competitors or the public at large.

(9) Subject to the regulations, the Registrar may, by order, award costs in a proceeding under this section.

45.1 (1) A party to a proceeding under section 11.13, 38 or 45 may make a request to the Registrar, in accordance with the regulations, that some or all of the evidence that they intend to submit to the Registrar be kept confidential.

3. Removal of the use requirements

All new registration applications or pending applications were exonerated from filing a declaration of use or providing a date of first use. However, the registration fee of 200$ is still required. To register a trademark in Canada, the applicant will be required to have to use the product mark in the Canadian territories or have the intention of using it in the future. Indeed, all the elements for the registration of a mark, such as use or making known in Canada, foreign registration and use, and proposed use in Canada, will be removed.

4. Nice Classification (s. 26(2) e.1) of the Act)

Nice Agreement Classification is an international treaty concerning the classification of goods and services. It is administrated by the World Intellectual Property Organization (WIPO). It consists of a list of 45 classes. The amendment to the Canadian Trademark Act will be conciliated with this classification.  All goods and services of the new or pending applications, or the expired registrations have to be classified according to the Nice Classifications. 

(e.1) the names of the goods or services in respect of which the trademark is registered, grouped according to the classes of the Nice Classification, each group being preceded by the number of the class of the Nice Classification to which that group of goods or services belongs and presented in the order of the classes of the Nice Classification.

5. Filing fees, Term and Renewal of Registration of Trademarks (s. 65 – fixed by regulations)

The filing fee for a trademark application filed electronically is $330 for the first class of goods or services, plus $100 for each additional class. Trademark applications filed before June 17, 2019, will not be subject to the payment, the fixed rate of $250 will remain for those applications, there could be significant savings in filing an application before that date. Registration of trademarks will be in force for ten years instead of 15 years. Also, the electronic renewal fee of a trademark rose to $400 for the first class of good or service and an extra $125, for every additional class. Renewal applications filed before June 17, 2019, for registration expiring after that date will not be subject to the payment of the renewal fee by class. The previous renewal fee of $350, if filed electronically, will apply.

Additionally, any new application for registration will be exanimated in order to prevent confusion between two different trademarks and to ensure the distinctiveness of the trademark. Also, it will be possible to register a non-traditional mark, including a hologram, moving image, scent, taste, colour, three-dimensional shape, texture… The definition of “distinguishing guise” in Section 2 of the Act is repealed.