Canadian Trade-Marks: Year In Review 2017

1. Introduction

   Incredibly, the significant amendments passed in 2016 to the Trade marks Act, R.S.C. 1985, c. T-13 (the "Act") and the anticipated corresponding amendments to the Trade-marks Regulations (SOR/96 195) (the "Regulations") were still not brought into force in 2017. At present, it is believed these will be brought into force sometime in 2019.

   However, draft amendments to the Regulations were issued for comment in 2017, which provided at least some progress on the significant reforms to the Act on which we have reported in previous issues of the Annual Review.

   In 2017, there have been some interesting and important decisions of the Supreme Court of Canada, Federal Court of Appeal, Federal Court, and British Columbia Court of Appeal on trade-mark matters, including cases involving keyword advertising, parody, injunctions, and confusion over trade dress.

2. Legislation

   1. Amendments to the Trade-marks Act

      We reported last year that it was believed that the significant reforms to the Act passed in 2014 were likely to be brought into force in late 2018. Once again, it appears there will be further delays, and it is now anticipated that the amendments will be brought into force in 2019.

   2. Amendments to the Regulations

      Despite ongoing delays in the final implementation of amendments to the Act, on June 19, 2017, the Canadian Intellectual Property Office ("CIPO") released its draft Regulations for comment.

      The key changes identified in the draft Regulations include the following.

      1. Term and Renewal

         The new term for a trade-mark registration will be 10 years once the amendments to the Act come into force. The term for registrations in existence prior to the amendments coming into force will remain at 15 years until the next renewal date for the registration, at which point it will convert to the shorter 10-year term.

      2. Applications

         Applications for registration of trade-marks will no longer include the dates of first use of the trade-mark by the applicant. Similarly, there will no longer be any filings of declarations of use.

         Pursuant to the Madrid Protocol, international registrations of a trade mark through a single application by Canadians will be possible, and foreign trade-mark applicants will be able to include Canada in their international applications.

      3. Classification System

         Applicants will have to comply with the Nice Classification of goods and services, which currently applicants can do voluntarily. Existing registrations will have to be amended to include classifications within six months after a receipt of notification from CIPO and as part of the renewal process.

      4. Office Actions

         Similar to procedures in the United States Patent and Trademark Office, CIPO will permit third parties to raise registerability issues during the examination by CIPO of a trade-mark application.

      5. Fees

         The application filing fees and renewal fees will increase due to the classification system. The fees are detailed in the schedule to the draft Regulations.

      6. Opposition and Cancellation Proceedings

         The opposition proceedings in CIPO will be significantly altered. The service and filing of transcripts of cross-examinations on affidavits will be the responsibility of the party conducting the cross-examination. The service and filing of responses to undertakings given by an affiant during cross-examination on affidavits will be the responsibility of the party whose affiant is being cross-examined.

         Written submissions of the parties will no longer be filed in CIPO simultaneously but rather will be in sequence. In an opposition proceeding the opponent will file first and then the applicant. However, in cancellation proceedings under s. 45 of the Act, the party requesting cancellation will file first and then the trade-mark registrant will file.

         Copies of affidavits and statutory declarations may be filed with CIPO but the party doing so must retain the original for one year following the expiry of the applicable appeal period. Further, it appears that such evidence may be filed in CIPO electronically.

3. Administrative Practice

   In 2017, CIPO issued three practice notices, which are briefly summarized below:

   1. Practice in Objection Proceedings under s. 11.13 of the Act dated September 21, 2017

      With respect to objection proceedings concerning geographical indications under s. 11.13 of the Act, the practice notices entitled Practice in Trade-mark Opposition Proceedings, in effect since March 31, 2009, and Email Communications of Hearing Correspondence apply mutatis mutandis.

   2. Correspondence Procedures dated May 10, 2017

      Changes were made to the correspondence procedures with regard to:

      physical delivery of correspondence to CIPO; designated establishments; registered mail and Xpresspost; electronic correspondence; facsimile; online; electronic medium; general information; statutory holidays; procedures in case of unexpected office closure at CIPO; and procedures when CIPO is open for business but clients are unable to communicate with CIPO. 3. Email Communications of Hearing Correspondence dated March 1, 2017

      Since March 1, 2017, CIPO has provided the parties to opposition or s. 45 proceedings with an email address to ensure the timely communication of incoming hearing correspondence. Parties are requested to forward copies of all subsequent correspondence sent to the Registrar of Trade-marks to the email address provided.

      It is important to note that this does not provide for an additional method of correspondence with the Registrar and compliance is still required with the Regulations and practice notices with respect to opposition proceedings. Further, a list of case law will still be required to be sent five business days before the hearing.

4. Case Law

   In 2017, there were a number of interesting decisions in the Supreme Court of Canada, Federal Court of Appeal, Federal Court, and British Columbia Court of Appeal on a variety of issues, including the following cases.

   1. Amendment to Pleadings

      The year 2017 saw a couple of interesting cases dealing with the procedural issues in trade-mark opposition proceedings before the Trade-marks Opposition Board.

      In Manufacturers Life Insurance Co. v. British American Tobacco (Brands) Ltd., 2017 FC 436, the Federal Court heard an application for judicial review of the decision in an Opposition Board proceeding where the Registrar of Trade-marks (the "Registrar") struck out a ground of opposition in the statement of opposition pleading. The opponent, Manufacturers Life Insurance Co. ("Manulife"), alleged in its statement of opposition that the amendment by the applicant, British American Tobacco (Brands) Ltd. ("BAT"), of its trade-mark application to rely on a different foreign registration was not in conformity with s. 30(d) of the Act.

      Manulife complained that BAT would receive an advantage of an earlier entitlement date and have an impact on other parties that wanted to register a trade-mark in that period. Further, Manulife argued that by amending the application BAT abandoned its earlier filing date and as a result had no foreign use as set out in its amended application.

      The Registrar held that the pleading in the statement of opposition did not constitute a proper ground and ordered it to be struck. Specifically, BAT had the right to amend its application under the Act to rely on a different foreign registration. The Registrar found that the allegation in the statement of opposition did not put into question BAT's compliance with the requirements of s. 30(d) of the Act and could not form a valid ground of opposition.

      On the judicial review by the Federal Court, the issue was determined on the standard of whether the Registrar's decision was reasonable, and the Federal Court stated that the court looks for "the existence of justification, transparency and intelligibility within the decision-making process" and considers "whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law" (at para. 21).

      The Federal Court held that the test for striking out a ground of opposition was whether "considered in the context of the law and the litigation process, the claim has no reasonable chance of succeeding" (at para. 60). In this regard, the Federal Court cited (at para. 61) the recent case of the Federal Court of Appeal in Teva Canada Ltd. v. Gilead Sciences Inc., 2016 FCA 176:

      The standard of "reasonable prospect of success" is more than just assessing whether there is just a mathematical chance of success. In deciding whether an amendment has a reasonable prospect of success, its chances of success must be examined in the context of the law and the litigation process, and a realistic view must be taken.

      In view of the unchallengeable right of BAT to amend its application, the Federal Court held that while Manulife's argument was novel, it had "no reasonable prospect of success when viewed realistically in the context of the applicable law" (at para. 64).

      In another case concerning an amendment of a statement of opposition, the Federal Court of Appeal in McDowell v. Automatic Princess Holdings, LLC, 2017 FCA 126 heard an appeal from the Federal Court's dismissal of the judicial review application of the interlocutory decision of the Opposition Board's decision to refuse to allow an amendment of the statement of opposition.

      In this case, Heather McDowell ("McDowell") opposed the application of Automatic Princess Holdings, LLC ("Automatic") to register the trade-mark HONEY B. FLY. McDowell realized late in the Opposition Board proceedings that she had failed to plead confusion with her own trade-marks HONEY and HONEY & Design and the provisions of s. 12(1)(d) of the Act in that regard. It was on this issue that McDowell sought to amend her statement of opposition, which was refused by the Opposition Board.

      On the judicial review application brought by McDowell of this interlocutory decision of the...