Canadian Trademark Law Updates

• Published date: 17 June 2020
• Author: Mr Scott Lamb
• Subject Matter: Intellectual Property, Trademark
• Law Firm: Clark Wilson LLP

This article reviews material developments in Canadian legislation, case law and practice in the area of trademarks in 2019. All references in this article to the "Act" refer to the Trademarks Act, R.S.C. 1985, c T-3, as amended. This article was originally published by The Continuing Legal Education Society of British Columbia in their "Annual Review of Law & Practice - 2020".

A. Introduction

On June 17, 2019, long-awaited amendments to the Trademarks Act, RSC 1985, c T-3 (the "Trademarks Act") finally came into force. These amendments were preceded by anticipatory changes to the Trademarks Act, passed in November 2018, and various consultations between practitioners and the Canadian Intellectual Property Office ("CIPO") involving the repeal and replacement of the Trademarks Regulations, SOR/2018-227 (the "Regulations"). CIPO has also repealed and issued a large number of practice notices.

Together, these changes affect almost every aspect of trademark law in Canada. The full effects of many of these changes are not yet clear; most of the major court decisions issued in 2019 concerned proceedings commenced prior to the date on which the amendments came into force, or were based on the provisions of the Act as they read prior to the changes (due to transitional provisions contained in the relevant amending legislation). Because of the fundamental nature of the changes to trademark law which occurred in 2019, Federal and Provincial Courts will likely grapple with the implications of these changes for many years to come.

That said, Federal and Provincial Courts also rendered many decisions in 2019 which will affect the practice of trademark law moving forward. These cases temper our understanding of issues regarding standard of review, interlocutory injunctions, the definition of trademark "use", cost awards in Federal Court, and various other aspects of the practice of trademark law.

B. Legislation and International Treaties

1. Amendments to the Trademarks Act

As reported last year in detail, numerous and significant amendments to the Trademarks Act were scheduled to, and did, come into force on June 17, 2019¹. These changes represent the most extensive overhaul of Canadian trademark legislation since the 1950s. These changes result from several bills passed by Parliament, beginning in 2014, including the Economic Action Plan 2014, No. 1, SC 2014, c 20; the Combating Counterfeit Products Act, SC 2014, c 32; the Budget Implementation Act 2018, No. 2, SC 2018, c 27; and the College of Patent Agents and Trade-mark Agents Act, SC 2018, c 27, s 247.

Many of these amendments have been pending for several years. A brief summary of the amendments now in force is listed below:

• Filing bases and declaration of use: The amendments have eliminated of the need to provide a filing basis for a new application or file a declaration of use prior to registration. While the filing process has been somewhat streamlined as a result, this has led to concerns among members of the profession about the potential increase in trademark trolls and squatting.
• Bad faith and use requirements: Bad faith has been added as a separate ground of opposing an application or seeking invalidation of a registration.
• Nice Classification and updated fee structure: All future applications and existing registrations will be required to group goods and/or services according to the Nice Classification System, and filing and renewal fees are now based on the number of Nice Classes included in an application or registration.
• Expanded definition of "trademark": The amendments have expanded the definition of a "trademark" to cover a wider range of distinguishing "signs" - and the word "sign" itself is defined to include word, a personal name, a design, a letter, a numeral, a colour, a figurative element, a three-dimensional shape, a hologram, a moving image, a mode of packaging goods, a sound, a scent, a taste, a texture and the positioning of a sign.
• New ground of examination based on "lack of distinctiveness": Examiners at CIPO can now object to an application for a trademark on the grounds that it lacks distinctiveness, in addition to historical grounds of objection such as clear descriptiveness or confusion with an earlier trademark. Practitioners have already seen a significant number of such objections raised for applications which had not been advertised prior to the coming-into-force date of this amendment.
• Shortened term of registration: For all trademarks registered or renewed after June 17, 2019, the term of protection has shortened from 15 years to 10 years.
• Divisional applications: Applicants can now divide a single trademark application into multiple "divisional applications"; for instance, to overcome an Examiner's objection which applies to some goods and services listed in an application, but not to others.
• End of association of marks: The practice known as "association", under which CIPO would not recognize the transfer of potentially confusing trademarks owned by a single person if the transfer results in ownership by more than one person, has been eliminated.
• Entry into the Madrid System: Canada is now a member of the Madrid System for the Registration of International Trademarks, which is designed to facilitate the registration of trademarks across borders by allowing owners of an International Registration to request extensions of protection for their trademarks in the territories of other Madrid System countries.
• Priority parity: Applicants can now claim priority filing dates based on their first application filed in any country which is a member of the World Trade Organization or the Paris Convention for the Protection of Industrial Property. Historically, CIPO only accepted priority claims where the application on which the claim is based was made in an applicant's country of origin.
• No supporting documents for mergers and assignments: CIPO no longer requires documentary proof of assignments or mergers where the current owner requests the recordal of a merger or assignment - however where a request to record an assignment comes from an assignee, supporting documentation will generally still be required.

Other changes are pending but not yet in force. For instance, the Registrar's powers over opposition and section 45 proceedings will be expanded under pending amendments, allowing the Registrar to impose costs on parties, to make confidentiality orders in the course of contentious proceedings, and to engage in more active case management of proceedings (such as setting timelines). Further pending amendments create a procedure for challenging the public notice of Official Marks, on the basis that the owner of the mark no longer exists or is not a public authority.

Another significant change which is not yet in force would require owners of registered trademarks to adduce proof of use of their marks in Canada, or special circumstances excusing non-use, in any action brought by the owner for infringement or depreciation of goodwill during the first three years after their registration issues. This amendment, introduced as part of the "surprise" trademark amendments contained in the Budget Implementation Act 2018, No. 2, supra, is intended to curb potential abuses which may arise under the new system of trademark registration, which no longer requires an owner to show use of its trademark in any country in the world prior to obtaining a registration.

Also awaiting a coming-into-force date is the College of Patent and Trade-marks Agents Act, supra. This legislation creates a new regulatory body for Patent and Trademark Agents, requiring such persons to meet appropriate standards of professional conduct and competence, as well as imposing penalties for unauthorized practice by persons not licenced by the College. It also, somewhat unfortunately, re-introduces the hyphen to the word "trade-mark" previously removed by the Economic Action Plan 2014, No. 1, supra, to the name of the College only - meaning, in the absence of further legislation, the College of "Trade-mark Agents" will oversee professionals practicing "trademark law" in Canada.

2. International Treaties

In 2018, Canada, the US and Mexico negotiated a new treaty to replace the North America Free Trade Agreement ("USMCA"). Bill C-100, implementing the USMCA, was introduced to the Canadian Parliament in May 2019. As of the date of this writing the USMCA had received its Second Reading in Parliament and it will likely be approved upon approval of the USMCA by the US Congress . The US House of Representatives has approved the USMCA. The US Senate is expected to approve the USMCA in 2020 bringing it into force in the US.

The USMCA contains a number of provisions which affect IP law in Canada, including the law of trademarks. These include requirements to accede to various International Treaties regarding trademarks, including the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks and the Singapore Treaty on the Law of Trademarks. Canada has already met these requirements through the various legislative amendments discussed above.

Further amendments to Canadian trademark law, necessitated by the USMCA, are included in Bill C-100. These amendments would create a presumption of infringement against commercial importers of goods bearing marks that cannot be distinguished from a trademark registered for the same goods. The pending amendments will also repeal existing exemptions for infringement concerning goods which are located in Canada only for customs control or transshipment purposes. These changes are meant to address the US's perception of Canada's leniency towards the global distribution of counterfeit goods.

3. New Trademarks Regulations

In order to implement the various changes to Canadian trademark law discussed above, the previous...