The Good, the Bad, and the Ugly: The Proposed Amendments to the Trade-Marks Act

April 9, 2014 | Catherine M. Dennis Brooks

The Canadian government introduced Bill C-31 on March 28, 2014. Bill C-31 is part of an omnibus budget bill, the Economic Action Plan 2014 Act, No. 1, which affects more than forty pieces of legislation and includes the most significant changes to Canada’s Trade-marks Act (the “Act”) since it was enacted in 1953.

Trade-mark owners should be aware of the proposed changes as these changes will significantly affect trade-mark prosecution and portfolio management strategy.

The amendments are intended to make the Act consistent with the Singapore Treaty on the Law of Trademarks (the “Singapore Treaty”) and give the government the authority to make regulations for carrying into effect the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (the “Madrid Protocol”).

The harmonization aspects of the amendments will have the effect of enabling Canada to meet its international treaty obligations. The amendments to the Act are intended to harmonize Canada’s process with the standard procedures in the Singapore Treaty and the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (the “Nice Agreement”). The amendments are also proposed in preparation for the implementation of the Madrid Protocol which will permit Canadian brand owners access to an international system of trade-mark registration.

Some of the welcome changes introduced by Bill C-31 include features relating to modernization and harmonization. These welcome amendments include:

1. The simplification of trade-mark applications, including eliminating the requirement that the application indicate a “date of first use” or indicate whether it is filed on the basis of use or proposed use, or the details of any use and registration abroad;

2. Removing the requirement to file a declaration of use before registration of a trade-mark;

3. Provisions allowing for trade-mark applications to be divided, permitting applicants to obtain registration for the goods and services for which the applicant can claim use, while maintaining the rest of the application for the goods and services not yet in use. This is particularly welcome in situations where an objection relates to only one of the goods or services covered by an application.

4. The uniquely Canadian way of spelling “trade-mark” will be eliminated, the Act will be known as the Trademarks Act and all references will be changed to “trademark” with no hyphen;

5. The term “wares” will be replaced with “goods”, which is the terminology used in the United States; and

6. The definition of trade-marks will be changed to a “sign or combination of signs”. This expanded definition includes various non-traditional trade-marks, including colour, three-dimensional shapes, holograms, modes of packaging goods, a sound, a scent, a taste, a texture and the positioning of the sign.

By simplifying the trade-mark application process, the amendments may result in lower costs associated with these applications. Divisional applications are often beneficial to trade-mark owners and will likely result in a cost saving as well.

Some of the amendments to the Trade-marks Act that raise concern and which may result in the potential for increased costs associated with obtaining, maintaining and enforcing trade-mark rights include the following:

1. The reduction of the term of registration of a trade-mark from fifteen years to ten years;

2. The adoption of the classification system established by the Nice Agreement, which may also result in higher costs since other countries using this system charge an additional fee for every additional category of goods and services. Canada currently charges CDN$250 for the filing of an application, regardless of the number of goods and services listed in the application. There will also continue to be fees associated with the requirement that the goods and services be described in “ordinary commercial terms” as this requirement has not been eliminated.

3. The proposed amendments provide that the Registrar will have discretion as to whether the proposed changes will impact those with pre-existing registered trademarks.

The proposed amendments have also raised some concern about the uncertainty associated with trade-mark clearance searches as well as risk analysis relating to opposition proceedings and infringement actions. The uncertainty stems from the fact that the test for entitlement depends on the first use date, yet dates of first use of trade-marks will no longer be available on the Trade-marks Register as that information no longer has to be supplied when a trade-mark application is filed and no declaration of use has to be filed. As a result, if these changes become law, it will be more difficult to evaluate the impact of new applications.

The content of Bill C-31 as it relates to the Trade-marks Act will likely change as it goes through the House of Commons and the Senate. As currently drafted, there are some positive aspects to the proposed changes, some negative aspects, and much uncertainty. We will report further as Bill C-31 proceeds through the legislative process.

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