Nice Classification of Trade-marks – Perhaps Not So Nice for Canadians

 As discussed in Allison McLean’s “Ch-ch-ch-ch-changes coming to the Trade-marks Act” June 5, 2014 post, significant changes to the Canadian Trade-marks Act were introduced in Bill C-31, the 2014 budget bill.  While the most controversial aspect of the trade-mark provisions of Bill C-31 is the removal of the need to claim or declare use in Canada prior to obtaining a Canadian trade-mark registration, other provisions will significantly change Canadian trade-mark practice.  For instance, the adoption of the Nice Classification system will, at the least, add an extra step in the preparation of trade-mark applications since goods and services will have to be classified under the appropriate Nice classification.  Further, it is expected that there may be additional fees imposed for multiple class applications, which will raise considerations that were not previously relevant to Canadian trade-mark practice.

Currently, the requirement under the Trade-marks Act that goods and services be stated “in ordinary commercial terms” in applications has been interpreted as requiring very detailed listings of goods and services.  Further, under Bill C-31, the language of the requirement will not be changed, such that it is expected that the current Canadian practice will be continued, at least initially, after the amendments are implemented.  Accordingly, it is not immediately evident and therefore interesting to consider what the benefits of adopting the Nice classification system will be.

To put the issue in context, it has to be understood that the requirements in Canada for specifying goods and services are stricter than requirements in almost all other countries of the world.  Further, requirement for statements “in more specific terms” of goods and services listed in applications filed in the Canadian Trade-marks Office are the most common reason for issuance of Examiner’s reports by the Trade-marks Office.  Considering sufficiency of descriptions is time consuming for examiners and responding to description requirements is time consuming for practitioners and costly for applicants.  Accordingly, there is no doubt that there would be significant cost benefit to the Government and trade-mark applicants if adopting the Nice classification system will minimize issues arising in respect of sufficiency of descriptions of goods and services in Canadian Trade-mark applications.

Another benefit to the adoption of the Nice Classification system is that it will facilitate implementation of the Madrid Protocol, which provides for the international registration of trade-marks (or more correctly a system for cost-effectively obtaining domestic registrations in multiple jurisdictions). Article 3(2) of the Protocol provides for classification under the Nice system in international applications under the Madrid Protocol.  Accordingly, adoption of the Nice Classification system goes hand in hand with the provisions in Bill C-31 for implementation of the Madrid protocol.

One issue that has been discussed in the context of descriptions of goods and services in international applications under the Madrid Protocol arises from the fact that international applications and registrations under the Protocol are based on home country applications and registrations.  However, different countries provide different scope of registration as a result of different levels of detail being required in descriptions of goods and services.  For instance, while some countries like Canada and the United States require specific descriptions, other countries like Italy and Australia accept broad specifications including Nice Classification class headings.  There are variations lying at different points along the spectrum of specificity, including many countries that will accept descriptions of goods or services provided under Nice Classification class headings and others requiring individually defined specificity.  The concern is that the scope of international registrations under the Protocol based on registration in countries requiring high specificity may be significantly narrower than those based on countries accepting broad descriptions.

The issue of scope of registrations under the Madrid Protocol was the subject of much debate leading up to the ratification of the Protocol by the United States in 2003.  Further, the scope of protection issue has been raised as a reason why there have been fewer Madrid Protocol filings originating in the U.S. than were expected (see e.g. Donald Prutzman, “Overview of the Madrid System in the United States Perspective” (2010) 25:2 Int’l Practicum p. 173 at 177).

 In light of the foregoing, it is clear that the benefit to Canadians of adopting the Nice Classification system may depend upon the extent to which the strict requirements for descriptions of goods and services are maintained by the Canadian Trade-marks Office after implementation of the Nice Classification system.  However, one also has to consider the overall effect on the trade-mark system in Canada, including the fact that registration provides a monopoly with respect to use of the registered trade-mark for the registered wares and services across Canada, and that proposed amendments to the Trade-marks Act in Bill C-8, the Combating Counterfeit Products Act, limit offences and remedies to unauthorized use of trade-marks in association with registered goods and services.

The extent to which descriptions of goods and services in trade-mark registrations should be broadened is not a trivial question.  It will be interesting to see whether and how the regulations, policies and practices of the Canadian Trade-marks Office evolve in respect of such requirements under the updated Trade-marks Act.  Hopefully, we will end up with needed clarity as to what descriptions will be acceptable; and scope for registrations that achieves a fair balance between the need to provide for effective enforcement of rights to protect brand owners and consumers, and the need to maintain a sufficient stock of language to facilitate effective selection, adoption and use of distinctive trade-marks by traders in Canada.

Brian P. Isaac is a partner at the Toronto office of Smart & Biggar/Fetherstonhaugh. Mr. Isaac’s practice has involved litigation in all areas of intellectual property for over 20 years and has appeared before the Federal Court of Canada, the Ontario Superior Court of Justice, and the Federal and Ontario Courts of Appeal. He has also acted on numerous matters before the Canadian Trade-marks Opposition Board and Patent Appeal Board. Mr. Isaac received his L.L.B. from the University of Ottawa (’89) and was called to the Ontario Bar in 1991. 

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