From the Practitioner’s Perspective: Are the New Trademark Regulations an Improvement or Hindrance?

As of June 17, 2019, the new trademark regulations announced by the Government of Canada in November 2018 came into force. There have been several notable changes, including the implementation of the Madrid Protocol for international trademark applications and a reduced term of registration before renewal from 15 to 10 years. While these amendments were meant to simplify the registration process and put Canadian law in line with international treaties, the question of its practical impact remains. I am grateful to Kelly Gill, a partner and IP lawyer at Gowling WLG, who spent some time helping me understand the changes from a practitioner’s point of view.

When asked about the most significant changes the new regulations implemented, Gill highlighted that the ability to register without having first used a mark is one of the most significant changes, in addition to joining the Madrid Protocol. There are also a number of challenges that practitioners must deal with when reconsidering filing strategies with their clients.

Challenges with the New Regulations

a) Monitoring and Opposing Trademark Applications

The way that trademark lawyers monitor and oppose applications has changed. Previously, it was easier to oppose applications when it was plainly recorded whether a company used a mark and what the date of first use of the mark was. Now, with no requirement to declare if and when a mark has been used, there are extra steps that practitioners must take when researching existing trademark applications and registrations. This research may not be very accurate, and these additional steps make it difficult to advise clients on whether they should be opposing a trademark application. It would be inefficient and potentially detrimental and costly to clients if their lawyers sent out demand letters to ask other parties to cease their use of a mark, only to have them respond that they have been using the mark before the client.

b) Examiners’ Discretion

Gill also noted that examiners can now refuse applications based on a lack of “inherent distinctiveness”—the ability of a mark to distinguish the source of goods and services with which they are associated. He raised this as an issue as he sees it being used inconsistently, and at times inappropriately. This creates another layer that is slowing applications down and driving costs up. At this stage, there is little jurisprudence or guidance as to how this objection will be used and what will be required in a response where it is raised.

c) Accessibility

Another change to the trademark system is that the fee for applications is now based on classes of goods and services, as set out in the Nice Classification system. Therefore, the more classes an applicant would like to include in their application, the higher the cost. While this could have resulted in a barrier to accessing trademark protection, Gill explains that not many applicants use a mark in enough classes to make this change prohibitive. Based on his experiences, this change has not impacted people’s willingness to apply for trademark protection.

The Use Requirement

The use requirement previously required applicants to sign a Declaration of Use, confirming that they have used the mark.

In anticipation of the new regulations, which eliminates this requirement, some lawyers in the industry speculated that Canada has moved from a first-to-use to a first-to-file system. On the contrary, Gill argues that all that has changed is the basis for registration. Canada still has a use-based system and all rights continue to flow from use. The only difference currently is that you may secure trademark protection before actually using the mark. After this, use is the basis on which you oppose other marks and assert trademark rights, which is illustrated in the example of the demand letter above.

One implication of removing the use requirement for registration is that it is much easier for trademark trolls to register marks they do not intend to use and sell them back to interested parties. While Gill noted that these trolls are an issue under the new regulations, he noted that there are an easily-identifiable group of trolls that have filed hundreds of applications across several goods and services. Thus, the increase of trolls in the trademark database is not a huge concern at this point and Gill has not yet seen any particular negative impact.

Some lawyers have also noted that there are changes that can counter the rise of trademark trolls. For example, Bill C-86 includes the following amendments to the Trademarks Act:  a) registered trademark owners may not obtain relief for trademark infringement in the first three years after registration and b) registration may be opposed or invalidated based on a new ground of “bad faith”. Gill confirmed that these provisions make it hard for trolls to enforce their trademark protections if they are not using the marks.

What’s Next?

Gill proposed one simple resolution: applicants should be required to disclose if and when a mark has been used. He does not propose use as the basis for registration, but rather explains that this mandatory disclosure could ease the research process for practitioners, clarify any disputes regarding use, and easily isolate trademark trolls. This solution could also help clear the now crowded register and reduce the cost of clearing out marks for use-based reasons. The challenges lawyers currently face with the new regulations are not debilitating. The challenges, however, illustrate inefficiencies and room for improvement in reducing the costs associated with monitoring the trademarks Register and opposing applications.

Written by Summer Lewis, a second year JD Candidate at Osgoode Hall Law School. Summer is also the Content Editor of the IPilogue.

 

A partner at Gowling WLG since 1999, Kelly Gill is best known for his intellectual property litigation practice, particularly in the areas of trademarks and unfair competition. Kelly is past leader of the firm’s Trademarks, Brands & Designs and IP Litigation & Strategy groups.

 

 

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