aba – spring conference, march 2015 presented by: john mckeown cynthia rowden 1

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A Trademark Overhaul! Canadian Trademarks

Amendments and their Effect on U.S. Trademark Owners

ABA – Spring Conference, March 2015Presented by: John McKeown

Cynthia Rowden

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Chronology of TM Changes

• March 2013 – Combating Counterfeit Products Act (“CCPA”) introduced (Bill C-56/C-8)

• Fall, 2013 – Comprehensive Economic Trade Agreement (Canada/EU) text confirms intent to use best endeavors to complete key IP Treaties

• January 27, 2014 – Madrid Protocol, Singapore Treaty, Nice Agreement tabled in Parliament (first step of ratification)

• March 28, 2014 – Bill C-31 introduced, major changes to TM law

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Chronology (cont’d)

• June 19, 2014 – Bill C-31 TM Act changes given Royal Assent (not yet proclaimed in force)

• October-November – Consultation on Discussion Document re: changes to Regulations

• December 9, 2014 – Royal Assent to CCPA, some provisions proclaimed in force

• January 1, 2015 – CCPA provisions on Customs Assistance Program proclaimed in force

Momentum for change

• Driven by international trade negotiations and agreements.

• CCPA – response to international pressure to address lack of effective border controls to prevent import/export of counterfeits.

• Bill C-31 - driven by the negotiation of the Comprehensive Economic and Trade Agreement (“CETA”) between Canada and the European Union.

• All changes reflect desire to harmonize Canadian TM systems (especially with EU) and simplify procedures for applicants

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Combatting Counterfeit Products Act

• Adds expanded infringement provisions (s. 20) – includes sale, distribution, manufacture, possessing, import, export and attempts to export goods, labels and packaging

• Adds new criminal sanctions (ss.51.01-51.09) for acts w/o consent of owner, on a commercial scale, if person knows that TM is identical to or cannot be distinguished in essential elements from registered TM. Applies to goods, labels and packaging

• Fines up to $1,000,000, imprisonment up to 5 years.

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CCAP (cont’d)

• New Request for Assistance Procedure • Administered by Canada Border Services Agency

(CBSA) • Permits owner of registered TM, or copyright, to

file a Request for Assistance (RFA) • Once filed, CBSA may detain suspected

counterfeits • Valid for 2 years, may be renewed. Must be

updated with any change to owner, address

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CCPA (cont’d)

• Temporary detention only – 10 working days, or 5 if good perishable

• Detention will continue ONLY if IP rights owner commences litigation for infringement

• Exceptions: o Trademark applied with TM owner’s consent (gray

goods); o Sale, distribution not contrary to TMA o Personal use goods o Goods in transit

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CCPA (cont’d)

• Temporary detention – IP rights owner will receive info to confirm: if goods are counterfeit and identify source

• After 10 days, goods kept in detention if action started

• Detention costs payable by IP rights holder (bonded warehouse)

• Further possible costs – security order to cover duties, detention costs, damages;

• Possible costs if goods forfeited, or for losses, costs to importer if proceedings dismissed, discontinued

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CCPA - Issues

• Costs to the victim - ever recoverable? • No option of summary notice, require importer to

confirm intent to defend • Goods in transit are excluded• No statutory damages for TM infringement (cost

to TM owners to prove damages).

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CCPA - Practical Tips for IP Owners

• Register, and check list of goods for likely counterfeits

• Confirm “system” for responding, given short deadlines

• Try to settle as quickly as possible • No “fee” or security to record IP now, may

change, so consider doing ASAP • Interaction with CBSA will improve successful

enforcement

Bill C-31:The Economic Action Plan 2014, No. 1

• Introduced March 28, 2014 • Omnibus “budget” bill, addressing > 60 other

unrelated laws• No advance public consultation. • Considerable adverse reaction from business,

industry groups and IP groups, including ABA• No changes • Received Royal Assent on June 19, 2014.

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• The Bill has not yet been proclaimed into force. This will not likely occur until 2016. Fee consultation required and regulations need to be finalized.

• On October 2014 CIPO published an online discussion document concerning its proposed approach to the regulations. Consultation closed November, 2014.

Bill C-31:The Economic Action Plan 2014, No. 1

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Registration Without Use

The Trade-marks Act has been amended to remove the requirement to specify in an application a date of first use or any other ground supporting the application.

In addition, Section 40 of the Act has been amended to remove any requirement to file a declaration of use.

As a result it will be possible to obtain a trademark registration without ever using the mark in Canada, or elsewhere.

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There are significant concerns with respect to this change and the negative impact it will have.

• Cost, complexity and uncertainty relating to decisions concerning selection and use of trademarks and trade names in Canada will be increased with no information about use (when, where) on the register;

• The lack of useful information on the register will also require that expensive investigations be carried out before meaningful advice can be provided concerning the chance of success in a trademark opposition or an action for infringement;

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• More applications with longer lists of goods/services;

• More oppositions (compare Canadian to EU rates);• Trademark “trolls”;• Impact on s. 45 (non-use) proceedings; • Rights “in gross” invites constitutional challenge

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Changes in Nomenclature

The long title of the Act is An Act relating to trademarks and unfair competition which may be cited as the Trademarks Act.

“trademark” means:

a) a sign or combination of signs that is used or proposed to be used by a person for the purpose of distinguishing or so as to distinguish their goods or services from those of others, or

b) a certification mark.

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Distinctiveness

During the examination of an application an examiner is entitled to consider the distinctiveness of the applied for trademark and to issue an examiner’s report refusing an application on the ground that the applied for mark is not distinctive.

An examiner will be able to require that the applicant file evidence establishing that the trademark is distinctive in Canada at the date of filing if the examiner’s preliminary view is that the trademark is not inherently distinctive.

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Distinguishing Guise

The definition of “distinguishing guise” has been repealed. The concept of a distinguishing guise referred to a shaping of wares or their containers or a mode of wrapping or packaging wares that had become distinctive.

Amended Act now includes “3-D shapes” in the broad definition of “sign”.

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Broadened Scope of Applications

The new definition of the term “sign” significantly broadens the scope of what may be registered as a trademark. The use of the word “sign” also is consistent with the language of the Singapore Treaty, and will include new marks such as color (alone), scent, taste and texture, as well as positioning of marks.

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The process of dealing with applications is changed. An applicant who seeks to register a trademark that consists only of letters, numerals, punctuation marks, diacritics or typographical symbols, or of any combination of them, without limiting the trademark to any particular font, size or color shall:

a) file a representation under paragraph 30(2)(c) that consists only of characters for which the Registrar has adopted standard characters;

b) include in their application a statement to the effect that they wish the trademark to be registered in standard characters; and

c) comply with any prescribed requirements.

Changed Filing Procedure for Non-traditional Marks.

Evidence of distinctiveness, in Canada, at filing date, may be required for marks that exclusively or primarily consist of one or more of the following signs:

• the three-dimensional shape of any of the goods specified in the application, or of an integral part or the packaging of any of those goods,

• a mode of packaging goods,

• sound, scent, taste or texture

Distinctiveness Evidence Required For Broader Range of Marks

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Broadened Scope of Application

Requirements suggest only non-traditional marks already in use in Canada, or widely advertised in Canada before filing may be registered.

Proof of “distinctiveness” means considerable time and effort to locate evidence by region and prepare affidavits.

In addition it is anticipated new regulations or revised practice directions will clarify the specific requirements for each of these signs, including the resources the Trademarks Office may use to assess distinctiveness.

Entitlement

An applicant, subject to any opposition, is entitled to secure its registration, unless at the filing date of the application or the date of first use of the trademark in Canada, whichever is earlier, it was confusing with

a) a trademark that had been previously used in Canada or made known in Canada;

b) a trademark in respect of which an application for registration had been previously filed in Canada; or

c) a trade name that had been previously used in Canada.

NOTE- new applications will not include filing grounds. 23

The Nice Classification System

“Nice Classification” means the classification established by the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks, signed at Nice on June 15, 1957, including any amendments, modifications and revisions made from time to time to which Canada is a party.

Section 6 TMA, dealing with confusion, has been modified to clarify that the fact that the relevant goods or services are not of the same general class or appear in the same class of the Nice Classification is not determinative

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The information on the register of trademarks will include the names of the goods or services in respect of which the trademark is registered, grouped according to the classes of the Nice Classification, each group being preceded by the number of the class of the Nice Classification to which that group of goods or services belongs and presented in the order of the classes of the Nice Classification.

An application must group the goods and services in the same fashion.

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While not specifically addressed in the Act it is anticipated that there will be a separate filing fee for each class of goods or services included in an application, or possibly a volume discount, for example, 3 classes for one fee (expect Consultation on fees Spring, 2015).

The reference to “specific wares or services” in section 30(a) has been amended to remove the word “specific” so that the requirements under the Act will be more consistent with the requirements in other countries.

Any question arising as to the class within which any goods or services are to be grouped shall be determined by the Registrar, whose determination is not subject to appeal.

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Applications that were received by the Registrar before the day on which that section 339 (filing requirements/filing dates) of Bill C-31 comes into force, and that have not been advertised must comply with the above requirement.

For applications that have been advertised before the day on which section 342 of Bill C-31 (completion of all filing requirements) comes into force the Registrar may require an applicant to amend the statement of goods or services to comply.

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The Register may require that a registered owner of a trademark provide to the Registrar, a statement of the goods or services, that complies with the above requirement.

If the statement is not furnished, the Registrar shall fix a reasonable time after which, if the statement is not furnished, the Registrar may expunge the registration or refuse to renew it. Discussion Document on changes to Regs. suggested one year limit.

Applications

Applicant may file an application if it is using, or proposes to use, and is entitled to use a mark in Canada for specific goods and services • Not clear that applications will include either use

details or statements of entitlement – not contemplated in Regs. Discussion Document.

• TMO will restrict entitlement examination (rights between applicants) to date of filing, convention priority date, so first to file will provide strategic advantages

• Madrid Protocol filings to be accepted (fees, procedure to be handled by regulation)

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Claiming Convention Priority

The basic rules relating to making a claim remain unchanged. However, because the reference to “country of origin” in subsection 16(2) has been removed an application and claim to priority can be based on a filing of an application in any country of the Union other than Canada and is no longer restricted to the applicant’s “home” country.

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Examination

• Expect that TMO will continue to examine for existing inherent registrability grounds, including confusion with registered trademarks.

• New registrability ground: if features are dictated primarily by a utilitarian function

• New distinctiveness examination• Concerns that expanded lists of goods/services, time

limits imposed by Madrid Protocol for examination will put pressure on TM Office to limit examination.

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Next Steps

• Regulations need to be drafted and distributed for comment

• Fee consultation (Madrid and Nice Classification) • CIPO IT requirements • New Head of Trademarks Branch • Specific implementation date not known (now

estimating 2016)

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Impact of Amendments: Searching and Examination

• Amendments shift costs of maintaining the accuracy of the Register to applicants (use, declaration of use requirements no longer act as “brake” on Register)

• How will applications/registrations with long lists of goods/services impact searching/risk analysis by potential applicants?

• How will TMO examine applications?• How will TMO meet Madrid Protocol examination

deadlines? (currently 7 - 9 months for an application to be examined)

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Impact of Amendments: Oppositions

• No clear guidelines yet on what is acceptable “proposed use” but likely to be main ground of opposition

• Evaluation of likelihood of success in opposition will be more difficult with no use information in application

• Number of oppositions expected to increase (Head of Opposition Board estimated by 2-4x) NOTE: Oppositions now take more than 4 years if fully contested.

• Appeals to Federal Court also likely to increase • “Use” is still important in assessing confusion

(subsection 6(5) of TMA) – will applicants/registrants with use still have an advantage?

• More uncertainty and risk for trademark owners

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Impact on Amendments: s.45 Proceedings

• With no use to obtain registration or to renew, expect more non-use proceedings to cancel “clutter” on the Register

• After 3rd anniversary of registration, any person may request notice to registrant to prove use in Canada in last 3 years

• TMO also has right to send notice after 3 years (previously, could at any time), and may use to control “abuse”

• One flaw: since may re-register without use, s. 45 will only be useful if there is an intervening right

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Impact on Amendments: Enforcement

• Bill puts no limitation on right to enforce registration obtained without use

• Will ‘use’ continue to be the cornerstone of trademark rights in Canada?

• Assessment of confusion includes a significant “use” component

• Passing off, depreciation of goodwill would appear to require use

• Will Federal/Provincial courts assess registration rights similarly?

• How long until a constitutional challenge?

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Practical Considerations: What You Can Do Now?

• File now to avoid filing/class fees (can fees be applied retroactively?)

• File “defensive” applications? Cost of registration is less than the cost of opposition/cancellation

• Special considerations for famous TMs?• File for “wish list” of goods and services?• Given ease of registration (no use), ensure that existing

common law marks will not be poached and file now • Assess portfolio for possible non-traditional mark applications

that might not be registrable under a new distinctiveness examination, e.g. numbers, letters, punctuation, colour/shape combinations and sound, and file now

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Main Points in Regulation Discussion Document

• More online filing options • 24/7 filing (impact on deadlines?) • Applicants responsible for classification • Letters of Protest during application • Division (during opposition, only if opponent

confirms it will not oppose)• Permitting TMs to be amended if “substantially

the same” including after allowance• Time restrictions on renewals

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Implementation of Madrid Protocol by Regulation

• Outgoing applications, subject to certification/fees by CIPO, time limits to examine to maintain filing dates

• Incoming applications (International Registrations Designating Canada or IRDCs) deemed to be filed in accordance with s. 30 (impact on oppositions?)

• Timing deadlines to examine IRDCs – will that impact examination of regular applications?

• Somewhat different timing requirements for oppositions for IRDCs

• Understanding “dependency”, “transformation” and “replacement” concepts

• Importance of IT requirements (U.S. took 4 years to fully implement)

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Proposed new Opposition and S. 45 Rules

• Change deadlines, to relate to “act” vs. when act done by each party

• Regulate the assessment of “leave” applications (to amend, etc.) so that provisions in the Regulations, vs. Practice Notices

• Case management in appropriate cases (e.g. multiple cases, same parties)

• Written arguments seriatum

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When will changes come into effect?

• Second consultation on fees • Response, drafting of regulations, consultation

(voluntary use requirement suggested). • Implementation of new IT provisions • Best estimate of implementation - 2016

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• Assess and prioritize allowed applications now to be ready for proclamation of Bill C-31 into force (rush to register allowed apps)

• Importance of watch services for key trademarks• Since Bill C-8 has proceeded, and rights to Customs

assistance apply only to registered trademarks (and copyright), get applications filed for marks at risk of counterfeit. Include non-traditional rights e.g. patterns, designs, labels, logos that are counterfeited

Practical Considerations: What You Can Do Now?

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Any Questions?

Thank you.

John McKeown Cynthia Rowden

aba – spring conference, march 2015 presented by: john mckeown cynthia rowden 1

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