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The Lawyers Weekly – The Effects of Trademarks Modernization – by guest columnist Tim Bourne

21/09/2010

Recent trademark law amendments by G8 countries have prompted the Canadian Intellectual Property Office to re-assess Canada’s trademark regime. While Trademarks Act revisions are necessary, it is essential that they protect the interests of Canadian trademark owners and maintain the current benefits of Canadian practice.

Possible adherence to two treaties, known as the Madrid Protocol and the Singapore Treaty, is guiding CIPO’s efforts. The Madrid Protocol permits trademark owners in member countries to register their rights in multiple jurisdictions by filing a single application. When compared with the current practice of filing multiple applications, a Madrid filing reduces costs, but only for those who file in more than four jurisdictions. This does not apply to a significant majority of Canadian applicants and adherence to Madrid will offer them little, if any, benefit.

The Singapore Treaty standardizes filing procedures among signatory nations, simplifies the administration of trademark rights and recognizes non-traditional marks such as holograms, sound marks and olfactory marks. It also obliges parties to adopt the antiquated Nice Classification system for grouping lists of wares and services within trademark applications.

The government has taken no position on possibly ratifying the treaties. However, CIPO alleges that Canada’s compliance with the accords will eliminate international isolation resulting from an outdated trademarks regime. Recently CIPO officials conducted webinars to solicit comments from members of the profession. Two main topics dominated the sessions: relaxing the requirement that applicants must use a trademark before obtaining a Canadian registration and the Nice Classification system.

Use

Currently, one must have used a trademark in Canada or abroad for a registration to issue. Under CIPO’s proposed new regime, registration is possible even if the applicant has not used the trademark anywhere. The registrant would then have up to three years to submit a declaration of use. All registrants would file a declaration of use in the year prior to renewal of the registration. Failure to submit a declaration in either circumstance would result in cancellation of the registration.

While this proposal may diminish inequities by requiring declarations of use in Canada by both foreign and Canadian trademark owners, it will also encourage trafficking in trademarks by providing protection, for a period of time, to those who do not ever intend to use the trademark. Costly Federal Court litigation may be necessary to invalidate “nuisance” registrations, since the summary administrative procedure for cancelling registrations based on non-use cannot be engaged until three years post-registration. Further, the current version of the Trademarks Act does not clearly enumerate a false declaration of use as a basis for invalidation. Accordingly, removing the requirement for use prior to registration potentially limits examination and imposes a burden upon trademark owners to police their rights by opposing applications or invalidating registrations.

CIPO’s proposal makes little reference to how the regime will affect trademark enforcement, other than to suggest that registrants would be required to prove use before launching legal proceedings. This statement leads to more questions. Why should holders of legitimate rights be expected to share the burden of a barrier to enforcement designed to prevent abuse by opportunists? What is the venue for proving use and how will this occur?

Classification

The Nice Classification system was developed to standardize how wares and services are described so as to refine applicants’ rights and streamline the trademark search process. Today’s electronic searching options obviate this need. Further, Canada’s legislative requirement that goods and services be defined specifically and in “ordinary commercial terms”, along with the acceptable definitions from the Trademarks Office’s Wares and Services Manual, already delineate the scope of registrations.

CIPO has not finalized the details of implementing the classification system. It will not supersede, however, the legislative requirements of specificity and ordinary commercial terms. Accordingly, adopting a classification requirement will unnecessarily complicate the trademark application process.

Classification presents another specific disadvantage for Canadian applicants who file under the Madrid Protocol. If the applicant defines its wares and services in ordinary commercial terms within the application, it could forfeit rights in other jurisdictions where broader definitions are permitted. The alternative is to incorporate broader definitions within the application as filed and incur the costs and delay of redefining the wares and services during prosecution in Canada.

CIPO has indicated that it is not presently considering a system that charges Canadian Madrid applicants a fee for each class of goods or services applied for (currently applicants pay a single government fee no matter how many goods and services are included in an application). Whether fees will increase in the future is uncertain.

Adopting a classification regime would offer little benefit to Canadians. Why not amend Canada’s Trademarks Act to incorporate provisions reflecting the beneficial aspects of the Singapore Treaty and reject classification?

Next Steps

The recent consultations confirm that CIPO strongly favours adherence by Canada to the Madrid Protocol and the Singapore Treaty. CIPO now intends to prepare a formal proposal. Hopefully CIPO will continue to consult with trademarks practitioners so that the rights of Canadian trademarks owners are fully reflected.

This article originally appeared in The Lawyers Weekly.

This article is for information purposes only and does not constitute legal or professional advice.

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