Canada’s trademark law is changing, and these changes will be coming into force on June 17, 2019. The sweeping changes which the new law will usher in are the most significant since the 1950’s. We therefore thought it was appropriate to take a deep dive into the new legislation, to briefly outline the main areas of change, and how trademark owners will be impacted.
Part 1 – The Abolition of “Use” as a Basis for Obtaining Trademark Protection
The most important change which is being introduced into Canadian trademark law is that it will no longer be necessary to assert or establish that a trademark is being used in order to obtain a Canadian trademark registration. It is difficult to over-estimate how fundamental this change is. Use has always been the foundation of trademarks under Canadian trademark law.
For example, the Supreme Court of Canada, in Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27, held as follows:
Registration itself does not confer priority of title to a trade-mark. At common law, it was use of a trade-mark that conferred the exclusive right to the trade-mark. While the Trade-marks Act provides additional rights to a registered trade-mark holder than were available at common law, registration is only available once the right to the trade-mark has been established by use. As explained by Ritchie C.J. in Partlo v. Todd (1888), 17 S.C.R. 196, at p. 200:
It is not the registration that makes the party proprietor of a trade-mark; he must be proprietor before he can register.
First, applicants will no longer be required to identify any filing grounds in filing a trademark application in Canada. Second, use will no longer be required before an application issues to registration. The filing process itself has therefore been simplified, but this advantage will be outstripped by the complications and uncertainties which will result.
The change will add new costs to both trademark acquisition and enforcement. The burden will now fall on trademark owners to conduct expensive investigations in order to determine the chances of success in a trademark application or infringement action. More oppositions will be required to protect the interests of trademark owners, and the Register will no longer reflect marketplace realities. Trademark owners are likely to file applications with broad goods and services coverage, which will crowd the Register and create uncertainties.
Increased costs and uncertainty will be experienced in selecting new markets, assessing rights between competing applications, deciding whether to oppose an application, and in the field of business valuations.
The Register will in all likelihood become crowded with marks that do not reflect any business activity. The new system will allow applications to be filed by applicants without a legitimate business interest in the marks, which could lead to a rise in trademark squatters and pirates, with the onus being shifted to trademark owners to litigate to defend their marks.
Accordingly, the new Act shifts the requirements for asserting and proving use away from the application process and toward opposition and cancellation proceedings.
As a result of this significant change, it is important that trademark owners file applications to register their trademarks as early as possible in order to secure prior rights. It is also important to maximize the monitoring of trademark applications so that the owner will be able to oppose conflicting trademark applications.