OWE’s John C. Baum published an article in Law360 on May 8, 2015, What U.S. Brands Should Know About New Canadian Trademark Laws (subscription required) that summarizes significant upcoming changes in Canadian Trademark Law and what the changes mean for companies in the United States The text of the article is set out below.
What U.S. Brands Should Know About Canadian Trademark Law
The U.S. shares a long, and in many ways commercially transparent, border with Canada. In 2014, we exported more to Canada than to China, Japan and South Korea combined. Canada is our largest trading partner and the leading export market for the products of the vast majority of U.S. states. Almost half a million people cross between the two countries every day. Media — including television, radio, print, Internet and social — washes freely back and forth across the border, facilitated by a largely common, albeit differently accented, language. Shared traditions, culture, language and economic systems make for close ties historically: Canadians have fondly referred to the U.S. as their 11th province, and we have, from time to time, returned the favor by calling Canada our 51st state. (But lest we forget, Canadians were among the forces during the War of 1812 that sacked Washington, D.C., burned the White House and the Capitol, but fittingly spared the predecessor of the U.S. Patent and Trademark Office).
The flow of products and services across the border, and in particular from the U.S. to Canada, makes protecting trademarks in Canada key for U.S.-based businesses. For years, strict local use requirements for obtaining trademark registrations in Canada and Canada’s reluctance to subscribe to the Madrid Protocol — a system that facilitates international registration of trademarks to which many major industrial economies, including the U.S., EU, China and Japan, belong — have made it notoriously difficult for U.S. businesses to protect trademark rights in Canada.
That is all changing — starting with the word: the hyphenated title of Canada’s “Trade-marks” law will soon be spelled “Trademarks” law, as in the U.S. Amendments to the “Trade-Marks Act” received “royal assent” last summer from Queen Elizabeth, and Canadian trademark officials are hurriedly developing rules and regulations expected to be operational by late 2016 or early 2017.
The changes impacting U.S. businesses have already started and are mostly positive for U.S. brand owners.
Chief among the changes important to U.S. trademark owners: Canada is dropping all requirements that a mark be in use in Canada (or anywhere for that matter) before it is entitled to registration. Canada is also becoming a Madrid Protocol filing country, adopting the same Nice International Classification system used in the U.S. and virtually every other country worldwide. Traditionally, all Canadian applications contained only a single class covering all goods and services. Trademark applications filed after the new laws are implemented will cover multiple classes. New multiclass applications will cost more to file and will last 10 years, rather than the current 15-year term, before coming due for renewal.
Here are the key changes expected to be implemented by late 2016 or early 2017:Canada will abandon all use requirements for trademark registration.
- Canada will become a Madrid Protocol filing country.
- Canada will adopt the Nice classification system and start charging for multiclass applications.
- Canada will decrease the trademark renewal term from 15 to 10 years.
- Any source identifying sign will be entitled to registration, including scents, textures, tastes, packaging designs, colors, holograms and other nontraditional trademarks.
- Registrations will still be subject to summary expungement under Section 45 for nonuse starting three years after registration.
Applications still pending when the new rules come into force will be allowed to register without any showing of use. Thus, trademark applications filed before the changeover but still pending after implementation will benefit from the best of both the old and new Canadian laws.
One practice pointer for U.S. brand owners: File your long list of otherwise multiclass goods/services now while the filing cost is still low. When the changes come into force, you will get the benefit of multiclass registered protection without having to show any use in Canada for three years after registration.
Here’s what makes this important for a wide range of U.S. brand owners: Canada’s new openness and relaxed registration requirements will likely draw the attention of trademark pirates who will see Canada’s trademark law changes as a source of bounty. Pirates are expected to file applications and obtain registrations for U.S. and other brands, and then hold up legitimate brand owners for payments or other consideration. While dispute mechanisms will be in place to deal with at least some of these situations, those mechanisms will be more expensive and disruptive to operate after the fact than defensive, low-cost filings for important marks would be before the fact. And, because a registration cannot generally be canceled in Canada for nonuse until three years after registration — a process Canadians call “expungement” — owners of less than internationally famous trademarks might have no remedy in Canada for several years after a pirate registers such owners’ valuable brands.