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Intellectual Property

Protect trademark interests ahead of legislative changes

Changes are coming to Canada's trademark laws and holders of proprietary titles should review their registered holdings with counsel, Toronto intellectual property lawyer John Simpson tells AdvocateDaily.com.

He says the amendments, expected next year, will make profound changes to the existing Trade-marks Act and the time to ensure owners' interests are protected is now.

Simpson says it's also vital that companies act now to protect their goods and services trademarks from those trying to wrestle control of commercial names.

"There are sweeping changes to Canadian trademark law that have been proposed and discussed over the last couple of years. We're now closing in on a 'coming into force' date, which the government expects will be early 2019," says Simpson, principal of Shift Law, a boutique firm specializing in IP and new media law.

"Given how significant the changes are and how long it takes trademark owners to plan ahead — and that an application takes 18 months to two years to mature — preparation and adjustments are happening now," Simpson says.

The challenge, however, is to prepare while not knowing exactly how the legislation will be worded, he says.

"At this point, we have a pretty good idea what it is going to be but it's been a fairly long process," Simpson says. However, whenever there are major legislative amendments, he says it can be difficult for lawyers to know exactly how to advise clients until the legislation is unveiled.

"You need to make contingency plans and operate the best you can with the information that is known," Simpson says.

According to the government's Trademark Regulations, the most significant expected changes involve reducing the trademark term to 10 years from 15, and using a trademark in Canada will no longer be a requirement when registering a mark, he says. Currently, not using a trademark could be grounds for it being expunged from the register.

"That's what happens everywhere else in the world, but for some reason, Canada wants to be different or more progressive," Simpson says. "That requirement will be removed in early 2019 and will significantly change how brand owners should operate."

He says current requirements for registration includes a description of the goods and services attached to the trademark. "That's your scope of protection," Simpson says.

But with the expected amendments, "There's nothing limiting the scope — you can name everything under the sun in your application. Without the need to declare the use of the mark, you can get a registration," he says.

Simpson says one catch the government will impose is a fee for each class of goods or services. "If I want to get something for everything under the sun, I would have to pay a large amount of money to do so," he says.

If a brand owner was concerned with protecting the name for a particular class, they would pay for the rights limited within that category. However, a company with deep pockets could control the trademark in all 45 classes for about $300 per category, "so no one else can use that word for anything in commerce," Simpson says.

But there is one safeguard being kept from the current law. Simpson says under the new legislation, while it is possible to get a registration that covers the goods and services not used with the trademark, if it is not used within three years, it could be challenged. This is commonly known as the "use it or lose it" rule.

He warns there is "already suspicious activity in the trademark registry, where some of these so-called trademark trolls are registering trademarks, even well-known marks that are confined to one class, in every other class without any apparent intention to use them."

Simpson suspects the trolls are registering trademarks in classes outside the areas companies do control for possible sale in future. He says it's similar to web domain name squatters who buy the rights to a website URL.

"We're facing a situation similar to that now," he says.

Simpson says trademark practitioners are anticipating "serious issues" for their clients as the new legislation rolls out next year.

"Trademark owners should now identify all marks associated with their business, brand name, product names and service offerings, and apply to register them," he says.

Simpson says the benefits of doing it now are that there is only one fee charged and the properties will be protected for the current 15-year term rather than the new limit of 10 years.

"One of the reasons for the changes is to push the onus of determining trademark ownership away from government and onto individuals,” Simpson says. "Generally speaking, many changes are to reduce the number of bureaucrats and amount of administration required by the Canadian Intellectual Property Office."

It could mean trademark disputes will be resolved through negotiation, mediation and court proceedings, he says. "That is going to be a consequence, no doubt."

Foreign firms in Canada should consider claiming more broadly than they would in other jurisdictions, he adds. "There may be strategic reasons for that, particularly to prevent a troll from doing it first," Simpson says. "That's a real issue."

Part of the impetus for legislative change is to conform to international conventions and it will provide some harmonization with countries who are signatories to the Madrid Protocol, the Nice Agreement and the Singapore Treaty, he says.

Simpson says the treaties bring an international element to trademark protections and prosecutions.

The field is becoming so much more complex and global in scope that trademark owners should consult with legal counsel in enhancing current protections both in Canada and abroad.

"Seeking legal advice around trademarks is more important than ever," Simpson says. "These are interesting times for trademark practitioners and owners in Canada and it's also very challenging times in terms of navigating what's known and what isn’t and figuring out a strategy."

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