Changes Heading to Canada's Trade-Marks Act: The looser rules, set to take effect next year, raises concern among businesses.

Author:McKiernan, Michael
Position:Special Trademark Section - Reprint
 
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Businesses are rushing to register trademarks ahead of what one lawyer calls the biggest shakeup to the regime in decades.

Controversial amendments to the Trade-marks Act, expected to take effect in 2019, will eliminate the requirement for applicants to show use of a mark in Canada before they can get registration in this country.

Cynthia Rowden, head of the trademarks practice group at intellectual property law boutique Bereskin & Parr LLP, said the demise of the use requirement is "huge," calling it the most significant change to the law since the 1950s.

"Use has been the basis for trademark rights for basically as long as Canada has been a country, whether through statute or common law," she said. "So taking it out is going to have a big impact on the meaning of registration as well as on the risk analysis for brand owners going forward."

Rowden, who works out of the firm's Toronto office, said companies fear the looser rules could clear the way for trademark trolls to start registering marks as a way to squeeze payments out of brand owners.

And she said there are signs that a predicted flood of defensive applications by legitimate businesses for marks they never intend to use has already begun, well in advance of the changes taking effect, judging by the Canadian Intellectual Property Office's database of all registered trademarks and outstanding applications.

"If you search it, you'll see applications in there where they list 75 pages of goods and services. I don't think they're planning to use the trademark for all of them; in fact, for some applications, it looks like they've just gone through the list of accepted goods and services and filled them all in from A to Z," Rowden said. "The plan seems to be that if they can keep the application pending until 2019, then they can register the trademarks for all goods and services without showing use. It's an attempt to significantly broaden their rights."

She said prospective trademark holders have an additional incentive to claim a wide variety of uses for their marks because of this country's current flat-fee charging for applications.

That is likely to end with the upcoming enacting of the legislative changes, because they will also ensure Canada's compliance with the Nice Agreement, an international accord that standardizes the classification system for goods and services covered by a particular trademark registration.

At that time, it's expected that applicants will have to pay...

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