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Ask the Experts: Changes to trademark laws

Trademark ConceptsBy Chad Finkelstein

Q: What changes have been made to trademark laws in Canada?

Chad says:
As part of the federal government’s omnibus budget legislation in 2014, amendments were introduced to Canada’s Trademarks Act, in part with a view toward harmonizing our intellectual property laws with those of the international community. The changes are anticipated to be enacted by early 2017 and call for sweeping reforms to the ways in which trademarks are applied for and registered by people doing business in Canada.

One of the most important and positive developments is Canada’s ratification of a number of international trademark treaties, which will result in two significant changes. First, a Canadian business will have the opportunity to apply for its trademark in numerous countries at the same time as it files its Canadian one. Currently, a Canadian applicant needs to apply for its trademark first in Canada and then separately in one or several other international jurisdictions. These changes will facilitate a smoother and more consolidated process for applying for a trademark on a multi-jurisdictional basis.

Secondly, Canada will adopt a ‘classification’ system for trademark applications. Applicants will choose their goods and services used in association with their trademarks from a predetermined list of acceptable terms. Currently, Canada has more of 
a ‘free verse’ system for trademark applications, whereby applicants draft descriptions themselves, but often find the road to registration blocked by trademark examiners who send applications back asking that the goods and services be described 
in more ‘ordinary commercial terms.’

Q: How will these changes affect 
franchise systems?

Chad says:
Franchisors with visions of international expansion will welcome changes that make the multi-jurisdictional trademark application and registration process easier, but perhaps the most significant change will be the one mostly likely to have an adverse impact on franchise systems’ trademark portfolios.

As it currently stands, if you want to register your trademark with the Canadian Intellectual Property Office (CIPO), you must actually be using that trademark in association with the goods and services with which you applied. Applicants have three years from the date of filing to establish use of the trademark or their application will be abandoned.

The new laws will eliminate the use requirement, meaning anybody will be able to get a trademark registered—provided there is nothing else out there that is similarly confusing—and they will never have to establish actual use. This will have a potentially damaging effect on trademark owners, since the elimination of the use requirement opens the door for imitators, squatters and other parties acting in bad faith to try to snap up trademarks rightfully owned by others.

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