The Power of Perspectives

The Canadian Bar Association

Kim Covert

‘Use’ requirement for trademark registration doesn’t need fixing

June 22 2017 22 June 2017

 

Amendments  to the Trade-Marks Act made in 2014, despite not being fully implemented yet, have already encouraged squatting and over-claiming, and have resulted in a 75 per cent increase in the number of Canadian applications waiting to be registered, from 40,000 in 2014 to nearly 70,000, the CBA National IP Section says in a letter to Innovation, Science and Economic Development Canada.

“We believe many of these pending applications would be registered, but for the current requirement to file a declaration of use,” the Section says.

When the federal government announced changes to the “use” requirement under the Trade-Marks Act by including them in a 2014 omnibus bill with no prior consultation, the Section wrote that “the proposed amendments will cause such serious problems that we recommend they be removed from Bill C-31 for further consultation.”

Not only was there “no apparent policy reason” for the changes, they would have a negative impact on Canadian business, the Section said.

In 2016, the Section reiterated its concerns about the amendments, saying it recommended “that they be repealed or not be brought into force pending further consultation.”

In January of this year, the Section met with IP policy teams from both ISED and Canadian Heritage to discuss a number of issues, including the changes to the use requirement. In May, Section Chair Kamleh Nicola followed up on those discussions with a letter once more laying out the CBA’s argument against bringing the changes into force.

“We all benefit from a system that is efficient, in harmony with our trading partners, and that reduces barriers to entry and provides effective and fair rights of enforcement,” the letter says. “The CBA IP Section has carefully considered the rationale presented for eliminating the use requirement; however, we remain concerned that any benefits will be greatly outweighed by the costs and burdens that will result from Bill C-31. We recommend further policy development before implementing this fundamental change to our trademark regime.”

Canada’s international treaty obligations do not require dropping use as a precondition for registering a trademark, the U.S. continues to require it, and in Europe dropping the requirement has created cluttering problems, it says.

“There is a range of possible misuse in any trademark system,” the letter says. “At the most egregious end are ‘trolls’ or ‘squatters’ who knowingly appropriate marks that belong to another. … A more prevalent issue arises from entities that register trademarks for a much wider range of products and services than they actually use, or reasonably intend to use,” sometimes as a “deliberate strategy to create obstacles for competitors.”

If the government were to go ahead, however, and remove the use requirement, the Section says the Act should be further revised to provide safeguards, including amending s. 30 to expressly require a bona fide intent to use, and amending ss. 19 and 20 to allow enforcement proceedings only when the mark has been used in Canada.

“The Minister and senior officials at ISED have heard from the CBA IP Section and our counterpart at the American Bar Association, individual lawyers from across Canada, other professional organizations, and chambers of commerce – all raising significant concerns over Bill C-31,” the Section concludes. “We ask that ISED postpone the full implementation of Division 25 of Part 6 of Bill C-31 so that all stakeholders have an opportunity to fully explore trademark policy options that achieve our common goal – an effective and efficient Canadian trademark system.”

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