Trademark and counterfeit law reform in Canada

By Michelle Nelles and Kevin Tuohy, Torys LLP
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Two bills that recently became law in Canada are changing the country’s regulatory landscape around trademark and counterfeit issues. Both bills include amendments intended to bring reform to these areas.

Bill C-31, which became law on 19 June 2014, contains amendments that will lead to significant changes in Canadian trademark law. The amendments are intended to make the registration process under the Trade-marks Act consistent with international treaties (the Singapore Treaty, the Nice Agreement and the Madrid Protocol). However, the bill contemplates substantive changes beyond those required by these treaties. The amendments are not expected to come into effect until 2016 as the government is first drafting regulations to assist with the implementation of the legislation.

The amendments make many changes to the Trade-marks Act. Some highlights include the following.

Michelle Nelles
Michelle Nelles

Elimination of use requirements: Currently, Canadian law requires that a trademark be used somewhere in the world before it can be registered in Canada. The amended legislation will no longer require an applicant to declare use, which may lead to an increase in “paper registrations”, making it more costly and complex to clear marks for use in Canada, and more difficult to assess entitlement between parties. Prior use of a trademark will still govern entitlement, but it may be more difficult to assess, and brand owners may need to be more vigilant in opposing trademark applications.

New classification requirement for goods and services: Descriptions of goods and services in a trademark application will need to be classified according to the international Nice Classification system. This requirement will bring Canada in line with most other industrialized countries, but Canadian applicants will also need to comply with the existing Canadian requirement that goods and services be described in “ordinary commercial terms”.

Elimination of “associated marks”: Currently, Canadian law prohibits the transfer of marks that have been “associated” on the register unless all of the marks are transferred together. This restriction will be removed.

Reduction of term: The registration term for a trademark will be reduced from 15 years to 10 years.

Divisional applications permitted: An applicant will be able to split an application by goods or services after the application is filed. This will allow, for example, the non-problematic portions of an application to proceed to registration more efficiently.

Kevin Tuohy
Kevin Tuohy

Non-traditional trademarks permitted: Three-dimensional shapes, holograms, moving images, sounds, scents, tastes, textures, etc., will be registrable, provided that there is evidence of distinctiveness at the filing date. It will no longer be necessary to furnish such evidence by affidavit or statutory declaration; trademark applications will be specifically examined to ensure that they are distinctive.

Bill C-8, the Combating Counterfeit Products Act (CCPA), became law on 9 December 2014. The CCPA amends both the Copyright Act and the Trade-marks Act by introducing new statutory measures for trademark and copyright owners to combat the growing flow of counterfeit goods in and out of Canada. The CCPA includes provisions that empower Canada Border Services Agency (CBSA) customs officers to search, seize and intercept counterfeit goods at the request of copyright and trademark owners (pursuant to an approved “request for assistance” application). These border enforcement provisions came into force on 1 January 2015.

It should be noted that the CBSA will not investigate any cases in which Canada is not the final destination of allegedly infringing imports. Also, the regime will not apply to “grey market goods”.

Some of the substantive amendments relating to counterfeiting include the following.

New civil causes of action: The CCPA creates new civil causes of action for commercial activity in infringing copies and counterfeit trademarked goods, including the manufacture, distribution and possession of counterfeit goods for the purposes of sale.

New criminal offences: New criminal offences have been introduced under both copyright and trademark law. If convicted of an offence for possessing or dealing in trademark or copyright infringing goods or services, parties are liable for fines of up to C$1 million and/or up to five years’ imprisonment.

Expanded authority to intervene at customs: CBSA officers have new powers to search, seize, and intercept counterfeit goods at the request of copyright and trademark owners (pursuant to a “request for assistance”). This will result in the temporary detention of commercial shipments that may contain counterfeit goods.

More specifically, when a customs officer suspects a potential infringement at the border, samples, information, and even a 10-day detention order can be obtained. During the 10-day period, the trademark or copyright owner may seek a permanent seizure order and other remedies from the court.

Torys LLP is an international business law firm that works with clients who expect the best advice and service. Michelle Nelles is counsel and Kevin Tuohy is an associate at the firm.

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