Canada proposes surprise trademark reforms

A new set of trademark reforms has been proposed by the Canadian government, with new measures to tackle trademark squatting and modernised dispute resolution proceedings set to be introduced.

Bill C-86, also known as the Budget Implementation Act, seeks to implement the country’s IP strategy by reforming Canada’s patent, trademark and copyright laws. Introduced at the end of October, the act has now passed its first and second readings in Canada’s House of Commons and is being reviewed by committee. It is expected to be passed without substantial modification, although the timeframe for its implementation is currently unclear.

Several provisions promise to have significant benefits for brand owners. First, the legislation seeks to crack down on bad-faith actions, especially the issue of trademark squatting – a major problem in Canada, whose current IP system presently makes it difficult to remove rights from squatters who have registered marks that are used or are well-known internationally but not yet in Canada. Bill C-86 introduces bad faith as a new ground for opposing trademark applications and invalidating registered marks.

Similarly, the legislation will make it more difficult for squatters to sue brands by precluding owners of registered marks from obtaining legal remedies for infringement in the first three years after grant, unless the trademark has been used in Canada. These provisions follow – and are probably intended to remedy – the reforms set out in Bill C-31/2014 (due to be implemented at the start of 2019), which otherwise threaten to exacerbate the problem of bad-faith actors by removing the requirement that a mark be in use in order to be registered.

Gowling WLG’s Michael O’Neill told World Trademark Review: “When the changes to the law were introduced in 2014, brand owners and practitioners had many concerns with both the process and content of that bill which many believe made ill-advised and ill-conceived changes to the law. The current bill addresses some of the perceived deficiencies of the 2014 legislation and provides brand owners with some additional tools to protect and enforce their trademark rights.”

The bill also sets out several changes to the nature of contentious proceedings before the trademark registrar. It enables the Canadian IP Office to award costs in oppositions and to grant confidentiality orders protecting sensitive evidence used in non-use cancellations and oppositions. The latter “will be welcome news for brand owners who are often concerned about filing commercially sensitive information with the registrar, which has always been open and available to the public. Under the new law they will be able to shield such information from public view,” said O’Neill.

Moreover, Bill C-86 also introduces a requirement to seek leave from the Federal Court to file new evidence (that was not before the registrar) in appeals of opposition and non-use cancellation proceedings.