Business Law, Intellectual Property, Litigation

New trademark act heralds dramatic change, fee increases

Mar 14th, 2019

By Frank M. Schlesinger and Ron Toledano

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This article originally appeared on The Lawyer’s Daily website published by LexisNexis Canada Inc. on March 6, 2019.

 

With June 17, 2019, quickly approaching, the new Canadian Trade-marks Act is about to dramatically change the brand protection landscape.

The good news is that the new legislative changes will actually bring Canada in line with many international treaties and make it easier to simultaneously file international trademark applications. The government also made wise and potentially helpful modifications to expand the definition for trademarks and give applicants the ability to divide applications, which will be of strategic assistance during prosecution and in the event of an opposition.

The questionable news is that Canada is also eliminating the requirement to declare whether and when the trademark was used in Canada. The removal of the use requirement as a prerequisite for registration is huge. At first glance it appears to be positive, given that it removes one of the past burdens of applicants who had filed applications but were unsure as to when they would commence using the mark(s). Moreover, eliminating the “use” requirement will give legitimate brand owners the ability to broaden their rights since they can now register trademarks for goods and services they simply “intend” to use. But what about illegitimate applicants?

Eliminating the use requirement may very well have opened the floodgates to trademark squatters and trolls, similar to the 1990s when domain name speculators rushed to grab top level domain names of well known brands in the hope of ransoming them off. Now, the legitimate owner always has the mechanism of filing an opposition during the 60-day window of advertisement, right? In theory this sounds good, but in reality, most businesspersons are too busy to check the Trademark Journal and don’t want to spend money on a watch service.

That being said, there is no doubt that oppositions will continue to increase. It is also likely that when challenged, these squatters or trolls will claim that they “always intended to use the mark.” However, this is all speculation, and no one yet knows how it will, in fact, play out.

How ever it develops, one thing is certain — companies interested in protecting their marks in Canada must develop defensive techniques that were not really required in the past. Formerly, legitimate owners were protected by the use requirement. No trademark could be registered until it was in use by the applicant or its licensee. The onus was on the trademark applicant.

This easing of the rules for registration appear to give greater access to registration rights. However, such easing does not really result in greater “access to justice,” since the fees payable to the government in order to file a trademark application have the potential to increase tenfold.

Let us explain: Today, it costs $450 in government fees to file a trademark application and pay for a registration certificate. That is $250 to file and $200 for the certificate, whether you have one class, 10 classes or 45 classes in your application. As of June 17, the fees will increase to $330 for a single class plus an extra $100 for each additional class. With a total of 45 classes to choose from, the government fees for a new application can cost as high $4,730! And guess what? Your 15-year period of trademark protection will be reduced to 10 years!

It doesn’t end there. When it comes time to renew the application, the old $350 fee for unlimited classes is gone. Now it will cost $400 for a single class, plus an additional $125 for each additional class.

Again, with 45 classes to choose from, the renewal fees can cost as high as $5,900 every 10 years.

Whether or not all of the changes are a win for the brand owner is still up in the air. While we are confident that the expanded definition for trademarks and the power to divide will be helpful, one thing is for certain: With filing and renewal fees increasing so dramatically, the clear winners with the new Canadian trademark law are the government coffers and those of the World Intellectual Property Organization (WIPO).With June 17, 2019, quickly approaching, the new Canadian Trade-marks Act is about to dramatically change the brand protection landscape.

The good news is that the new legislative changes will actually bring Canada in line with many international treaties and make it easier to simultaneously file international trademark applications. The government also made wise and potentially helpful modifications to expand the definition for trademarks and give applicants the ability to divide applications, which will be of strategic assistance during prosecution and in the event of an opposition.

The questionable news is that Canada is also eliminating the requirement to declare whether and when the trademark was used in Canada. The removal of the use requirement as a prerequisite for registration is huge. At first glance it appears to be positive, given that it removes one of the past burdens of applicants who had filed applications but were unsure as to when they would commence using the mark(s). Moreover, eliminating the “use” requirement will give legitimate brand owners the ability to broaden their rights since they can now register trademarks for goods and services they simply “intend” to use. But what about illegitimate applicants?

Eliminating the use requirement may very well have opened the floodgates to trademark squatters and trolls, similar to the 1990s when domain name speculators rushed to grab top level domain names of well known brands in the hope of ransoming them off. Now, the legitimate owner always has the mechanism of filing an opposition during the 60-day window of advertisement, right? In theory this sounds good, but in reality, most businesspersons are too busy to check the Trademark Journal and don’t want to spend money on a watch service.

That being said, there is no doubt that oppositions will continue to increase. It is also likely that when challenged, these squatters or trolls will claim that they “always intended to use the mark.” However, this is all speculation, and no one yet knows how it will, in fact, play out.

How ever it develops, one thing is certain — companies interested in protecting their marks in Canada must develop defensive techniques that were not really required in the past. Formerly, legitimate owners were protected by the use requirement. No trademark could be registered until it was in use by the applicant or its licensee. The onus was on the trademark applicant.

This easing of the rules for registration appear to give greater access to registration rights. However, such easing does not really result in greater “access to justice,” since the fees payable to the government in order to file a trademark application have the potential to increase tenfold.

Let us explain: Today, it costs $450 in government fees to file a trademark application and pay for a registration certificate. That is $250 to file and $200 for the certificate, whether you have one class, 10 classes or 45 classes in your application. As of June 17, the fees will increase to $330 for a single class plus an extra $100 for each additional class. With a total of 45 classes to choose from, the government fees for a new application can cost as high $4,730! And guess what? Your 15-year period of trademark protection will be reduced to 10 years!

It doesn’t end there. When it comes time to renew the application, the old $350 fee for unlimited classes is gone. Now it will cost $400 for a single class, plus an additional $125 for each additional class.

Again, with 45 classes to choose from, the renewal fees can cost as high as $5,900 every 10 years.

Whether or not all of the changes are a win for the brand owner is still up in the air. While we are confident that the expanded definition for trademarks and the power to divide will be helpful, one thing is for certain: With filing and renewal fees increasing so dramatically, the clear winners with the new Canadian trademark law are the government coffers and those of the World Intellectual Property Organization (WIPO).