Service: Trademarks

Words and logo designs tend to steal the show when it comes to what many typically associate with the term “trademark”. What is often underrepresented is that trademarks can be used to interact with consumers beyond their two-dimensional, visual components. In June of 2019, the Canadian Trademarks Act was amended and now includes a slew of non-traditional trademarks, such as three-dimensional shapes, colours in abstract, moving images, modes of packaging goods, smells, tastes, sounds, positions, textures, and holograms.

The expansion of the legal definition of a trademark in Canada, in conjunction with the potential perpetual term of protection, offers brand owners significant incentive to employ a multi-pronged approach in the protection of their products and services. Various unique elements of a product or unique features of consumer experience in the performance of a service may be protected as trademarks. By way of illustration, in practice, this can include the unusual shape of a bottle, the exclusive scent of a store, a catchy jingle, or the texture of a handbag. But like all good things, there is a catch. The Trademarks Act includes certain limitations which restrict the availability of non-traditional trademark protection.

Trademark protection cannot be extended to features which are dictated primarily by utilitarian function, in relation to the associated goods and services (s.12(2) of the Trademarks Act), nor can they unreasonably limit the development of any art or industry (s.18.1 Trademarks Act). For instance, it is unlikely that the taste of mint could be trademarked in association with gum, or a flowery scent trademarked in association with perfume, as these features are dictated by the functional aspect of the respective goods and would unreasonably limit the art and/or industry. On the contrary, the taste of mint in association with lipstick, or a flowery scent in association with stationary would likely not contravene the Trademarks Act. These provisions are also largely intended to remove the possibility of extending perpetual trademark protection to features which would otherwise be protected through a patent. In fact, the Lego® brick was famously the subject of this exact dispute before the Supreme Court of Canada.^[1]

Moreover, at the examination stage, unlike in the case of a traditional trademark, the Canadian Trademarks Office will typically require evidence of distinctiveness of the applied-for non-traditional trademark. This means that the applicant would need to prove that the trademark has amassed sufficient reputation in Canada, to the point where the average Canadian consumer has been adequately educated as to its trademark status. This is often referred to as a “secondary meaning” since the evidence would need to demonstrate that the trademark’s overwhelming reputation causes consumers to dispense of its primary meaning. A classic example is the Coke® bottle. A bottle containing cola (primary meaning) is not specific to a single source, however the Coke® bottle is instantly identifiable, even when stripped of its label, because of the tremendous consumer recognition of that particular bottle shape belonging to Coca-Cola (secondary meaning). As such, it is advisable that a brand owner has several years of use of their non-traditional trademark and compile detailed evidence of the trademark’s reputation prior to formally applying for its registration with the Canadian Trademarks Office.

In creating marketing strategies, brand owners should consider the proprietary potential in thinking “outside the [traditional] box”. For example, in contemplating protecting a unique shape as a trademark, brand owners should consider taking advantage of the monopoly afforded by an industrial design in order to secure exclusivity and reputation in the shape, prior to filing for trademark protection. All things considered, creative branding strategists should venture beyond the conventional two-dimensional eye candy appeal of words and logos, and contemplate trademarks which can be perceived in three dimensions, felt, smelt, tasted or heard.

Despite the potential challenges with acquiring registrations for non-traditional trademarks, our team is accustomed to developing tailored non-traditional trademark strategies designed to properly position brand owners for success. If you are thinking of protecting a non-traditional branding element as a trademark, we would love to chat. MBM offers initial consultations at no charge.

On June 17, 2019, Canada’s new Trademarks Act and Trademarks Regulations came into force. The new Act and Regulations introduced significant changes to Canada’s trademark practice. The implementation of the new Act and Regulations has been challenging and a learning experience for everyone, including trademark owners, practitioners and Canadian Examiners.

We dug deeper into some of the more notable changes to give you a little extra insight:

INCREASED FILING FEES & NICE CLASSIFICATION:

As Canada acceded to the Nice Agreement, Applicants are now required to classify their goods and services according to the Nice Classification system.

The Nice Classification system is an international system, administered by the World Intellectual Property Office (WIPO), for classifying goods and services and is comprised of 45 different classes.

Under Canada’s new trademark regime, trademark filing fees are dependent on the number of classes of goods and services contained in the application.

Applicants must be aware that, unlike in other jurisdictions, a trademark application cannot be filed in multiple classes of goods and services with the intention to re-assess the Nice Classes and associated fees later. The filing fees are based on the number of classes of goods and/or services contained in the application at the time of filing, regardless of whether some of those goods or services are deleted at a later date. For this reason, it is important to carefully assess the goods and services and the Nice classes prior to filing the application to ensure all appropriate fees are paid.

Canada’s new government filing fees are:

• $330 for the first class of goods and/or services; and
• $100 for each additional class of goods and/or services

NO “USE” REQUIREMENT:

Under the new Act, trademark owners are no longer required to use their trademarks in Canada in order to obtain a registration. In this regard, a “date of first use” is no longer required in an application and applicants do not have to file a Declaration of Use attesting to the fact that use of the trademark has occurred in Canada.

Trademark owners should still be aware that use of a trademark will be an important factor in maintaining protection of the trademark in Canada. If a trademark is not being used in Canada by the third anniversary of the registration date, it can be vulnerable to “non-use cancellation” proceedings.

While the removal of the “use” requirement has simplified the application process, MBM recommends filing for and using your trademark as soon as possible to protect your business and your brand! Trademark owners should also closely monitor the marketplace for any third-party use to proactively safeguard against trademark trolls seeking to register brands that do not belong to them.

REGISTRATION FEES:

Under the new Act, trademark owners are no longer required to pay a government registration fee to obtain registration of the trademark. However, trademark owners should be aware that registration fees must still be paid on applications that were filed prior to June 17, 2019.

RENEWALS:

Under the new Act, a trademark will be valid for a period of 10 years (previously 15 years). Similar to filing fees, the Trademarks Office is now charging renewal fees on a per class basis.

Canada’s new renewal fees are:

• $400 for the first class of goods and/or services; and
• $125 for each additional class of goods and/or services.

In addition to increased renewal fees, there is also now a strict renewal window wherein owners can renew their trademarks. The new renewal window is six-months prior to and six-months after the renewal deadline.

Additionally, trademark owners should be aware that any trademarks registered prior to the coming into force of the new Act will require that the goods and services be classified according to the Nice Classification system.

For any registrations that do not have the goods and services classified according to the Nice Classification system, MBM recommends filing a request to classify the goods and/or services as soon as possible to facilitate the renewal payment process.

If goods and services are not classified prior to paying the renewal fee, the Trademarks Office will issue a notice pursuant to Subsection 44.1(1) of the Act, setting out the requirement to group and class the goods and services and if the request is not filed, the Trademarks Office will issue a second notice stating that the registration may be expunged if the goods and services are not furnished within the set timeframe.

NON-TRADITIONAL TRADEMARKS:

Under the new Act, trademark owners can file “non-traditional” trademarks. “Non-traditional” trademarks include: sounds, moving images, holograms, scents, tastes, colour, three-dimensional shapes, textures, modes of packaging goods and positioning of a sign.

Upon a review of the Canadian Trademarks online database, it appears that many brand owners are taking advantage of the ability to file “non-traditional” trademarks, with over 300 “non-traditional” trademarks filed between June 17, 2019 and March 24, 2020.

DIVIDING AND MERGING TRADEMARK APPLICATIONS:

Canada’s new Act allows trademark owners to divide their trademark applications. A divisional application can be filed in order to expedite the registration of the trademark for any goods and services that have not received any objections.

Additionally, owners also now have the ability to merge their trademarks. The new Act states that if a trademark that was previously divided proceeds to registration, this trademark may be merged with the other registration(s) that originated from the initial application.

INHERENT DISTINCTIVENESS:

Under the new Act, one of the most significant changes to the examination of trademarks is that the Registrar now has the ability to refuse a trademark on the ground that it is not inherently distinctive.

While Section 2 of the Act defines “distinctiveness” in relation to a trademark, there is no statutory definition for “not inherently distinctive”. However, the Canadian Trademarks Examination Manual (TEM) has some guidelines with respect to inherent distinctiveness and when a trademark can be refused because it is not inherently distinctive. Some examples of trademarks listed in the TEM that are considered to be not inherently distinctive include:

• Trademarks which are primarily geographic locations, names, or surnames;
• Trademarks that consist of one- or two-letters or numbers;
• Trademarks that consist of a design common to the trade, unless it is depicted in a special or fanciful manner (i.e. a design of grapes on a vine would not be registrable for use in association with wine);
• Trademarks that are the names of colours in relation to goods that would typically be that colour (i.e. WHITE would not be registrable for use in association with toothpaste);
• Trademarks that are clearly descriptive in English or French (i.e. FURNITURE STORE/MAGASIN DE MEUBLES would not be registrable in association with the retail sale of furniture);
• Trademarks that consist of laudatory words and phrases (i.e. WONDERFUL, WORLD’S BEST, ULTIMATE); and
• Trademarks that serve only to provide general information about the goods or services (i.e. FRAGILE would not be registrable for use in association with labels to be affixed to packages).

Since the new Act came into force, many Examiners are raising objections that, in their preliminary view, trademarks are not inherently distinctive.  The majority of these objections are generally being raised on the basis that the trademark consists of ordinary or generic words and other traders should be able to use these words in the ordinary course of their business.

When issuing a not inherently distinctive objection, Examiners are required to provide evidence to support their objection that the trademark is not inherently distinctive. The evidence provided by the Examiner must be in relation to the goods and services and must be within Canada. In this regard, some issues that are being brought up between practitioners and Examiners is that the trademarks are not always being taken into consideration with the associated goods and services and the Examiner’s evidence is not always within Canada.

Further, while several Examiners are raising objections that trademarks are not inherently distinctive, it may be possible to overcome the objection by either: (1) arguing that the trademark is inherently distinctive (or at least has some degree of inherent distinctiveness); or (2) filing affidavit evidence that the trademark had acquired distinctiveness at the time of filing the application in Canada.

Trademarks can acquire distinctiveness through significant use of the trademark in Canada. When a trademark is said to have acquired distinctiveness it is said to have acquired a secondary meaning and leaves a distinctive impression in the minds of consumers, when considered in association with the goods and/or services. In other words, to establish that the trademark has acquired distinctiveness, the evidence must show that the Canadian public would strongly associate the trademark with the particular goods and services and not any other possible meaning of the word.

At this time, it is difficult to predict when or if an objection that the trademark is not inherently distinctive will be raised, as it appears that this ground of refusal is being interpreted differently. We do note that the Canadian Intellectual Property Office (CIPO) has been in open discussions with trademark practitioners and the Intellectual Property Institute of Canada (IPIC) regarding the frustration and challenges surrounding these objections. Based on the discussions between CIPO, IPIC and trademark practitioners, we anticipate that within the next 1-2 years, there will be some case law, clarification and fine-tuning of the guidelines with respect to these not inherently distinctive objections.

BACKLOG AT CANADIAN TRADEMARKS OFFICE:

Due to the changes in the Act and many systems at the Canadian Trademarks Office, there is a longer than usual delay in the examination of trademark applications. Currently, it is taking between 17 and 22 months to receive a first action from the Trademarks Office. We understand from the Trademarks Office that they are in the process of hiring several new Examiners and within the next 2-3 years, examination of a trademark application should be more in line with the United States Patent & Trademark Office, approximately 7-10 months to receive a first action.

 

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On January 17, 2020, the Canadian Trademarks Office issued amendments to several Trademark practices. The amendments affect the following:

• Extensions of time in Examination: The Trademarks Office will no longer grant extensions of time unless the Applicant demonstrates exceptional circumstances that would justify the extension.

• Divisional Applications: The Trademarks Office has not yet set up a dedicated e-service for filing divisional applications. As such, the Office has clarified that to file a divisional, an Applicant may either: (1) file an amended application outlining the goods/services to be included in the divisional application; or (2) file the divisional by way of a paper request.

• Transitional Provisions regarding Nice Classification: The Guide to Transitional Provisions has been amended to reflect that notices under44.1(1) of the Trademarks Act will generally only be sent after the renewal of a registration for which the goods/services have not been properly grouped according to the classes of the Nice Classification system.

• Renewals: The Trademarks Office has provided clarification on the procedure for classifying the goods or services according to the classes of the Nice Classification system when renewing a trademark registration.

• Temporary Appointment of Trademark Agent or Associate Trademark Agent: Trademark owners will now have the ability to appoint a temporary Canadian Trademark Agent for the purposes of grouping the goods or services according to the Nice Classification system.

 

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