Intermediate Trademark Info: key concepts
Three types of trademarks. In Canada there are 3 types of trademarks:
Most business trademarks are ordinary marks. Strictly speaking there is no such thing as a ‘service mark’ in Canada: trademarks may apply to either goods or services, although slightly different rules apply especially with respect to “use”.
Confusion. Two trademarks are confusing if use of both trademarks would lead to the inference that the goods or services used in association with the trademarks come from the same source. Detailed information on confusion in Canadian trademarks law can be found here. Similar sounding words for similar products are likely to be confusing; conversely, the exact same trademark can be used with very different products or services if it is unlikely to cause confusion as to the source. For instance, three different companies could own rights to GATOR as a trademark if, for instance, one sold a type of battery cables called GATOR, another sold clothing with GATOR on the label, and the third provided accounting services as GATOR Accounting.
Use. Use is a key concept in trademark law. In Canada, a trademark is used in association with goods if, at the time of any sale of the goods the trademark is clearly marked on the packaging of goods or a bill of lading that accompanies them. A trademark is used in association with services if, at any time when the services are advertised, the trademark is used in performance or advertising of the services. Information on proper marking of trademarks in use in Canada is provided here.
Association. Trademark rights are associated with goods or services from a specific source.
Use and Proposed Use. When an applicant files an application to a Canadian trademark, the applicant may:
a) Already be using the trademark in Canada; or
b) Propose to use the trademark in Canada at a later date.
A trademark cannot be registered until the trademark is used in Canada by the applicant. Accordingly, when a Canadian trademark application is filed on the basis of ‘proposed use’, ultimately (assuming all other hurdles to registration of the trademark are overcome in prosecution) before the trademark can be registered, the applicant must file a Declaration of Use. The date of first use in a Declaration of Use must be after the date that the application based on proposed use was filed (ie. An applicant cannot file based on proposed use, and then later claim use prior to the date of the application)
Fundamental requirements for registration. In order for an applicant to register a mark in Canada as a registered trademark:
a) The trademark must be registrable, and
b) The applicant must be the person entitled to register the trademark.
A Canada trademark application:
a) Will be assessed for compliance with these fundamental requirements by the Trademarks Examiner at the Canadian Intellectual Property Office during the prosecution phase and before the trademark may be registered, and,
b) Likely will be assessed for compliance with these fundamental requirements by the Trademarks Opposition Board if opposition proceedings are commenced by a third party before registration during the prosecution phase.
Examination. Every Canadian trademark application undergoes substantive examination: first as to whether the application is complete and in the proper form (“formalities”), and then once it is, it is given detailed review by a trademark examiner, employed by the Canadian Intellectual Property Office for whether this trademark can be registered at all in Canada, and if so, whether it can be registered by this applicant. As a result, virtually every Canadian trademark application will receive at least one Trademark Examiner’s Report and if the objects raised in this report are not overcome by the applicant, the application will be rejected.
Registrability and Entitlement. Two of the most important fundamental concepts in Canadian trademark law are “registrability” and “entitlement”.
Registrability. A trademark is not registrable in Canada if, at the date that the application is filed:
a) The trademark is deceptively misdescriptive;
b) The trademark is confusingly similar to another trademark used in Canada (or for which they have filed an applied for) previously by another person;
c) The trademark is primarily merely the name of a person living or deceased within the past 30 years.
Entitlement to register. The right to register a registrable trademark belongs to the first person to “use” the trademark in Canada, or, if no one has used it in Canada, the first person to file an application to register the trademark based on proposed use.
Opposition. A Canadian trademark application can be opposed by a third party after examination but before allowance. The Canadian trademark opposition process is complex and analogous to litigation. Learn more about the process of opposing a Canadian trademark application (and overcoming opposition) here.
Renewal. A Canadian trademark registration is valid for 15 years, and can be renewed upon payment of the renewal fee ($350 if paid online) for successive 15 year terms indefinitely. It is not necessary to file any evidence of use in order to renew a Canadian trademark registration, although of course the trademark registration can be cancelled for non-use in accordance with the usual rules.
Cancellation for Non-Use. A Canadian trademark registration may be cancelled if at any time that is 3 years after the date of registration, the owner has not used the trademark within the previous 5 years. Learn more about these administrative ‘cancellation for non-use’ proceedings here.
Cancellation for Improper Registration. A Canadian trademark may be cancelled (technically called “expunged”) if, at the time of registration, the trademark was not registrable or the applicant was not the person entitled to apply to register it. These ‘trademark expungement’ proceedings are conducted in Federal Court.
Enforcement and Infringement. In Canada, virtually all policing of trademarks is performed by the owners. Owners may sue ‘infringers’ for trademark infringement (as well as passing off, and other rights). Usually, infringment actions are commenced in provincial court. Owners must be vigilant to protect their marks. Owners who do not enforce their trademark rights risk losing them all through the doctrine of ‘dilution’.
Licenses. Trademarks are commonly licensed, to permit parties other than the owner to use the trademark in certain circumstances. Most franchise agreements, for instance, include a trademark license. It is extremely important the trademark owner retain some control over the use of the trademark by the licensee by imposing some standards. If not, then the trademark owner will lose trademark rights. This problem frequently affects the status of trademarks owned by one company and used by an ‘affiliate’, or ‘partner’ in Canada (or parts of Canada). If two or more entities use the same trademark, it is imperative that you spell out in writing clearly who owns the trademark and what rights the licensees do and do not have to use it. Licenses of Canadian trademarks can be filed with CIPO, but there is no requirement in Canada to file trademark licenses on the register.
Transfers (buying and selling) of trademarks. Canadian trademarks are a form of intellectual property that can be bought and sold (or more accurately, they are a bundle of rights which can be bought and sold), and pledged as collateral for loans. The agreement and purchase and sale is often accompanied by a stand-alone trademark “assignment”. The advantage of stand-alone assignments is that they constitute a clear, simple document (often referencing only a nominal price like $1.00) that can be filed on the public record easily and without risk of disclosing confidential information. Assignments of Canadian trademarks must be filed with CIPO to effect a proper change of ownership of the Canadian trademark. The assignment must be in writing, signed, and the signature of the assignor must be witnessed. Canadian trademark assignments do not need to be notarized, and do not have to be signed by the assignee.