Jun 2019 Charity & NFP Law Update
As reported in the Legislation Update above, significant amendments to Canada’s trademark law came into force on June 17, 2019. Most recently, these changes have been outlined in the March 2019, April 2019, and May 2019 Charity & NFP Law Update.
One significant change that was introduced to Canadian trademark law is that trademark applicants are no longer required to have first used the trademark prior to obtaining a registration certificate. The unintended consequence of removing the “use” requirement from Canadian trademark law is the increase in trademark “trolls” and squatters that have pre-emptively filed numerous trademark applications preventing legitimate trademark owners from registering their trademarks. Many within the sector are concerned that these trademark “trolls” will try to extort value for the trademark registrations from the unregistered trademark owners.
Given this increased threat of trademark trolls and squatters, charities and not-for-profits must be vigilant of possible attempts by third parties to usurp their trademark rights. Charities and not-for-profits must therefore actively monitor the marketplace for unauthorized use of their trademarks by conducting periodic Internet searches, subscribing to “trademark watching” services, and encouraging employees and volunteers to be vigilant in watching for unauthorized trademark use. Trademark counsel should be utilized to enforce trademark rights through cease and desist letters and through the new and revised statutory mechanisms introduced to Canada’s Trademarks Act in order to provide trademark owners with enhanced tools to enforce trademark rights, as further described below:
Amendments to Opposition Proceedings – Charities and not-for-profits should be aware that the grounds for initiating an opposition proceeding against a pending trademark application have been expanded to allow parties to oppose a trademark application on the grounds of “bad faith”. Although not defined in the Act, the Canadian Intellectual Property Office has advised that the “bad faith” ground would include a situation where a third party can prove that a trademark has only been registered for the purpose of extorting value from the unregistered trademark owner. As a result, the addition of the bad faith ground may be a helpful tool against the misuse of the registration system and trademark squatting.
Amendments to Non-Use Proceedings – Trademark registrations are vulnerable to expungement from the Trademarks Database if they are not used within three years after the registration date. An expungement proceeding (i.e., non-use proceeding) can be initiated by any third party, at which time the trademark owner is required to furnish evidence of use of the trademark. Prior to the changes to trademark law coming into force, if an expungement proceeding was initiated, trademark owners were required to provide evidence of use of all of the goods and services covered in the registration certificate. These changes to expungement proceedings may be a strategic tool for charities and not-for-profits in overcoming confusion objections raised by the Trademarks Office, as a registrant may be less likely to defend an expungement request for only some of the goods and services, as opposed to a request to expunge a registration in its entirety.
Notification of Third Party Rights – Charities and not-for-profits may now provide a “Notification of Third Party Rights” to the Trademarks Office in an effort to enforce trademark rights. Prior to this mechanism coming into force, third parties would be required to wait until a trademark application was advertised for opposition before initiating any concerns regarding the trademark application. The Canadian Intellectual Property Office has indicated that “[n]otifications of third party rights are an informal way for third parties to bring to the attention of the Registrar information bearing on the registrability of a pending trademark application. This correspondence procedure is limited to three grounds, does not create an inter partes proceeding between the applicant and the third party, and does not replace opposition proceedings.” The three specified grounds that the Trademarks Office will accept third party correspondence in connection with an application are: (i) the trademark is confusing with a registered trademark pursuant to the Trademarks Act; (ii) the applicant is not the person entitled to registration of the trademark in view of the Trademarks Act (i.e., confusion with a pending application); and (iii) registered trademark(s) are being used in the application to describe the goods or services.
The recent legislative amendments provide charities and not-for-profits with additional mechanisms to enforce their trademark rights. Trademark owners should therefore become familiar with these additional mechanisms in order to best protect their assets. Importantly, charities and not-for-profits must also keep in mind that these same countermeasures may be used against them by third parties. As such, charities and not-for-profits should ensure that a proactive approach to trademark management is taken by conducting comprehensive trademark searches prior to launching new brand and registering trademarks with the Canadian Intellectual Property Office on a timely basis.