Proposed amendments signal upcoming changes for contentious Canadian trademark proceedings and official marks

The Canadian government has published proposed amendments to Canada’s Trademark Regulations (the Regulations) to improve the efficiency of trademark dispute resolution, discourage undesirable behaviours in contentious trademark proceedings, and introduce a new pathway for challenging official marks.

What you need to know

• The proposed amendments to the Regulations are not yet law and are subject to change. The government is inviting comments on these amendments until July 8, 2024.
• The proposed amendments to the Regulations provide important details and support for implementation of earlier amendments made to the Trademarks Act (the Act) by Canada's adoption of Bill C-86 in 2018 (which are not yet in force). Together, the proposed amendments to the Regulations and the changes to the Act will provide the Registrar of Trademarks (Registrar) with new authority to award costs, issue confidentiality orders, case manage proceedings, and administratively inactivate official marks in certain circumstances.
• The potential for cost awards will be a significant change in Canadian trademark opposition and summary cancellation practice (although costs will only be awarded in certain situations, and they will be capped).
• While we do not yet have an expected implementation date for the changes, organizations relying on official marks should start considering whether their official marks may be vulnerable to inactivation and if it would be beneficial to register their official marks as regular trademarks as well.

Overview of key proposed changes

Cost awards

Currently, the Registrar has no power to award costs in proceedings, meaning there is no deterrent for parties engaging in problematic behaviours that cause undue delay or expense. The changes to the Act will permit the Registrar to award costs in proceedings (subject to the Regulations), aligning the Registrar’s powers with the Federal Court, certain other Canadian tribunals and several intellectual property offices around the world that already have the authority to award costs.

The proposed amendments to the Regulations would permit the Registrar to award costs at the request of a party in an opposition, section 45, or objection proceeding if a party:

• withdraws their request for a hearing less than 14 days before the hearing date, or
• engages in unreasonable conduct which causes undue delay or expense.

For opposition proceedings only, the Registrar would also be permitted to order costs at the request of a party if:

• the trademark application is refused for being filed in bad faith, or
• a divisional application was filed on or after the day on which the original application was advertised.

The proposed amendments to the Regulations prescribe fixed cost awards based on the type of proceeding and the reason for awarding costs (in 2024, the fixed cost awards would range from $1,110 to $10,400). No costs will be awarded if a proceeding is terminated before a final decision is made or for steps taken prior to the amendments coming into force.

Confidentiality orders

At present, all documents disclosed in proceedings before the Registrar are publicly accessible. In practice, this has led to parties filing incomplete evidence to maintain the confidentiality of their commercially sensitive or personal information, while waiting to file full evidence on appeal to the Federal Court if necessary (as the Federal Court permits certain evidence to be filed confidentially).

The changes to the Act will provide the Registrar with the authority to order, at the request of a party, that evidence be kept confidential. This should decrease the time and resources spent by parties, the Registrar and the courts, as parties will be better positioned to put their best foot forward at first instance, and the Registrar will have access to a more complete record when reaching a decision.

The proposed amendments to the Regulations set out the details required in a request for a confidentiality order—specifically, a request for a confidentiality order must include:

• a description of the evidence to be kept confidential,
• a statement that the evidence has not been publicly disclosed,
• reasons to keep the evidence confidential, and
• an indication of whether the other party consents to the request.

Case management

Currently, the Registrar does not have the ability to make case management orders to minimize delays and costs. The proposed amendments to the Regulations would introduce two methods by which the Registrar may case manage a proceeding:

• First, the Registrar would be permitted to make any order or give any direction to deal with a proceeding in an efficient and cost-effective manner as the circumstances and considerations of fairness permit.
• Second, the Registrar would be able to designate certain proceedings as “case-managed proceedings”, which would permit the Registrar to fix or alter the timeline or manner by which a step must be completed (i.e., the Registrar would be able to override deadlines and procedures set by the Act and Regulations). The amendments to the Regulations require the Registrar to consider prescribed factors in its decision to designate a proceeding as a case-managed proceeding, such as the complexity of the proceeding and whether substantial delay has occurred.

Official marks

The amendments to the Act introduce a simple, administrative mechanism whereby the Registrar may, on its own initiative or upon request, inactivate official marks if the mark holder is no longer a “public authority” or has ceased to exist. The proposed amendments to the Regulations set a prescribed fee for requesting inactivation.

Official marks are a special category of marks unique to Canada, which are available only to “public authorities” (i.e., entities with activities that are subject to a significant degree of government control and benefit the public, including certain hospitals, lottery corporations, etc.). Notably, the requirements for meeting “public authority” status have evolved over the years, meaning some entities (including some not-for-profit entities) that were considered “public authorities” in the past may no longer qualify under today’s stricter test.

Official marks are afforded broad protection. In particular, once an official mark is published, no person can use or register a mark identical to or likely to be mistaken for the official mark for any goods or services, without the official mark holder’s consent. Moreover, unlike trademarks, official marks do not require renewal, meaning they can exist indefinitely and block new trademark applications even when the official mark holder has ceased to exist or would no longer be considered a “public authority”.

Currently, the Registrar will withdraw its objection to a trademark application based on an official mark if the trademark applicant provides sufficient evidence that the official mark holder no longer exists, but the Registrar presently has no authority to invalidate an official mark on the basis that the owner is no longer a “public authority”. Rather, if a party wishes to invalidate an official mark, it must currently initiate onerous proceedings at the Federal Court. The more efficient and cost-effective ability to administratively inactivate an official mark before the Trademarks Office, as introduced by the changes to the Act, is therefore considered a positive development by many trademark owners.

What’s next

The proposed amendments to the Regulations are not yet law and remain subject to further changes. Comments on these proposed amendments can be submitted on the Canada Gazette website until July 8, 2024. All comments will be posted on the Canada Gazette website following the end of the consultation period.

In the meantime, organizations relying on official marks should carefully consider whether they still satisfy the requirements for being a “public authority”. If in doubt, these organizations should consider taking steps to register their official marks as regular trademarks.