Canadian Trademark Changes - June 17, 2019: How to Protect Your Brand and Save Money

Guest Post: Cynthia Mason, Trademark Lawyer

Trademark registrations are powerful tools for protecting brands, and now is the time to prioritize registering your trademarks in Canada. Canadian trademark law is undergoing a major shift on June 17, 2019, and among the changes are an increase in the fees for trademark registrations, but also new registration requirements that will make it easier to register marks in Canada. The period between now and June 17 is the sweet-spot where you can file a trademark application and get the best of both systems – lower fees and fewer registration requirements.

Increase in Government Fees

One of the changes happening on June 17 is an increase in government trademark registration fees. Currently, the government fees for a Canadian trademark are $250 paid at the time of filing the application, and an additional $200 paid at the time of registration. After June 17, the calculation of government fees will depend on the number of “classes” of goods or services claimed in the application. The classes are determined according to the Nice Classification, which is an internationally accepted system of categorizing goods and services for the purposes of trademark registration. Given the diversity of products and services in the world today, you may be surprised to learn that there are only 45 classes covering all of them.

For many years, Canada has informally indexed trademarks according to the Nice Classification. Beginning June 17, classification in Canadian trademark applications will be mandatory, and the government filing fees will be calculated at $330 for the first class and $100 for each additional class. A final registration fee will no longer be required.

If your trademark is very limited and only covers one or two classes, after June 17 you’ll pay less than under the current fee structure. However, for most applicants, the fees will increase, and in some cases, it will be a significant jump.

Just to give an example of how the new fee structure will affect the cost of a typical trademark application, let’s say you are a nutritionist and you provide nutrition consulting, seminars and workshops on nutrition topics, and you also sell cookbooks, meal plans, food containers, aprons, oven mitts and tea towels, and you are developing a meal planning app. Here is how your trademark application fees are calculated under the existing and new systems:

  Before June 17/19 After June 17/19

Nutrition consulting (Class 44) $250 $330

Seminars and workshops (Class 41) $0 $100

Books and meal plans (Class 16) $0 $100

Aprons (Class 25) $0 $100

Food containers and oven mitts (Class 21) $0 $100

Tea towels (Class 24) $0 $100

Downloadable software app (Class 9) $0 $100

Software as a service (Class 42) $0 $100

Total: $250 $1030

The cost savings for filing a trademark application before June 17 can be significant, particularly for businesses just starting out. You wouldn’t claim only your current inventory of products and services in a trademark application. Your application should include what you currently sell and what you plan to sell within the next five years. This strategy will ensure that your registration is flexible and will continue to protect you as your business grows. Pursuing this strategy will be even easier after June 17, due to another significant change to the registration system.

No Trademark Use Required

The second major change that will impact Canadian brand owners is the elimination of trademark “use” as a prerequisite to registration. Under current rules, a Canadian trademark applicant is required to either claim a date of first trademark use in the application or file a Declaration of Trademark Use in Canada before the registration can issue. This applies in respect of all the goods and services claimed in the application.

After June 17, it will no longer be necessary to claim trademark use, and this will impact Canadian brand owners in two ways.

First, it will streamline (and, presumably, shorten) the application process. Applicants will no longer have to dig around business records to determine the correct date of first “use” for each product or service they sell. Additionally, once the application progresses through examination and publication, it can proceed to registration without the need to start selling all the goods and services claimed.

That’s the positive. Here’s the negative - now anyone can register a trademark without ever having any prior use or intention to use that mark in Canada. Trademark use will ultimately be necessary to enforce and maintain a registration, but the owner of a registration has a legal procedural advantage over unregistered trademark owners. And you shouldn’t underestimate the costs and risks to your business when someone else holds the trademark registration for your brand. It can hamper your ability to enforce your rights, and it can cost you a lot of money to have the registration removed.

We are already seeing an increase in trademark trolls, which are entities filing broad trademark applications covering all 45 classes. These applications will eventually issue to registration and they will serve as expensive obstacles to legitimate brand owners trying to register their trademarks. The new no-use-necessary registration system will also open the door for more defensive trademarks. These are registrations that don’t reflect the owner’s actual use of a trademark, but instead are intended to prevent competitors from registering or using confusing marks. It is expected that these practices will continue to grow, and while there are legal procedures available to expunge registrations for marks that are not in use or that don’t belong to the proper trademark owner, they add costs and a period of business uncertainty.

There are many reasons to register your brands as trademarks (see here for a few of the big ones), and now there are even more reasons to file your applications before June 17, 2019.

Contact us today to discuss how we can help you get ahead of the changing laws by applying to register your trademarks in Canada.

Special Thanks to Cynthia Mason for this guest post!