• Businesses Doing Business in Canada—or Planning to—Should File Trademark Applications Now
  • May 10, 2016 | Author: Jeffrey G. Sheldon
  • Law Firm: Leech Tishman - Pasadena Office
  • Recent Canadian legislation regarding registration of trademarks could cause problems for businesses and brand owners. Bill C-31, an amendment to Canada’s Trademarks Act, removes the requirement of use to obtain a trademark registration. While removing the requirement may simplify the registration process, it also poses a threat from “trademark squatters” or “trademark trolls.”

    A trademark squatter is an individual who applies to register a trademark that is already used by a brand owner in another country, although the squatter has no intent to use the mark. By doing so, the squatter blocks the brand owner from registering the mark for its own use, and can force the brand owner to negotiate with the squatter for acquisition of the mark. With Canada’s new legislation, such a registration by a squatter could block a company from use of its own mark in Canada for at least three years, at which time the squatting registration can be cancelled for non-use.

    Leech Tishman has seen the squatter problem in many countries, including China and South American countries. The problem may soon extend to Canada.

    Canada currently has a “use” based trademark system, which requires applicants to formally claim prior use of the mark in Canada, file a declaration confirming use of the mark in Canada, or to have used the trademark in another country. Such a system discourages trademark squatters, because it ties registration to use of the mark, and squatters have no intention of using the trademark.

    However, this situation will change in light of the new legislation. While there are options for businesses and brand owners, including opposing a squatter’s application or seeking to expunge the registration based on the owner’s prior use of the mark, such courses of action may be lengthy and costly.

    In conclusion, if you are doing business in Canada, or plan to, we recommend filing now to protect your mark and avoid the squatter problem in Canada.