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Trademarks and the Federal Government's IP Strategy

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Back in April, the federal government committed $85.3 million over five years “to help Canadian businesses, creators, entrepreneurs and innovators understand, protect and access intellectual property (IP) through a comprehensive IP Strategy.” The thinking is that Canadian businesses, particularly small and medium sized enterprises (SMEs), will invest more in IP if they understand it better, have better access to it and have a fairer more efficient system in which to enforce rights in it – and that the Canadian economy, as a whole will, benefit.

There are three parts to the IP Strategy:

  1. IP awareness, education and advice;
  2. Strategic IP tools for growth; and
  3. IP legislation.

 

While the focus of each prong is on patents and technological innovation, the trademark related initiatives will be key to the strategy’s success. Trademarks are the most commonly owned – and arguably the most underleveraged - of IP assets among small businesses in Canada.

The vast majority of SMEs in Canada own trademarks or have goodwill that can and ought to be leveraged and protected through trademarks. Trademarks are any combination of letters, words, designs, shapes or sounds (or, in the near future, colours, scents and tastes) that a business uses to distinguish its goods or services from those of its competitors in the marketplace.

One of the fundamental goals of trademark law is to incentivize businesses to invest in their reputation, to grow and to endure. The more that a business does to enhance its reputation over time, by marketing better products and services than its competitors, the more valuable become the trademarks that it uses to identify those products and services.  The value of a trademark is, in a very real sense, a measure of a company’s success. Trademark law enables companies to package their success into protectable and leverageable assets that can exist indefinitely. Through use, over time, a trademark can become an SME’s most valuable asset.

The three-pronged IP Strategy includes some positive trademark related initiatives. Promoting awareness of trademarks may lead more SME’s to invest in their long-term reputation and to discover how much trademark protection can increase the value of their business over time. A new College of Patent and Trademark Agents may help increase access to knowledgeable trademark agents across the country. And new measures to expedite IP dispute resolution, particularly in the Federal Court, will make it more cost effective to enforce trademark rights.

Included in the third prong is legislation requiring the owner of a trademark that has been registered for less than three years to prove use of the trademark before enforcing rights in it. This proposal relates to upcoming amendments to the Trademarks Act that remove use of a trademark as a pre-requirement for registration. Many trademark practitioners expressed concern that these amendments will enable trademark “trolls” to register trademarks for the purpose of suing alleged infringers and without any good faith intention of ever using the trademarks themselves. In the first three years of registration, there would be no check on “trolling” since, under existing provisions, a registration can only be cancelled for non-use after three years.  The new legislation will impose such a check.

What is missing from the IP Strategy are measures to accelerate the trademark registration process in Canada where it is currently taking, on average, two years from filing an application to the trademark being allowed for registration. Adding more examiners, making them more accessible (like examining attorneys are in the U.S. where they are reachable by email) and making it easier to respond to issues in the application process would be a start.

Perhaps trademarks can be the focus of the next IP Strategy. Stay tuned!

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