New amendments to Trademarks Act will help prevent trademark trolls

Bill C-86, the omnibus legislation introduced by the federal government on October 29, 2018, includes some notable amendments to the Trademarks Act, including amendments that will help prevent trademark “trolls”. The new amendments will complement significant earlier amendments to the Trademark Act that are already expected to come into force in early 2019. These latest amendments are part of the legislative prong of the government’s IP Strategy that was unveiled last spring “to help Canadian businesses, creators, entrepreneurs and innovators understand, protect and access intellectual property (IP)”. We wrote about the trademark aspects of the IP Strategy here. The amendments to the Trademarks Act introduced by Bill C-86 will, among other things:

• prevent owners of registered trademarks from obtaining relief for infringement or depreciation of goodwill in the trademark during the first three years after registration unless the trademark was used in Canada during that period or unless there are special circumstances that excuse the absence of use;
• add “bad faith” as a new ground for opposing or invalidating the registration of a trademark;
• grant the Registrar of Trademarks additional powers, including the power to grant confidentiality orders, award costs, and provide case management deadlines; and
• clarify the existing prohibition against using “official marks” that have been adopted by public authorities.

These are welcome amendments. The first two, in particular, will mitigate the potential negative consequences of the earlier amendments that removed the requirement to use a trademark before registering it. By removing the use requirement, those earlier amendments created an opportunity for trademark “trolls” to register trademarks without any intention to use them in commerce and for the sole purpose of trying to sell them to bona fide users of the same or similar trademarks or to sue them for infringement. The amendment preventing trademark registrants from claiming relief for infringement in the first three years after registration will ensure that a defendant to an infringement lawsuit can “expunge” the registration for non-use under section 45 of the Trademarks Act if the registrant has not yet used the trademark in commerce. Section 45 would not otherwise be available to a defendant if they were sued for infringing a trademark that had been registered for less than three years. The amendment adding “bad faith” as a ground for opposing an application to register a trademark will allow potential opponents to challenge trademark applications covering goods and services that the applicant has no intention of ever using it with. In these ways, the new amendments will address concerns voiced by trademark practitioners like us regarding the earlier amendments and their enabling of trademark “trolls”. We look forward to seeing them proceed through the legislative process and come into force as soon as possible.