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Canadian IT Law Association

Trade-Marks and Domain Names

Martin Kratz QC Bennett Jones LLP

Trade-Marks and Domain Names

• 2014 has been a very active year and is setting the stage for dramatic changes for 2015 and beyond 2

Trade-Marks and Domain Names

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Annual Update on IP Issues for Information Technology

Adherence to Trademark treaties Bill C-31 – a New Trademarks Act Quebec Language law and trademarks Expansion of International domain name system Trademark Clearinghouse 3

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Bill C-31 – a New Trademarks Act

CETA – Canada gives an undertaking to implement treaties • Madrid Protocol • Nice Agreement • Singapore Treaty CETA text requires Canada to make reasonable efforts to comply with the Singapore Treaty and to accede to the Madrid

Protocol

C-31 tabled in Parliament January 2014 4

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Madrid

Madrid protocol permits an application to be filed on the basis of a national application • Claim in one or more contracting jurisdictions Madrid would permit a Canadian to file such an application using the Canadian Trademarks Office as the office of origin • Applicant needs a sufficient connection to Canada Canadian Trademarks Office to address completing the application and forward application to International Bureau of the World Intellectual Property Organization (IB) Madrid requires international fee to IB • benefits in the reduction of application and renewal fees -directly proportional to the number of countries where protection is sought 5

Madrid

• • Effect of International registrations in Canada Article 4(1)(a) Madrid Protocol: “From the date of the registration or recordal effected in accordance with the provisions of Articles 3 and 3ter, the protection of the mark in each of the Contracting Parties concerned shall be the same as if the mark had been deposited direct with the Office of that Contracting Party. If no refusal has been notified to the IB in accordance with Article 5(1) and (2) or if a refusal notified in accordance with the said Article has been withdrawn subsequently, the protection of the mark in the Contracting Party concerned shall, as from the said date, be the same as if the mark had been registered by the Office of that Contracting Party.” 6

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Nice Agreement

Provides for a system of international classification of goods and services for the purpose of registering trademarks • Makes applying for trademarks internationally a more streamlined process The trademark offices of the nations signatory to the Nice Agreement agree to employ the designated classification codes in their official documents and publications • Canada will need to identify and employ the classification codes • Hence, applicants and registrants will need to address the classification codes applicable 7

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Nice Agreement

Advantages: • Trademark applications coordinated under a single classification system • Filing is simplified, as the goods and services for a given mark will be classified the same in all countries that have adopted the system • Nice Classification exists in several languages saving applicants work when filing internationally Disadvantages: • Estimated 80% of applications in USPTO face issues of classification • Expect more examination objections on classification issues • Cost and complexity for Canada (and trademark owners) to transition the entire trademark system into a classification system • Risk of errors and inconsistency 8

Nice Agreement

• • • Examples • Goods (1-34) and services (35-45) are allocated among classifications e.g.

• Goods: Class 1 Chemicals used in industry, science and photography, as well as in agriculture, horticulture and forestry; unprocessed artificial resins, unprocessed plastics; manures; fire extinguishing compositions; tempering and soldering preparations; chemical substances for preserving foodstuffs; tanning substances; adhesives used in industry • Services: Class 35 Advertising; business management; business administration; office functions.

Example and explanatory notes: http://www.wipo.int/classifications/nice/en/ Search tool: http://www.en.mktu.info/goods/1/ 9

Nice Agreement

• • Need to assess classification :

For goods:

Finished goods are classified based on their purpose or function. In case if the purpose or function are not specified the finished goods shall be classified by analogy to similar items, indicated in the list of goods and services.

Example: dressed sunflower seeds are attributed to 29 class of the Nice Classification whereas raw sunflower seeds are attributed to 31 class of the Nice Classification.

If functions and purposes are not revealed then it is necessary to follow supplementary criteria, such as — material the item made of or the operating principle of the item.

For services:

It is necessary to classify services on the basis of the direction of the activity specified in the title or explanation to the class.

Consultations, advice, information are attributed to the same classes as services which are the object of the consultation itself, for example: construction is attributed to 37 class, correspondently, consultations on construction projects shall be specified in 37 class.

Per http://www.en.mktu.info/

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Singapore Treaty

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Key elements:

Can divide applications into two or more applications • Beneficial where having a problem with certain goods/services Must classify goods and services in accordance with the Nice Classification Recordal of a License • Presently not required in Canada Term of registration must be 10 years • Canada presently 15 years – reduced rights, increased costs 11

Bill C-31 – a New Trademarks Act

• Bill C-31, The Economic Action Plan 2014, No. 1 • First reading March 28, 2014 • • • • • No public consultation No amendments Royal Assent June 19, 2014 Division 25 amends Trade-marks Act Comes into force with regulations (estimated 2015) • Most dramatic changes to the Trademarks Act since 1950s 12

Bill C-31 – a New Trademarks Act

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Overview

• Key change – no requirement of use to obtain a registration • • • • • • Definitional changes Introduction of Nice Classification Opposition changes Term Divisional applications Does not address 'official marks' issues 13

Bill C-31 – a New Trademarks Act

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The new approach

No longer a requirement to specify a date of first use or other ground to support a trademark application • applicants would no longer need to select filing grounds at the time of filing • applicants no longer be required to provide a date of first use in Canada or a statement of bona fide intent to use, and • a declaration of use would no longer be required prior to obtaining registration for applicants who propose to use their mark Consequence is that an applicant can get registration of a trademark without a requirement to show use • Possible to obtain registration without any use of the mark 14

Bill C-31 – a New Trademarks Act

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Criticism

Strong criticism by bar, trademark practitioners, INTA • No consultations on C-31 • No amendments to C-31 Concern that the use requirements in the Canadian system add to the integrity of the registrations which issue Use requirement has the effect of screening out applicants: • "who are unwilling or unable to make the investment of time, energy and money to commence use • simply want to block competitors from adopting marks, or • wish to traffic in marks rather than use them" Per CBA submission march 15, 2010 15

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Bill C-31 – a New Trademarks Act

Concerns about the new approach

Trademark Register will no longer be a source of reliable information on use Will require more extensive investigations when a client is considering to adopt and use a new mark Anticipated consequences: • • • • Increase in number of trademark filings Registration with wide claims for wares and services not in use Increase in number of oppositions Realistic to see 'bad faith' filings Section 45 proceeding still possible but not until after 3 years of registration 16

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Bill C-31 – a New Trademarks Act

Impacts of the new approach

Adherence to the treaties amendments • facilitate examination within time guidelines set by the Madrid Protocol, and • address filing details set by the Singapore Treaty • Singapore Treaty limits what can be required re use and time frame • But Art. 3(xvi) can permit (a) a requirement of a declaration of intent to use or (b) declaration of actual use Suggestion that the change was promoted by CIPO for administrative efficiencies 17

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Relationship - use & registration of a Trademark

Masterpiece Inc. v. Alavida Lifestyles Inc. 2011 SCC 27, Rothstein J : • • Registration itself does not confer priority of title to a trade-mark. At common law, it was use of a trade-mark that conferred the exclusive right to the trade-mark. While the Trade-marks Act provides additional rights to a registered trade-mark holder than were available at common law, registration is only available once the right to the trade-mark has been established by use. As explained by Ritchie C.J. in Partlo v. Todd (1888), 17 S.C.R. 196, at p. 200: It is not the registration that makes the party proprietor of a trade-mark; he must be proprietor before he can register . . . .

• So do we now see the prospects of trademark rights in gross?

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Bill C-31 – a New Trademarks Act

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Entitlement

Use is not required for an application or registration … but: • Entitlement is still determined by: • Prior use, • Making known in Canada, or • Filing or priority date 19

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Bill C-31 – a New Trademarks Act

New definitions

• Trademark – no longer trade-mark • • Goods, not wares Sign – includes a word, a personal name, a design, a letter, a numeral, a colour, figurative element, a three-dimensional shape, a hologram, a moving image, a mode of packaging goods, a sound, a scent, a taste, a texture, and positioning of a sign • Quite broad, Consistent with Singapore Treaty • Trademark – a sign or combination of signs that is used or proposed to be used by a person for the purpose of distinguishing or so as to distinguish their goods or services from those of others • or a certification mark • No longer a definition for "distinguishing guise" … included in "sign" 20

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Bill C-31 – a New Trademarks Act

Add "Nice Classification"

Goods and services in applications listed according to Nice classification Registrar can require goods and services in registered marks to be listed according to Nice classification Registrar's view is final, no appeal Amend confusion provisions – Section 6 add factor • 'whether or not the goods or services are of the same general class of the Nice Classification' 21

Bill C-31 – a New Trademarks Act

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Distinctiveness

Now distinctiveness must be shown where the Registrar's preliminary view is that the trademark is not inherently distinctive Trademark consists of a colour or combination of colours without delineated contours 3 D shape of any goods, integral packaging for goods Mode of packaging goods Sound, scent, taste, texture Other prescribed signs 22

Bill C-31 – a New Trademarks Act

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Oppositions

Two additional grounds for opposition added: • At the filing date the applicant was not using and did not propose to use the trademark in Canada • At the filing date the applicant was not entitled to use the trademark in Canada 23

Bill C-31 – a New Trademarks Act

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Section 45 Non-Use Cancellation Action

Request can now be limited to specific services or goods Waiting period of 3 years after registration • •

Term

Renewal is now 10 years • •

Limitations

Registration of a trademark does not prevent a person from using any utilitarian function embodied in the trademark 24

Additional Changes

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CETA also requires:

• Canada to provide protection for a large number of items covered by Geographical Indicators • Exceptions seek to limit prejudice to Canadian trademark owners • Canada to enhance efforts to limit trade in counterfeit goods • Consistent with proposals in existing law and in pending Bill C-8 Combating Counterfeit Products Act introduced September 19, 2014 25

And Possibly More

• • • Historical issue of the official marks system • Mihaljevic v British Columbia [1998] 23 CPR (3d) 80, once advertised by a qualifying public authority, are “hardy and virtually unexpungeable” Private Member Bill C-611 introduced in Parliament June 10, 2014 • Geoff Regan, Lib., Halifax West • Defines 'public authority' • Limits to Canadian universities • Provides for opposition procedure after public notice of adoption • Prohibition last for 10 years, but can be renewed • Transitional – all prior official marks prohibition limited to 10 years Status uncertain 26

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Trademark litigation of note

Magasins Best Buy ltee v. Québec, 2014 QCCS 1427 Issue - conflict between the Charter of the French Language and trademark rights Charter of the French Language provides for rules on inclusion of French on public signs and advertisements S. 58 public signs and commercial advertising must be in French • • Another language can be used provided French is markedly prominently Regs requires expressions in languages other than French can be a firm name so long as there is a generic French term accompanying it • Regs exception 25(4) permits a trademark to be used in a language other than French unless a French version has been registered 27

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Trademark litigation of note

Magasins Best Buy ltee v. Québec, 2014 QCCS 1427 Concerned over increasing use of English only trademarks on storefronts Québec language office issues an opinion • Distinguished between business names and trademarks • Noted international commitments • Difficult to challenge use of trademarks for provincial signage purposes Despite opinion Québec language agency begins to compel businesses using English trademarks to 'francize' their business signage and advertising Office changes its interpretation and requires use of a generic French term 28

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Trademark litigation of note

Magasins Best Buy ltee v. Québec, 2014 QCCS 1427 Issue: posting trademark in a language other than French 'as the name of a business' on the storefronts of retail businesses without the addition of a French-language generic term Retail Council of Canada and numerous retailers concerned over position requiring the addition of a French generic term • Best Buy, Costco, GAP, Old Navy, Guess?, Walmart, Toy's "R" Us, Curves Plaintiffs asked Court if a trademark in English used on public signs and advertisements must be accompanied with the generic terms in French, where no French language version of the trademark was filed 29

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Trademark litigation of note

Magasins Best Buy ltee v. Québec, 2014 QCCS 1427 Court reviews efforts of French to withstand the continent wide influence of English, history of language law cases • Notes A-G's argument seeks to equate a business name (which must be French) and Trademarks as the same • Here, none of the Trademarks are the names of the business Plaintiffs come within the exception of S. 58 of the Charter of the French language • Trademarks recognized under the Trademarks Act • No French version was registered • Court allows the holders of trademarks registered in English only to display and advertise these trademarks in Québec without being required to add thereto a generic term or any other descriptive element in the French language 30

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Domain Name impact?

Issue of a website / domain name under Charter of the French Language

• Domain names function as an address to a location on the internet • Common to use a trademark as a second level domain name A business with an establishment in Québec that sells in Québec products that are advertised or sold through a corporate website must provide a French-language translation of its website • The website’s server location and the country code or top-level domain name are not relevant criteria for deciding whether the Charter is applicable • • Principal consideration remains the location of a business establishment Per INTA Bulletin 2008 Vol. 63, No. 10 CIRA permits supports the use of all French characters in .CA domain names 31

Endless Domain Names

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Face of the Internet will forever change

ICANN has permitted a dramatic expansion of the number of generic top level domain names (gTLD) ICANN accepted applications for more than a thousand new gTLDs including: • Generic words like .app, .blog, .computer, .data, .doctor, .eco, .email, .fashion, .food, .green, .hotel, .law, .med, .restaurant, .site, .store, .style, .tech and .website.

• Brands such as .amazon, .android, .apple, calvinklein, .chrysler, .dell, .google, .ibm, .intel, .macys, .mcdonalds, .oracle and .target.

• Over 100 gTLDs in Chinese or Arabic texts, including .[shopping], .[site], .[mobile], and .[online] in Chinese text and .[network/online] in Arabic text. • Transliterations of “.com” in nine scripts, including Arabic, Cyrillic, Devanagari (Indian), Hangul (Korean), Hebrew, Hiragana and Katakana (Japanese), Simplified Chinese, Thai and Traditional Chinese. 32

Endless Domain Names

• • Names and trademark rights: • While multiple instances of an identical trademark can co-exist without confusion • Only one person can get the [trademark].com

Is the solution to permit thousands of choices?

• ICANN: • Communities of interest can be tied to a gTLD • Might make searching easier where gTLD serves as a signpost • Reduce congestion 33

Endless Domain Names

• • Impacts for the IT Sector: • Increase in number of registrations that registrars can sell • Increased revenue from domain name registrations • • Greater flexibility in branding / identification options More security perceived to own a .brand top level domain giving control of all addresses under the gTLD Perspective of Trademark owners: • Expect a substantial increase in cyber squatting • Expect substantial increase in domain name disputes • Perception of 'extortion' by registrars, etc to purchase additional unneeded domain names to avoid them becoming available to others • Increased costs 34

Endless Domain Names

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Expensive process to obtain a gTLD

$185,000 USD Sunrise objection period re rights of trademark owners After objection period trademark owners can still request a Post-Delegation Dispute Resolution Procedure (PDDDRP) 35

Endless Domain Names

• • • • Trademark Clearing House (TMCH) • Only statute, registered or court recognized trademarks, not applications, common law marks • Covers domain names formed solely from the trademark Allows holders of verified trademark rights to • Participate in new gTLD sunrise periods (e.g. like a right of first refusal) • Receive notice if a 3 rd party registers the trademark as a domain name in any new gTLD After sunrise period is 90 day trademark claims period • Can proceed with UDRP or Uniform Rapid Suspension System (URS) case Cost $150 USD per year for recordal with TMCH 36

Endless Domain Names

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Domain Protected Marks List

• gTLD applicants may also offer enhanced rights protection measures • Allows TMCH participants to identify marks for exclusion from the registry Uniform Rapid Suspension System (URS) • Applies to domain names registered in new gTLDs • Same as UDRP but faster – designed for very clear Cybersquatting cases • 500 word complaint limit • Lower filing fee than UDRP • Decision in about 3 weeks • Remedy is to place domain name in an inactive state 37

Endless Domain Names

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Post Delegation

Delegation is the process by which a new gTDL gets assigned to the root zone of the internet New gTLD operators required to execute a registry agreement Bad behaviour by operators is managed under a Post-Delegate Dispute Resolution Procedure (PDDRP)

Trademark PDDRP

Remedy for operator who systematically promotes infringement at the second level 38

Endless Domain Names

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What can Trademark owners do?

Consider if to register your trademarks with the Trademark Clearinghouse Monitor developments – order domain name watch services Take advantage of sunrise periods Consider if to block the trademark in Domain Name Protected Mark Lists Prepare in advance to file UDRP or URS proceedings 39

Questions

Martin Kratz, QC [email protected] 40