By: Jeffrey G. Sheldon, Esq.

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.

Questions about Bill C-31 and the Canadian trademark process can be directed to Jeffrey G. Sheldon, a Partner in Leech Tishman’s Intellectual Property Practice Group. He is based in the Pasadena office. Jeff can be reached at 626.796.4000 or jsheldon@leechtishman.com.

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Leech Tishman Fuscaldo & Lampl is a full-service law firm dedicated to assisting individuals, businesses, and institutions. Leech Tishman offers legal services in alternative dispute resolution, bankruptcy & creditors’ rights, construction, corporate, employee benefits, employment, energy, environmental, safety & toxic torts, estates & trusts, family law, government relations, immigration, insurance coverage & corporate risk mitigation, intellectual property, internal investigations, international legal matters, litigation, real estate, and taxation. Headquartered in Pittsburgh, PA, Leech Tishman also has offices in Chicago, Los Angeles, New York and Wilmington, DE. For more information call 412.261.1600 or visit us at www.leechtishman.com.