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Are You Risking Your Brand Value By Waiting To File A Trademark Application?

Although Canada continues to be a “first to use” rather than a “first to file” jurisdiction in terms of trademark rights, are you risking your brand value by waiting to file a trademark application? As a trademark registration can take anywhere from 18-24 months from the time an application is filed, filing early is imperative for the protection of a company’s trademark and brand value. This is especially now true given that Canada’s trademark law is expected to undergo a historical transformation with the anticipated implementation of the Madrid Protocol and the Nice Agreement scheduled to occur sometime in 2018.

Under current trademark legislation, the benefits of filing an application as early as possible and obtaining a subsequent trademark registration include:

  • National Protection: A registered trademark has national protection even if the mark is used in only one part of Canada. Additionally, it is easier to protect registered marks than unregistered marks.
  • Increased Book Value: A registered mark will typically have a higher amount attributed to its brand value and therefore the valuation of a business generally will increase.
  • Defence to Passing Off: A registered trademark may provide a defense against a passing off action by unregistered common law trademark owners.
  • Procedural Advantages: First to file trademark applications receive important procedural and substantive advantages under the Canadian Trademarks Act, RSC 1985, c T-13.
  • Licensing Opportunities: Although unregistered trademarks can be licensed, registered marks generally receive higher licensing fees than unregistered marks.
  • Ability to File and Register Based on Proposed Use: A party may even file a trademark application based on proposed use, which can be used to block subsequent applications with confusingly similar names.

Filing early may especially be prudent given that the proposed changes under the Madrid Protocol will allow international trademark owners to apply for and obtain a registered Canadian trademark without actually having used their mark in Canada. This is because the requirement of “use” will essentially be eliminated for an application based on ‘proposed use’ as there will no longer be a requirement to file a Declaration of Use. Although the Madrid Protocol is meant to make international trademark applications easier to process among the member countries, it could lead to an influx of international trademark owners seeking protection in Canada without yet having used their marks in Canada, and therefore put common law trademark owners at a disadvantage.

Furthermore, under the Nice Agreement, Canada will implement the international standardized classification system for goods and services associated with trademark applications. In some jurisdictions, such as the United States, there are filing fees per each class of goods and services. Although the Canadian Intellectual Property Office has yet to officially announce if there will be additional filing fees per each class of goods and services under the Nice classification system, the current Canadian trademark application process allows a party to file an application for all the respective goods and services with only one filing fee.

The above-mentioned points are just some of the many advantages of filing a Canadian trademark. Please speak to a Registered Trademark Agent and/or Trademark Lawyer to discuss whether registering a Canadian trademark can benefit your business.

This article was written by Jindra Rajwans, a business lawyer and Registered Trademark Agent based in Toronto, Canada. The information in this article is not intended to be legal advice and is of a general nature. Consult a lawyer for advice for any specific situation. 

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