IP monitor: Pilot project of Registrar-initiated trademark expungement proceedings

The Canadian Intellectual Property Office (CIPO) has announced that it is commencing a pilot project of Registrar-initiated expungement proceedings under section 45 of the Trademarks Act. The practice notice (Practice notice concerning the pilot project on the Registrar-initiated section 45 expungement proceeding) concerning this pilot project will be in force once the pilot project has commenced in January 2025.

Background

According to the CIPO website (Pilot project on the Registrar-initiated section 45 expungement proceeding), this pilot project will assist CIPO with determining how much “deadwood” is on the Register of Trademarks (the Register), in line with the Registrar’s priority of ensuring that the Register accurately reflects trademarks that are in use, and in association with the goods and services listed in the registration, which is a priority for the Registrar for the following reasons:

• Efficient use of resources: A Register cluttered with “deadwood” is less efficient for businesses seeking to register new trademarks, as objections may be raised during examination based on these trademarks that are not in use.
• Promoting fair competition: A cluttered Register is a problem for businesses trying to create new brands, as trademarks that are registered but not in use may be identified as obstacles during the pre-filing trademark clearance search process.
• Maintaining the integrity of the trademark system: The Register should accurately reflect trademarks in use and the accurate scope of goods and services used in association with those trademarks.

Registrar-initiated expungement proceedings

Beginning in January, the Registrar will issue monthly batches of notices initiating section 45 expungement proceedings (s. 45 Notice(s)) against randomly selected registrations, requiring the owners of registered trademarks that have been on the Register for over three years, to submit evidence of trademark use or, where applicable, justification for non-use based on special circumstances. Registrations will be selected randomly from the following categories:

• registrations based on use;
• registrations based on proposed use for which a declaration of use was filed;
• registrations based on use and registration abroad;
• registrations including multiple bases;
• remaining registrations registered for more than three years.

It is expected that, as a first step, CIPO will issue 100 s. 45 Notices in January and 50 in each of February and March. The number of notices that will be issued from April onward has yet to be determined.

Data collection and consultation (pilot project Phase 2)

The relevant data on the pilot project will be regularly published and, once a statistically significant number of proceedings have concluded, the Trademark Opposition Board (TMOB), in a Phase 2 of the pilot project, will organize consultations and gather feedback from stakeholders on whether Registrar-initiated proceedings should continue and, if so, whether specific types of registrations should be targeted, whether s. 45 Notices should be issued against all or only some of the registered goods/services; and whether the Registrar should perform an investigation before issuing a s. 45 Notice.

Responding to a notice

If a registration is selected for this pilot project, the registered owner will have three months from the date of the s. 45 Notice to either:

• submit evidence, by way of an affidavit or statutory declaration stating that the mark has been used during the three-year period immediately preceding the date of the notice, and providing exhibits that clearly show the trademark was being used in Canada in association with all the goods and/or services listed in the registration;
• submit an affidavit or declaration setting out the special circumstances that justify the absence of use during the relevant period. The Registrar will consider all three of the following criteria in determining whether the evidence provided demonstrates special circumstances excusing the absence of use:
  • the length of time during which the trademark has not been used;
  • whether the reasons for the absence of use were due to circumstances beyond the control of the owner; and
  • whether there exists a serious intention to resume use of the trademark shortly.

If use can only be demonstrated for some of the goods/services, the registration will be limited accordingly. If the registered owner does not provide any evidence in response to the s. 45 Notice, and cannot demonstrate special circumstances, the trademark will be expunged.

A two-month extension of time to respond to the s. 45 Notice may be secured if the Registrar is satisfied that the facts justify the need for an extension and the applicable government fee is paid. However, any further extensions of time will only be granted if the registered owner can demonstrate exceptional circumstances.

Although not required, a registered owner may submit written representations summarizing the evidence filed and/or attend an oral hearing with a hearing officer/member of the TMOB. A decision of the Registrar to maintain, expunge or amend an application may by appealed to the Federal Court.

Steps for trademark owners

Given the increased risk that registrants will have proceedings initiated against their marks and the short window to respond to a s. 45 Notice, Canadian trademark owners will want to ensure that they are in a position to readily assemble evidence of use in Canada of their important marks. Trademark owners may also want to participate in the Phase 2 consultations, given the additional burden that a broad Registrar-initiated system could impose on registrants.

For more information, please contact your IP professional at Norton Rose Fulbright Canada LLP.

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