Put Your Best Foot Forward: New Amendments to Trademark Legislation Require Best Evidence at First Instance (Among Other Changes)

Highlights

Important changes to the Trademarks Act^[1] (the “Act”) and Trademarks Regulations^[2] (the “Regulations”) legislated by the Canadian federal government in Bill C-86 are coming into force on April 1, 2025.

Significantly, when appealing a decision of the Trademarks Opposition Board (“TMOB”) to the Federal Court, parties will no longer have the automatic right to file additional evidence.^[3] The amended provision contemplates that the Federal Court must grant leave to adduce new evidence on appeal.

In addition, Canada’s Registrar of Trademarks (the “Registrar”) will now have the ability to issue confidentiality orders if a party to a proceeding before the TMOB requests that some or all of its evidence be kept confidential to protect sensitive information.^[4] In an effort to promote efficiency in proceedings, the Registrar will also be able to issue orders for costs in response to certain impugned behaviour by parties to proceedings.^[5]

Other changes include a long-awaited mechanism to challenge Canada’s “official marks,” case management discretion for the Registrar and a requirement for use of a trademark in enforcement proceedings before the Federal Court.

A brief overview of the changes and their impact on trademark owners in Canada is set out below.

Procedural Changes Before the Federal Court

The amendments coming into force on April 1, 2025, will introduce two major practice changes in adversarial trademark proceedings before the Federal Court. First, parties will no longer have the automatic right to file additional evidence when appealing a decision of the TMOB to the Federal Court. This means that parties to an opposition, cancellation or objection proceeding must take care to ensure that they put the best available evidence forward at first instance before the TMOB, as they are unlikely to be given any chance to file better or further evidence before the Federal Court.

Second, the changes will introduce a new obligation for the owner of a registered trademark to show use of its trademark in Canada in enforcement proceedings that are commenced within the first three years after registration.^[6] It would be prudent for trademark owners to keep this use requirement in mind when considering how their business plans intersect with trademark registration.

Confidentiality Orders

As of April 1, 2025, a party to an opposition, cancellation or objection proceeding will be able to request to the Registrar that some or all of the evidence it adduces be kept confidential. The ability to obtain a confidentiality order will allow parties to protect proprietary information that is not relevant to the proceeding. This measure is viewed as a limited exception to the general rule that all documents relating to trademark proceedings be made available to the public in keeping with the open court principle.

The request for a confidentiality order must be made prior to the filing of a party’s evidence. The Registrar has indicated it will generally grant the requesting party a one-month extension of time from the date of the confidentiality order to submit and serve their evidence provided that the party specifically requests such an extension prior to or at the same time they request the confidentiality order.

The confidentiality request must contain prescribed content set out in the Regulations,^[7] as well as sufficient information to meet the three-prong test articulated by the Supreme Court of Canada: that (a) court openness poses a serious risk to an important public interest; (b) the order sought is necessary to prevent that risk because reasonably alternative measures will not prevent the risk; and (c) the benefits of the order outweigh its negative effects.^[8]

The Registrar may consider the other party’s consent in assessing the confidentiality request, but the onus lies squarely with the party seeking the order to justify a departure from the usual public evidence requirement. Once granted, the Registrar may amend or revoke the confidentiality order at any time in the proceedings. To the extent possible, the order will remain in place should a decision be appealed to the Federal Court.^[9]

Orders for Costs

The amendments coming into force will also allow parties to an opposition, cancellation or objection proceeding to request that costs be awarded against another party in respect of certain behaviours during the proceeding. The relevant conduct must have occurred after the coming into force of the new changes. The purpose behind the introduction of cost orders is to incentivize efficient advancement of disputes and issues before the Registrar by discouraging certain behaviours. Cost orders are not intended to serve as a form of compensation for a party’s success in the proceeding.

Grounds for seeking an award of costs are limited to the following conduct by a party:

(i) late cancellation of a hearing scheduled after April 15, 2025 (i.e., cancelled less than 14 days before the scheduled date and not seeking a rescheduling);

(ii) unreasonable behaviour (i.e., conduct that causes undue delay or expense in the proceeding such as failing to attend a hearing or cross-examination, breaching a confidentiality order and pursuing a ground of opposition with no reasonable chance of success);

(iii) where an application is successfully opposed on the basis it was filed in bad faith; and

(iv) where, in the context of an opposition proceeding, the application that is the subject of the opposition proceeding is a divisional application filed on or after the day on which the original application is advertised.

As set out in the Regulations, the quantum of costs that can be awarded depends on the basis for the award and generally reflects some multiple of the government fee for commencement of the proceeding. For example, for late cancellation, the liable party will incur costs equal to double the fee for commencement of the proceeding; in the case of a successful bad faith ground of opposition, costs will be awarded in an amount equal to 10 times the fee for commencing the proceeding (i.e., for filing a statement of opposition).

Cost awards will offer trademark owners some relief where an opposite party’s actions have unreasonably delayed a proceeding or driven up costs and will hopefully serve to dissuade such conduct in proceedings before the TMOB. Conversely, owners should be conscious of the timing of cancellations and filings and evaluate the necessity of requests to avoid liability for costs.

Case Management

Starting on April 1, 2025, the Registrar may designate an opposition, cancellation or objection proceeding as a case-managed proceeding, either on its own initiative or at one or both of the parties’ request. Where so designated, the Registrar will be able to make orders addressing procedural matters in an efficient and cost-saving manner. For example, the Registrar may extend deadlines to align multiple related proceedings, hear related files together or consecutively, and hold conference calls with the parties to address issues that could delay the proceeding or scheduling and conduct of hearings.

Case management is intended to apply only in exceptional circumstances. Such circumstances could include, for example, where an application has been divided into multiple applications which have been or will be opposed by the same opponent on the basis of similar grounds; where a substantive amendment is received from the International Bureau to a Protocol application after an opposition is commenced, resulting in the readvertisement of the application; and where a confidentiality order has been made.

Official Marks

An official mark is a mark that is protected under section 9 of the Act, which encompasses marks used by royalty, universities, governments and public authorities in Canada for goods and services. In Canada, the Act grants official marks a special status, preventing any person from adopting as a trademark or otherwise any mark consisting or so nearly resembling as to be likely to be mistaken for the official mark, irrespective of the associated goods and services. The prohibition surrounding an official mark is perpetual with no need for renewal. There is also no obligation for the owner of an official mark to police or enforce its official mark, and it cannot be attacked on the basis of non-distinctiveness or non-use.

Given the unique benefits afforded to official marks, they can stand as a serious obstacle to the use or registration of a proposed trademark. One may only register and use a mark resembling an official mark with the consent of the official mark’s owner, who has no obligation to provide such consent. Previously, the only way to “challenge” the validity of an official mark was in a proceeding before the Federal Court.

The soon-to-be implemented changes will provide a new mechanism to remove official marks from the register. The Registrar will have the authority to remove official marks where the owner is either not a public authority or no longer exists. The Registrar may undertake this cleanup of its own initiative, or it may be requested by a third party for a prescribed fee.

Implications for Owners of Canadian Trademarks

The above-noted changes may significantly impact trademark practice in Canada and owners of Canadian trademarks, in particular those with active proceedings before the Trademarks Opposition Board. Although a transitional grace period will be instituted, it is important that owners proceed in trademark matters with the new provisions in mind to minimize risk as early as possible. On the other hand, owners should also consider availing themselves of new benefits and mechanisms where applicable to their situation. Owners are well-advised to consult with their Canadian trademark agent to discuss the practical impact on their businesses.

The Trademarks & Branding Group at Aird & Berlis LLP is made up of experienced trademark experts available to provide tailored advice and guidance. Please contact the authors or a member of the group if you have any questions or require assistance.

[1] RSC 1985, c. T-13.