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IP strategy is a start but misses the mark on trademarks

Back in April, the federal government committed $85.3 million over five years “to help Canadian businesses, creators, entrepreneurs and innovators understand, protect and access intellectual property through a comprehensive IP Strategy.” The thinking is that Canadian businesses, particularly small and medium sized enterprises, will invest more in IP if they understand it better, have better access to it and have a fairer more efficient system in which to enforce rights in it – and that the Canadian economy, as a whole, will benefit. 

There are three parts to the IP Strategy:

  1. IP awareness, education and advice;
  2. Strategic IP tools for growth; and
  3. IP legislation.

The first part includes: an online suite of seminars, training and information resources delivered by the Canadian Intellectual Property Office to promote IP literacy; funding for IP legal clinics at law schools; and a “SWAT” team of experts inside the federal government to help small and medium-sized businesses develop and retain control of their IP.

The second part includes: new measures to expedite IP dispute resolution; a "patent collective" to “provide patent intelligence and support and obtain access to patents to help remove barriers to firms’ growth.”; and an “IP marketplace” to improve the way companies find and identify existing IP held by government and academia, giving businesses access to groundbreaking research that can be licensed and/or commercialized.

The third part includes: new amendments and regulations relating to patents, trademarks and copyright aimed at curbing abuses of IP that inhibit research and commerce; and creating a new College of Patent and Trademark Agents that will regulate the profession.

This is all sensible. It is also timely, given Canada’s growing expertise in new IP-rich industries like artificial intelligence. But with its focus on patents and stimulating technological innovation, the strategy falls short of the mark on trademarks, the most commonly owned – and arguably the most under-leveraged – IP assets among small businesses in Canada.

There is good reason why patents get so much attention. The exclusive rights conferred by patents provide incentives for innovators to innovate and help them recover their investments in research and development that they might not otherwise make. All of this benefits the economy and society as a whole.

But the vast majority of small and medium-sized businesses in Canada are not engaged in creating innovative and new technology and will never own or apply for a patent. The vast majority of small and medium-sized businesses do, on the other hand, own trademarks or have goodwill that can and ought to be leveraged and protected through trademarks – being any combination of letters, words, designs, shapes or sounds (or, in the near future, colours, scents and tastes) that a business uses to distinguish its goods or services from those of its competitors in the marketplace.

One of fundamental goals of trademark law is to encourage business to invest in their reputation, to grow and to endure. The more that a business does to enhance its reputation over time, by marketing better products and services than its competitors, the more valuable become the trademarks that it uses to identify those products and services. The value of a trademark is, in a very real sense, a measure of a company’s success. Trademark law enables companies to package their success into protect-able and leverage-able assets, which can exist indefinitely. Through use, over time, a trademark can become a small or medium-sized business's most valuable asset.

The three-pronged IP strategy does include some positive trademark-related initiatives. Promoting awareness of trademarks may lead more small and medium-sized businesses to invest in their long-term reputation and to discover how much trademark protection can increase the value of their business over time. A college of patent and trademark agents may increase access to knowledgeable trademark agents across the country. And new measures to expedite IP dispute resolution, particularly in the Federal Court, will make it more cost-effective to enforce trademark rights.

But the strategy falls short on trademarks. Since trademarks are the most widely available form of IP for rewarding small and medium-sized businesses for commercial success, growth and longevity, they ought to be the focus of a national IP strategy purportedly targeted at small and medium-sized businesses. None of the three prongs is focused on increasing those business's investments in trademarks. It is a missed opportunity.

Most disappointing is the absence of measures to accelerate the trademark registration process in Canada where it is currently taking, on average, two years from filing an application to the trademark being registered. Adding more examiners, making them more accessible (by email as are examining attorneys in the U.S.) and making it easier to respond to issues in the application process would be a start.

Also disappointing is the absence of new legislation allowing trademark owners to seek statutory damages for trademark infringement (as copyright owners can do for copyright infringement). This would go a long way to making enforcing their trademark rights more cost effective for small and medium-sized businesses, sparing them the need to prove actual damages which can be prohibitively expensive. A right is of little use if there is no effective remedy for its infringement.

Perhaps trademarks can be the focus of the next IP Strategy. Stay tuned.