IP lawyers should prepare for changes to processes before Trademarks Opposition Board

Intellectual property lawyers should prepare for changes that have been introduced to the appeals and opposition process before the Trademarks Opposition Board and before the Federal Court, says Sanjukta Tole, a partner in Dickinson Wright LLP in Toronto.

Opposition based on bad faith alone was added as a ground of opposition before the Trademarks Opposition Board, as of 2018. Lawyers should adopt a wait-and-see approach, as there is no guidance for what constitutes bad faith in this context, Tole says.

Other changes that have yet to be implemented to the process before the Trademarks Opposition Board include:

• Cost consequences felt by the losing party, which will curtail spurious or baseless oppositions and tactics to unnecessarily lengthen proceedings;
• The availability of confidentiality orders, which may allow clients to not have their confidential sales or promo information included on the public record;
• The possibility for case management provisions to be added to the process.

Regarding trademark proceedings before the Federal Court, one can now seek the invalidation of a trademark based on bad faith alone. In Norsteel Building Systems Ltd. v. Toti Holdings Inc., 2021 FC 927, the Federal Court’s reasoning addressed this ground of invalidation. Although there is no current guidance for what will be considered bad faith, Tole notes, lawyers can expect more guidance as time goes on.

Other changes to trademark proceedings before the Federal Court that have not yet been enforced are:

• A new requirement for a trademark owner to demonstrate proof of use if the trademark registration is less than three years old and if the trademark owner is taking action against a third party for trademark infringement or depreciation of goodwill, a change which aims to address the government’s removal of the requirement to demonstrate use upon registration;
• The removal of the ability for parties in a proceeding before the Trademarks Opposition Board to file evidence on appeal to the Federal Court as a matter of right, which means that they now have to seek leave to file such evidence, a change which seeks to require parties to be more serious during opposition proceedings and to curtail the practice of skimping out on evidence on opposition.

The Canadian Intellectual Property Office (CIPO) has said that the implementation of these additional provisions will be subject to consultation with the profession and subject to the requisite notice requirements, Tole says.

“As with other recent amendments to the Trademarks Act, these changes were a surprise to the profession,” she adds. “We would need to look out for news from CIPO about consultations and coming into force dates to see how existing proceedings may be affected, particularly when appeals from oppositions might be affected as there could be some significant consequences to clients (e.g. not being able to file evidence on appeal, etc.).”

Tole predicts that, due to these recently introduced changes, the affected proceedings before the Trademarks Opposition Board and before the Federal Court may involve higher costs and allow for greater flexibility and amicable resolutions.

The amendments may also result in a reduced number of frivolous cases and better-informed decisions from the Trademarks Opposition Board, which may in turn lead to a reduced number of appeals to the Federal Court and a reduced backlog, which would be helpful to lawyers and clients given that there is currently a two-year wait for an oral hearing to be scheduled, Tole says.

According to Tole, IP lawyers and litigators can benefit from being more careful and from adapting their strategy when dealing with trademark oppositions, given that there may be cost consequences to the client and given that appeals to the Federal Court may be limited if leave of the court is required for filing new evidence.

Tole is a trademark agent who is experienced with various matters relating to the Canadian trademark prosecution process, including oppositions, cancellation proceedings and international intellectual property portfolio management.