Beginning in January 2025, the Canadian Trademarks Office (CIPO) will start proactively and unilaterally (i.e., without a request by a third party) sending notices to registered trademark owners requiring them to prove that they recently used their trademarks in Canada, or risk losing their registrations.
In this article, we explain the purpose and scope of this pilot project, as well as its key features that trademark owners need to know in case they receive a notice.
Non-use cancellation proceedings
To maintain registered rights, trademark owners must continually use their trademarks in Canada or risk having their trademark registrations cancelled in non-use cancellation proceedings, also known as “section 45 proceedings” (referring to the relevant provision in the Canadian Trademarks Act).
In a section 45 proceeding, CIPO issues a notice (known as a “Section 45 Notice”) to the owner of a registration that was granted more than three years ago, requiring the owner to file evidence proving that it used its trademark in Canada with each of the goods and services listed in the registration at some point within the three-year period immediately preceding the date of the notice. If the owner does not file evidence, then the registration is summarily cancelled. If the owner does file evidence, then a contentious proceeding ensues.
Previously, only third parties could request that CIPO issue a Section 45 Notice. However, since the sweeping amendments to the Trademarks Act came into force in 2019, CIPO has had the power to issue Section 45 Notices unilaterally. This discretionary power has lain dormant until now, with CIPO’s recent announcement of a pilot project in which it will start proactively and unilaterally issuing Section 45 Notices as early as next month.
Why is CIPO issuing Section 45 Notices of its own initiative?
The purpose of the pilot project, as outlined by CIPO, is to ensure that the Trademarks Register accurately reflects the trademarks used in Canada in association with the listed goods and services—or, more colloquially, to remove “deadwood” from the Register. CIPO has outlined three important reasons to ensure the Register remains accurate:
- 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 which 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.
The pilot project will proceed in two phases.
Phase 1: CIPO will issue a small sampling of Section 45 Notices to owners of randomly selected trademark registrations
In Phase 1, set to begin in January 2025, the Registrar will send out 50-100 Section 45 Notices per month to owners of randomly selected trademark registrations that are more than three years old.
In recognition of this new burden placed on registered trademark owners, CIPO has published resources and created special procedures for CIPO-initiated section 45 proceedings to ensure a more efficient and cost-effective process, including a guide to preparing evidence of trademark use, including a sample affidavit, to assist owners.
In CIPO-initiated section 45 proceedings, trademark owners will be asked to correlate their evidence with each of the goods and services listed in their registrations to facilitate efficient processing by CIPO. In straightforward cases, CIPO may offer to discontinue the section 45 proceeding with the trademark owner’s consent (e.g., where the evidence filed clearly shows that the trademark remains in use).
As with third-party-initiated section 45 proceedings, a trademark owner may appeal CIPO’s decision to the Federal Court if their registration is fully or partially cancelled.
CIPO will gather and publish data on CIPO-initiated section 45 proceedings as the pilot project progresses.
Phase 2: CIPO will organize public consultations to gather feedback on its pilot project
Once CIPO has enough data, it will organize public consultations to gather feedback on whether these types of proceedings should continue and, if so, in what manner. Questions that may arise during these consultations include: whether particular types of registrations should be targeted for CIPO-initiated proceedings and whether CIPO should be obliged to conduct an in-use investigation into a selected registration before it issues a notice of its own initiative.
What is next for trademark owners
This pilot project presents a potentially costly prospect for owners of the randomly selected registrations. That said, the project nonetheless promises to be valuable.
In particular, there is great value for all brand owners in having a “clean” Trademarks Register. For example, removing unused trademarks from the Register should reduce the number of confusion citations, on average, and thus allow for easier, more straightforward examination. Similarly, clearing the “deadwood” from the Register allows trademarks that have fallen into disuse to be repurposed by other traders hoping to launch new brands.
If the pilot project proves to be too burdensome for trademark owners, the consultation period will afford CIPO an opportunity to recalibrate or revise these proceedings, such as by potentially issuing Section 45 Notices of its own initiative only in certain, clearly defined instances.
Ultimately, the best way for trademark owners to protect themselves in light of this new initiative is to use their trademarks in Canada and keep comprehensive records of such use (such as invoices of goods sold and services rendered, photographs of goods bearing their marks and marketing materials advertising their services in association with their marks). If a trademark owner receives a CIPO-initiated Section 45 Notice, they should seek guidance from a registered trademark agent, who can assist the trademark owner in preparing the necessary evidence of use.
For any questions on the new pilot project, on how to best protect your trademark rights or any other trademark-related matters, please contact our Trademarks and Brand Protection Team.
The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.