Bill C-86 Update

Enacted through Bill C-86, the Budget Implementation Act, 2018, No. 2 makes changes to the patent, trademark, and copyright regimes, including the creation of a regulatory college for patent and trademark agents.[1] This snIP/IT highlights several consequential amendments, and notes where they are not yet in force.

Patents

Written demands and aggrievements

The new Patent Act, s. 76.2, enables regulations to mandate requirements for written demands respecting patent rights.[2] Anyone receiving a non-compliant demand, or anyone aggrieved by a third party receiving a non-compliant demand, now has a cause of action. The Federal Court may grant the full range of relief, including exemplary damages and injunctions. This provision was added to stifle perceived abuse by non-practising entities (so-called patent trolls).

While no regulations enabled by this provision are yet in force, the equivalent UK legislation may provide hints as to what legislators are considering in Canada.[3] Patentees under UK law may communicate to give notice that a patent exists, discover whether or by whom a patent has been infringed, and give notice of patent rights where awareness is relevant to pending litigation. They may not request a person cease commercial activity relating to a product or process, deliver up a product, destroy a product, or undertake anything relating to a product or process.

More insight may be gleaned from the Canadian jurisprudence considering patent demand letters alleged to be false or misleading statements tending to discredit a competitor, under the Trade-marks Act, s. 7(a).[4] The courts differentiate offending demands as threatening, rather than informative:[5]

Informative letters set out a patentee’s rights and provide information that will enable the recipient to understand what may constitute infringement. Threatening letters contain explicit or veiled threats that the recipient will be sued if they do not change a particular course of conduct.

Prosecution history admissibility

Prosecution histories are now admissible in court to rebut a patentee’s representations regarding claim construction.[6] Previously, no extrinsic evidence was admissible for claim construction purposes. See our snIP/IT on this amendment here.

Experimental purpose exception

Any experimentation relating to the subject-matter of a patent is not infringement.[7] Formerly, this exception was limited to non-commercial purposes. Commercial entities may now rely on this exception.

Standard-essential patents

Patent rights are transferable. However, for standard-essential patents, any transferee is bound by licensing obligations binding the transferor.[8] Standard-essential patents are those patents claiming inventions necessary to comply with technical standards.

Prior users’ rights

The exception to infringement for prior users has been broadened.[9] Prior use includes otherwise infringing acts, as well as preparations for infringing acts. The prior use must have been in good faith, without having arisen only because of knowledge obtained from the patent applicant. This prior use right is transferable if carried out by a business. Further provisions clarify use or sale of an article, and use of a service, under this provision.

Trademarks

Bill C-86 is part of a larger suite of amendments changing Canadian trademark law in 2019. As of March 17, 2019, Canada acceded to the Singapore Treaty, Madrid Protocol, and Nice Agreement, which will lead to major changes with regard to prosecution practices under Canadian law. In line with these treaties, the Trade-marks Act will be amended to broaden registrable marks to include non-traditional “signs” or “combinations of signs” like colours, textures, scents, holograms and moving images, to name just a few non-traditional marks, so long as they have grown distinctive in Canada over time. Those changes come into force on June 17, 2019, and will be the subject of a forthcoming snIP/IT.

New ground of invalidity and opposition

Defendants in trademark infringement proceedings may now allege registration invalidity owing to bad faith.[10] Bad faith will also be a ground of opposition as of a day yet to be fixed.[11]

Proof of use to be required to enforce registration in first three years

A trademark registration less than three years old may not be asserted in court without evidence of use in Canada, or exceptional excuses for non-use, but this requirement comes into force on a day yet to be fixed.[12] This provision appears to be intended to address criticisms that other revisions to the “use” requirements under the Trade-marks Act would give rise to squatting and over-claiming of rights in Canada.

Official marks

Official marks are those badges, crests, emblems, or marks adopted or used by public authorities. Amendments will clarify that prohibitions against using or registering official marks will not apply in respect of an entity that is not a public authority or no longer exists. The Registrar will be able to strike official mark rights. These amendments come into force on a day yet to be fixed.[13] These provisions address concerns that, once public notice has been given with respect to the adoption and use of an official mark, the mark becomes “hardy and virtually unexpungeable”,[14] leading to blockage of valid trademarks that could only be resolved through court proceedings.

Procedure before the Registrar

In Trademark Opposition Board proceedings, the Registrar will be empowered to make confidentiality orders, costs awards, and case management orders. Leave of the Federal Court will be required before adducing evidence on appeal not considered by the Registrar, significantly changing the “two kicks at the can” evidentiary model employed for decades in Canada. The Registrar will be able to deem an objection or opposition to be in default and withdrawn, if the default is not remedied after notice. These amendments are not yet in force.[15]

Copyright

The notice-and-notice regime now expressly prohibits notices containing an offer to settle and demand for payment or for personal information.[16] This regime allows copyright owners to give notice of alleged infringement via Internet service providers without needing the infringer’s identity. Copyright owners may still identify their copyrighted works, and communicate how, when, and where the works were allegedly copied.

College of Patent Agents and Trademark Agents

The new College of Patent Agents and Trade-mark Agents Act establishes the namesake regulatory college.[17] The act provides for licensure, investigations, discipline, and offences for falsely holding oneself out as a patent agent or trademark agent. The regime is not yet fully in force.[18]

 

[1] SC 2018, c 27.

[2] RSC 1985, c P-4.

[3] See Patents Act 1977 (UK), ss 70, 70A, 70B.

[4] RSC 1985, c T-13.

[5] Excalibre Oil Tools Ltd v Advantage Products Inc, 2016 FC 1279 at para 282.

[6] Patent Act, RSC 1985, c P-4, s 53.1.

[7] Patent Act, RSC 1985, c P-4, s 53.3(1).

[8] Patent Act, RSC 1985, c P-4, s 52.1.

[9] Patent Act, RSC 1985, c P-4, s 56.

[10] Trade-marks Act, RSC 1985, c T-13, s 18(1)(e).

[11] See Budget Implementation Act, 2018, No. 2, SC 2018, c 27, ss 220, 242(3), citing Economic Action Plan 2014 Act, No. 1, SC 2014, c 20, s 368(1) (coming into force on a day to be fixed by order of the Governor in Council).

[12] See Budget Implementation Act, 2018, No. 2, SC 2018, c 27, ss 225, 242(2), citing Economic Action Plan 2014 Act, No. 1, SC 2014, c 20, s 368(1) (coming into force on a day to be fixed by order of the Governor in Council).

[13] See Budget Implementation Act, 2018, No. 2, SC 2018, c 27, ss 215-16, 242(2), citing Economic Action Plan 2014 Act, No. 1, SC 2014, c 20, s 368(1) (coming into force on a day to be fixed by order of the Governor in Council).

[14] See e.g. TCC Holdings Inc v Families as Support Teams Society, 2014 FC 830 at para 20.

[15] See Budget Implementation Act, 2018, No. 2, SC 2018, c 27, ss 217, 219, 221-23, 226, 242(2), citing Economic Action Plan 2014 Act, No. 1, SC 2014, c 20, s 368(1) (coming into force on a day to be fixed by order of the Governor in Council).

[16] Copyright Act, RSC 1985, c C-42, s 41.25(3).

[17] College of Patent Agents and Trade-marks Agents Act, SC 2018, c 27, s 247.

[18] See Budget Implementation Act, 2018, No. 2, SC 2018, c 27, s 264.

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