A little over a month ago, the Canadian Government introduced a bill (Bill C-31, the Economic Action Plan 2014, No. 1) that proposes substantial reforms to Canada’s trademark system. Initially proposed for Canada to uphold its international IP treaty commitments, the proposed trademark reforms in Bill C-31 will potentially impact not only how foreign businesses obtain trademark protection in Canada, it will also influence how such businesses evaluate their global brand protection and marketing strategies.
Although Bill C-31 offers many important trademark reforms that several commentators have provided good insight on (a couple of good analyses are available here and here), the two proposed reforms that will arguably impact foreign businesses the most are: (1) the removal of date of use requirements for trademark registration; and (2) the adoption of the Nice Classification of Goods and Services.
No Date of Use Requirements For Trademark Registration: Bill C-31 will remove current requirements that a Canadian trademark application enclose a date of use in Canada or another country. Currently, Section 30(b)-(d) of the Trade-marks Act requires that trademark applicants provide the date that their trademark has been used in Canada, is intended to be used in Canada, or details of any registration abroad. However, Bill C-31 removes these requirements and only requires that an applicant “use or propose to use, and are entitled to use” a particular trademark in Canada, effectively removing any requirement of providing a specific date of use of a mark in Canada or abroad in a Canadian trademark application.
The removal of such date requirements has benefits and drawbacks for foreign businesses. It would potentially give foreign businesses time advantages and cost benefits in protecting and marketing their brands in Canada and beyond. Without mandating a showing of use or potential use in Canada, foreign businesses will likely be given time after their trademark is registered to determine whether that mark obtains legal protections in other countries without actually having to use the mark in Canada. This helps such businesses to better evaluate the risks of using a particular brand globally without having to exert funds to show actual use of the brand in the Canadian market. From a marketing perspective, removing dates of use requirements would also give foreign businesses time to determine whether their brands develop positive consumer recognition in other markets prior to use in Canada that can help such businesses to better strategize how to market their goods and services on a global scale.
The downside to the removal of date of use requirements is that it may increase trademark trolling. As other commentators have reported, removing date of use or potential use requirements may allow persons or entities to register unused trademarks in order to extort money from legitimate businesses who have not yet registered such marks with the Canadian Intellectual Property Office (CIPO). If Bill C-31 is implemented in its current form, such a scenario has substantial cross-border business implications as a party could register a mark with CIPO for an emerging foreign business not yet operating in Canada and then extort such business for rights to the mark as they expand into Canada. This often happens in trademark jurisdictions where no dates of use registration requirements exist. For example, China does not maintain date of use trademark registration requirements and famous foreign brands such as Apple, Tesla Motors and even hall of fame basketball player Michael Jordan have had their trademarks prior registered by Chinese trademark trolls.
Although it is uncertain whether Canada’s proposed removal of date use requirements under Bill C-31 will result in the same level of trademark trolling as seen in China, there is such a possibility if such reforms are enacted.
Adoption of the Nice Classification: Bill C-31 will also impact foreign businesses through Canada’s adoption of the Nice Classification of Goods and Services (Nice Classification) for trademark registrations. Under Bill C-31’s proposed reforms, a Canadian trademark application will be grouped according to classifications provided under the internationally recognized Nice Classification, instead of Canada’s own existing wares and services classifications. Being one of the last holdouts to adopting the Nice Classification, Canada’s wares and services trademark classification system has made it challenging for foreign businesses to ensure that their Canadian trademark registrations are harmonized from a classification standpoint with registrations of the same mark in other countries that have adopted the Nice Classification. Further, Canada’s reluctance to adopt the Nice Classification has effectively prohibited Canada from adopting the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (Madrid Protocol), which allows a trademark application or registration from a Madrid Protocol country to be submitted for registration in other Madrid Protocol countries.
If Canada adopts the Nice Classification, foreign businesses can better ensure that their trademark registrations in Canada cover similar goods and services as provided in registrations of the same mark in other countries. Further, as Canada’s adoption of the Nice Classification would better allow Canada to implement the Madrid Protocol in the near future, such reforms would give foreign businesses the potential to reduce costs and logistical burdens in registering their marks in Canada and other Madrid Protocol countries. However, it is important to emphasize that Bill C-31 does not effectively implement the Madrid Protocol.
What’s The Takeaway? Bill C-31 proposes several substantial reforms that may benefit foreign businesses, while also posing some potential risks. Although Bill C-31’s proposed reforms are promising, Bill C-31’s reforms have yet to be enacted and it is uncertain whether its proposed reforms will be enacted in the same form described in this positing.
Regardless of whether Bill C-31’s trademark reforms are perceived to be beneficial or problematic, no one can deny that its proposed reforms will dramatically impact Canada’s trademark system for foreign businesses.
Last week, I had the privilege of being a guest writer for Seattle-area based Efinitytech on an article dealing with infringing online advertisements. Although it was focused on combatting trademark infringing online advertising on U.S.-based search engines such as Google, Bing and Yahoo!, as well as U.S. social media sites such as Facebook and Twitter, it contained many of the same considerations trademark owners, and their agents, should consider when combatting infringing online advertisements abroad. However, there are a few additional foreign issues trademark rights holders should consider.
1. Obtain A Trademark Registration. U.S. businesses generally need a U.S. federal trademark registration to submit an advertising complaint to a U.S. online advertising website. A U.S. federal trademark registration establishes a presumption of ownership and exclusive rights in a trademark in the U.S. This gives U.S. search engines and social media sites assurances that a filed advertising complaint is valid.
Additional Foreign Considerations: A trademark registration is also generally required to submit ad complaints in other countries. Many countries do not even recognize a business’ rights in a trademark unless it has registered the mark with the country’s national trademark office. As a result, Google, Bing and Yahoo!, their foreign subsidiaries, as well as many other foreign advertising sites, require that a business have a valid trademark registration in the country where they are filing an online ad complaint. This means that if a rights holder wants to enforce their trademark rights against a foreign ad, they generally have to have a valid trademark registration in that foreign country.
2. Advertising Websites Have Different Trademark Enforcement Reputations. U.S. search engines and social media sites have their own track records for responding to advertising complaints. For example, Bing and Yahoo!’s U.S. sites will often remove an infringing ad upon evidence of a valid U.S. federal trademark registration, while Google U.S.’ site generally declines removing ads infringing a descriptive trademark, even if the mark is federally registered through acquired distinctiveness (aka secondary meaning).
Additional Foreign Considerations: The varied reputations of online advertising sites’ handling of trademark ad complaints are even more disparate at the global level. Many foreign sites have good track records, while others less so. Also, some foreign advertising sites have ad enforcement features that offer benefits beyond those offered on most U.S. websites. For example, China’s leading search engine, Baidu, allows trademark rights holders to register their Chinese registered marks with their representatives in order to prevent others from purchasing infringing ads and ad words on their website. However, like Google, Baidu’s IP enforcement system is imperfect, as it has been criticized in the past for failing to stop the sale of ad words to fraudulent advertisers.
3. Multiple Ad Complaints May Need To Be Filed. Trademark rights holders may need to submit multiple complaints against an infringer before an infringer’s ad appears removed. This can be due to the ineffectiveness of an advertising website complaint system, or more likely because an infringing advertiser has made several ad purchases, requiring the submission of multiple ad complaints in order to effectively remove all of an infringer’s advertisements.
Additional Foreign Considerations: None. Additional complaints may need to be filed for foreign trademark ad complaints as well.
4. Consider The Ramifications Of Filing An Online Complaint. Lastly, submitting an online ad complaint may impact an infringing advertiser’s online reputation as well as the trademark rights holder. Based on these ramifications, trademark rights holders should consider reaching out to alleged infringers, either directly or through an attorney, to see if the disputed ad can be removed amicably.
Additional Foreign Considerations: The consequences of filing online trademark ad complaints abroad is as significant, or even more so, then doing so in the U.S. As I have previously highlighted, countries maintain different beliefs and perceptions towards the legal rights that should be given to trademarks and other forms of IP. In particular, several important and emerging foreign markets such as Canada, Chile and New Zealand disagree with forceful online IP enforcement, as seen in their current rejection of copyright website takedowns. This means that submitting online trademark ad complaints may have similar or even more negative reactions in a business’ particular industry (and among the public) abroad than at home. Based on these circumstances, businesses should feel even more inclined to first reach out to foreign infringing advertisers before they submit online ad complaints.
What’s The Takeaway? As combatting infringing online advertisements has many of the same challenges and considerations in the U.S. as abroad, businesses wishing to protect their brands abroad need to identify the countries where they have or may have significant business and develop strategies to protect against online ad infringement. This requires considering foreign trademark registration, identifying major foreign online advertising websites, and developing processes and procedures to monitor and enforce rights against infringing advertising activity on such websites. Doing so can help businesses to more effectively protect their brands in the foreign markets they wish to grow.
In recent months, there have been a number of stories from around the world about trademark applications, registrations and uses that have been critically questioned, and in some cases rejected, based on their offensive cultural or historical meaning.
Here are just a few stories that I have come across in the past couple of months. They highlight important country-specific cultural and historical sensitivities businesses should take into consideration when deciding how to brand, and register their trademarks abroad.
- The U.S. football team the Washington Redskins have been under growing pressure from Native American organizations, media and sport commentators, and even comments from President Obama, that their team name be changed, and their trademark registrations in that name cancelled, based on the team name’s insensitive characterization of Native Americans (FYI, The National Congress of American Indians came up with some model logos that give a unique and appropriate juxtaposition to show the degrading nature of Native American sport team names).
- Closer to my home, the Portland, Oregon-based Asian-American rock band THE SLANTS were refused trademark registration of their band name by the U.S. Trademark Trial and Appeal Board based on the name being a “derogatory reference to people of Asian descent.”
Similar trends are also happening around the world.
- Last week, the IP blog The IPKat had a great posting about how an Italian citizen living in Norway and an Italian regional wine industry association helped to put enough pressure on a Swedish wine producer selling under the mark MAFIOZO to stop using the mark. Beyond the winemaker’s alleged violation of European Union geographical indication protections, the producer was publicly criticized for using a mark that connotes historical and ongoing Italian organized crime that has resulted in thousands of deaths.
- Lastly, late last month, family members of the deceased Colombian drug lord Pablo Emilio Escobar Gavira submitted a trademark application to Colombia’s Commission of Industry and Commerce to register the full name of the former drug lord in International Class 41. The Commission rejected the application stating that granting the mark would be “immoral and subvert public order.” Although it was only one single trademark application, many world news outlets reported the story, even comparing the attempt to register Mr. Escobar’s name as registering Hitler as a trademark (Coincidently, I recently wrote about how a Thai fast food restaurant tried (and failed) to use such branding).
What’s the Takeaway? All of these recent stories highlight how a country’s historical and cultural sensitivities can not only prevent obtaining legal protections for a trademark, but can also cause additional unforeseen damage through negative public relations and rebranding costs. As a trademark provides a means for the public to identify a business’ goods and services, choosing a word, name or phrase that that is culturally or historically insensitive can almost guarantee negative outcomes, both at home and abroad.
In the context of developing foreign markets for goods and services, understanding and respecting the cultural and historical sensitivities of a particular country is essential to obtaining trademark protection in that country, and more importantly, helping to develop a successful international brand. As with all other aspects of entering into new foreign markets, businesses should do their homework and ensure the mark or marks they wish to register and use abroad are not offensive. Doing so is a relatively inexpensive insurance policy for businesses to prevent complications in expanding abroad.
What does your business do to protect itself from insensitive branding abroad?