What You Need to Know about Canadian Trademark Opposition Proceedings

In Canada, once examination of a trademark is complete, and the trademark is advertised in theTrademarks Journal, anyone is entitled to oppose it on one of seven grounds provided in the Canadian Trademarks Act. Opposition proceedings are often commenced by business owners whose trade name or trademark is similar to the proposed trademark, and who do not want the proposed trademark to be registered because they fear it will be confused with their own and negatively impact their business. For example, if an apple design resembling the famous registered design mark belonging to Apple Inc. were advertised for registration in association with cellphones, Apple may be concerned that use of the mark in respect of cellphones would confuse consumers looking to buy Apple products and thereby divert a fraction of sales to the owner of the similar design.

If you are interested in opposing a proposed trademark or are an applicant whose trademark has recently been opposed, read on.

What is a trademark opposition proceeding?

A trademark opposition is a proceeding commenced before the Registrar of Trademarks to, as the name suggest, oppose and -if successful- prevent the registration of a trademark in Canada.

Importantly, a successful opposition does not prevent the applicant from using its proposed trademark in Canada; such a ban can only be ordered by the courts. The applicant will, however, be denied the benefits of registration, including the right to exclusive use in Canada in respect of the goods and/or services applied-for.

Who can oppose a trademark application?

In Canada, unlike in some other jurisdictions, any third party can oppose the registration of a trademark as long as it bases the opposition on at least one of the seven grounds set out in the Trademarks Act:

1. the application does not conform to the requirements of subsection 30(2);
2. the application for registration was filed in bad faith;
3. the trademark is not registrable;
4. the applicant is not the person entitled to registration of the trademark;
5. the trademark is not distinctive;
6. at the Canadian filing date, the applicant was not using and did not propose to use the trademark in Canada in association with the goods or services specified in the application; and
7. at the Canadian filing date, the applicant was not entitled to use the trademark in Canada in association with the goods or services specified in the application.

A third party cannot oppose an applicant on any other grounds (e.g., that its business would suffer if the proposed trademark is registered). The seven opposition grounds encompass both procedural and substantive issues with the trademark application. Each ground is discussed in further detail below.

1. The application does not conform to the requirements of subsection 30(2)

   Subsection 30(2) of the Trademarks Act sets out requirements for the contents of trademark applications. Oppositions based on this ground involve procedural or technical problems with the trademark application, for example, a failure to list the goods and services associated with the proposed trademark in ordinary commercial terms. This ground of opposition does not involve consideration of subsection 30(3), i.e. whether the goods and services associated with the proposed trademark are grouped according to the classes of the Nice Classification.

2. The application was filed in bad faith

   This is a new ground of opposition added by amendments to the Trademarks Act which came into force June 17, 2019. It may take some time before there are Opposition Board or Federal Court decisions considering this ground; however, it could function similar to bad faith grounds of opposition in other jurisdictions.

3. The trademark is not registrable

   This ground of opposition is based on trademark registrability requirements set out in section 12 of the Trademarks Act. For example, a proposed mark may not be registrable if it is primarily merely the name or surname of a living or recently deceased individual, clearly descriptive or deceptively misdescriptive of the character or quality of the goods or services or the persons employed in their production or of their place of origin, or confusing with a trademark that is already registered.

4. The applicant is not the person entitled to registration of the trademark

   This ground of opposition is based on section 16 of the Trademarks Act, which sets out the persons who are entitled to registration. For example, an opposition may be based on the assertion that the applicant is not entitled to register the proposed trademark because the mark is identical or confusingly similar to an existing trademark or trade-name being used by another party (often the opponent), or to a trademark for which an application was filed earlier.

5. The trademark is not distinctive

   This ground can be used where there is already an identical or confusingly similar trademark being used in Canada by another party (or parties). However, the Registrar will only consider existing trademarks that are listed in association with the particular class of goods or services outlined in the proposed application (e.g., if the proposed trademark is listed in association with footwear, the fact that the same or similar trademark is currently in use for alcoholic beverages will be unlikely to result in a successful challenge on this ground). In exceptional circumstances, such as where the existing trademark is so famous as to transcend traditional classifications, the Registrar may rule a proposed trademark confusingly similar even when it applies to an entirely different class of goods or services. To support an opposition based on this ground, the opponent will have to establish that the confusingly similar trademark is sufficiently known in Canada to negate the distinctiveness of the proposed mark.

   This ground may also be invoked where a trademark is descriptive or generic (uses a term that has developed a trade meaning).

6. At the Canadian filing date, the applicant was not using and did not propose to use the trademark in Canada

   This is a new ground of opposition implemented as part of the Trademarks Act amendments which came into force June 17, 2019. This ground considers whether, as of the Canadian filing date (regardless of priority), the applicant had used or proposed to use the trademark in Canada in association with the goods or services specified in the application.

7. At the Canadian filing date, the applicant was not entitled to use the trademark in Canada

   This is also a new ground of opposition implemented as part of the amendments to the Trademarks Act which came into force June 17, 2019. This ground is assessed as of the Canadian filing date, regardless of priority, and considers whether the applicant was entitled to use the trademark in Canada in association with the goods or services specified in the application.

When commencing a trademark opposition proceeding, it is key to list all grounds of opposition on which you intend to rely, as the Registrar does not have jurisdiction to adjudicate on grounds not pleaded in the statement of opposition. Amending a statement of opposition is permissible, only with leave of the Registrar, so presenting all relevant grounds at the outset is crucial.

The process of opposing a trademark

Pleadings

An opponent has two months from the date a trademark is advertised in the Trademarks Journal to initiate an opposition proceeding. While this deadline can be extended in certain circumstances with leave of the Registrar, initiating an opposition within this timeframe is best. Further, no trademark opposition may be commenced after a notice of allowance has been issued for the trademark in question.

An opponent must submit a statement of opposition to the Trademark Opposition Board along with a $789.43 CAD (as of 2023) fee to commence the proceeding. A statement of opposition without payment of the fee (or a letter stating how and when the fee will be paid) will not be sufficient to commence an opposition proceeding. If the Board deems the grounds of opposition in the statement sufficient, it will deliver a copy of the statement to the applicant within one month (if filed electronically) or within five weeks (if filed in paper format) and open an official opposition proceeding.

After the applicant receives the statement, it can either file a counterstatement (usually a denial of all of the allegations) and serve a copy on the opponent within two months or request an extension. If a counterstatement is not filed and served before the applicable deadline, the trademark application will be deemed abandoned.

Evidence

If a counterstatement is served and filed, the opposition proceeding will move to the evidence stage, where both parties submit evidence to substantiate the claims in their statements in the form of affidavits or statutory declarations. Alternatively, they may file statements indicating that they will not be filing evidence.

The opponent has four months from the time a counterstatement is served and filed to deliver its evidence and serve a copy on the applicant. The applicant has four months from the service of the opponent's evidence to deliver its own evidence and serve a copy on the opponent. The opponent may then file reply evidence within a month and serve a copy on the applicant, but a four-month extension is available with the consent of the applicant. Filing reply evidence is relatively uncommon.

After the parties exchange evidence, they may request cross-examinations. Typically, due to the availability of extensions and the lenient deadlines which apply to the parties at this stage, the evidence stage can take upwards of a year. Either party in the proceeding can initiate a cross-examination by requesting an order that allows them to examine the evidence that was filed by the other party. Cross-examination involves asking the other party's affiants questions about matters raised in their affidavits or testing the credibility and reliability of the affidavit evidence itself. Affiants from outside Canada must be able to appear in Canada if a cross-examination of the relevant evidence is requested.

Argument

After all evidence has been filed, the Registrar then gives the parties notice that they may submit written representations to the Registrar. The opponent has two months from the date of notice to submit written representations and serve a copy on the applicant or choose not to submit written representations (a statement that no written representations will be submitted is optional). The applicant may choose to submit written representations or not to submit any written representations. In the former case, the applicant must submit written representations and serve a copy on the opponent within 2 months of the earlier of (i) the service date of the opponent’s written representations or (ii) the deadline for the opponent to submit and serve written representations.

Both parties are also given the opportunity to make arguments at an oral hearing. Either party may request an oral hearing within one month of the earlier of (i) the service date of the applicant’s written representations or (ii) the applicant’s deadline to submit and serve written representations. However, an oral hearing is optional, and the Board can still render a decision without a hearing.

When all of the above stages are completed, the Board will deliberate and issue a written decision.

Possible outcomes of trademark oppositions

Obtaining a decision from the Board will take at least two years and can sometimes take as long as six to eight years. Because of this, as well as the fact that opposition proceedings can cause both parties to incur significant costs, most disputes settle. If an opponent chooses to settle, they may withdraw the opposition at any time by notifying the Board.

If the parties do not settle, the Board will either permit registration or prohibit the trademark from registering. Neither party can recover their costs associated with the proceeding.

Either party can appeal the decision to the Federal Court, the Federal Court of Appeal and, in rare cases, the Supreme Court of Canada. If new evidence adduced on appeal is material, then the Federal Court will hear the case de novo, or on a standard of “correctness” (i.e., reach its own determination). If there is no new material evidence adduced, then the Federal Court will review questions of law on a correctness standard and questions of fact or mixed fact and law by considering whether the Board made a palpable and overriding error. As a result, there may be a greater chance of a successful appeal where an appellant adduces new material evidence. Nonetheless, it is unusual for new evidence to be submitted; most claims are appealed only on the original grounds. It is much easier to present all relevant evidence during the initial opposition proceeding.

My trademark is getting opposed. What steps can I take?

If you have received a notice from the Trademark Opposition Board that your application is being opposed, your first step is to decide which strategy you prefer to take. If you did not use a trademark agent to file your trademark application, it is best to consult one at this stage. Since a full opposition is costly and lengthy, getting advice at the outset can save significant costs down the road.

You have three options when faced with an opposition:

1. Fight the opposition to secure registration of your trademark

   If the trademark has significant value for your business such that it is worth bearing the cost of fighting the opposition and settling with the opponent seems unlikely, then you can file a counterstatement denying all grounds of opposition (it is key to deny each stated ground) and assemble evidence to support your case.

2. Settle with the opponent

   Settling an opposition may be a good option where you can conceive of limitations to which you would agree in relation to your registration and use of the trademark or where you are not certain that the decision of the Board will be in your favour.

   In most cases, the applicant and opponent settle by entering into a co-existence agreement. By way of the agreement, the applicant agrees only to use the mark in association with specific goods and services and may also agree to reduce the scope of the applied-for trademark registration. If the parties enter into such agreement, abandonment of the application or withdrawal of the opposition will follow.

3. Abandon the trademark application

   Finally, if you have not yet invested very much in building goodwill in your trademark, co-existence with the opponent seems unlikely, and the opposition does not appear (whether owing to the likelihood of success or for any other reason) worth it for you to fight with the opponent based on your likelihood of success or otherwise, you may choose to can abandon the trademark application.

We can help identify the best option for you in view of your particular circumstances. Please contact us for a complimentary and confidential initial telephone appointment to learn more about how we can help.