Tag Archives: Trademark

Key Estate Planning Considerations for Individuals with IP (Part II: Trademarks)

Key Estate Planning Considerations for Individuals with Intellectual Property (Part II: Trademarks)

This is the second entry in a three-part blog series about the interaction between estates law and intellectual property law. Part I introduced Ontario’s succession law regime, and provided an analysis of estates law vis-à-vis copyright law. Part II will apply this analysis to trademark law. Finally, Part III will examine this area in relation to patent law, as well as provide some concluding thoughts and considerations.

Trademarks

In the previous blog entry in this series, we looked at Ontario’s succession law regime. We also applied this regime to the provisions in the Copyright Act that related to the assignment of one’s copyright after their death. This week, we will take the same approach and apply it to trademark law, which definitely has some considerations that distinguish it from copyright law.

A trademark is a combination of letters, words, sounds or designs that distinguishes one company’s good or services from those of others in the marketplace. A trademark is mostly a business-related form of intellectual property, as it often signifies a company’s goods, services, reputation and brand.

A trademark can be registered in the name of an individual, or in the name of a corporation. As opposed to copyrights, which are more related to works of art and entertainment, trademarks pertain to the operation of a business. As such, it may make more sense for a variety of reasons, including from an estate planning perspective, to register a trademark in the name of a corporation. In doing so, a testator could transfer the shares of that corporation to a beneficiary, and that beneficiary would in effect own the trademark because they control the corporation that is the registered owner of said trademark.

The Trademarks Act is the key piece of legislation in this respect, and it contains multiple provisions relevant for the purposes of estate planning. The first is Subsection 48(1), which allows for the transfer of trademarks, whether registered (in which case CIPO requires a fee  of $100) or unregistered. On that note, as with copyrights, trademarks also do not need to be registered. By the same token, registration of a trademark is prudent, as registering a trademark help more effectively enforce trademark rights against third parties.

Unlike copyrights, however, the ownership of a trademark is not subject to the same types of term limitations. As per Subsection 46(1) of the Trademarks Act, the registration of a trademark is valid for an initial period of 10 years, and can be renewed for any number of subsequent 10-year periods as long as the owner pays the renewal fee ($400 for the first class of goods or services to which the request for renewal relates, and $125 for each additional class). However, the registration must occur within six months after the expiry of the initial or renewal period (although there are certain avenues for extending this timeline).

All that being said, individuals planning their estates should be weary of the common law rule against the partial assignment of trademarks. The Exchequer Court of Canada held in Great Atlantic & Pacific Tea Co. v. Canada (1945), [1945] Ex CR 233, 5 CPR 57 that if a person owns a registered trademark for use in Canada in association with certain goods, they cannot validly assign the trademark unless they also assign the whole of the goodwill of the business carried on by them in Canada in association with such wares. As such, an individual should avoid assigning a trademark to one beneficiary and the business with which said trademark is associated to a different beneficiary.

This principle only further supports the notion that registering a trademark in the name of a corporation and then gifting the shares of a corporation to a beneficiary is an effective way of managing a trademark for the purposes of estate planning. Trademark assignment can be a complicated legal area, so it is best for a testator not to separate the trademark from the business with which it is associated.

Sights and Smells: a New World of Senses in the Field of Non-traditional Trademarks

Introduction

The revised Trademarks Act came into force on June 17, 2019 and brought new waves of changes to the trademark legal landscape in Canada. The Act is now more harmonized with international practices and standard procedures of trademark law by adhering to international treaties and implementing the International Classification of Goods and Services for the Purposes of the Registration of Marks (Nice classification) and the Madrid Protocol for trademark applications with the World Intellectual Property Association, allowing access to more than 100 jurisdictions worldwide in a single application.

Non-Traditional Trademarks

To align Canadian trademark law with international standards, the revised Act now recognizes new non-traditional trademark signs, such as colours, three-dimensional shapes, holograms, moving images, modes of packaging goods, sounds, scents, tastes, textures and the positioning of a sign. This amendment opens the door for businesses in the Canadian market to let creativity run free and protect innovative forms of marketing.

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2019 was “Marked” by Significant Changes to Canada’s Trademarks Legislation

trademark lawyers and attorneys, faksen

After much anticipation, Canada’s new Trademarks Act (the “Act”), came into force on June 17, 2019. The Act introduced significant changes to Canadian trademarks laws which, together with the associated Trademarks Regulations, align Canada’s trademark prosecution and enforcement processes with those of the United States and the European Union, and facilitate Canada’s implementation of international intellectual property treaties.

Some of the key changes under the new Act are outlined below:

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Growth in Chinese Trademark Applications by Canadian Companies Reflects New Business Reality

The Canadian Intellectual Property Office (“CIPO”) recently released its annual report, IP Canada Report 2019, on the statistics and trends regarding the intellectual property (“IP”) system in Canada and use of IP globally by Canadian companies. One interesting development highlighted in the report is that the number of Canadian companies filing trademark applications in China has seen steady growth over the past decade with 3,401 applications in 2018, a 265% increase since 2008.

This is likely due to several factors, including the growth in consumer spending in China; however, Canadian businesses who do not intend to sell their goods within the Chinese market may still want to consider registering their trademarks in China. China has a “first-to-file” trademark system and no “use” requirement, meaning valuable marks can be registered in the names of third parties looking to take advantage of business owners who fail to protect their IP in China. 

Chinese trademark registrations are important for companies that manufacture their goods in China for export to Canada and other jurisdictions. Chinese border services may detain goods due for export, however, on the basis that they infringe the registered Chinese trademark rights in an effort to crack down on counterfeits. In order to avoid these types of disputes, and incurring significant costs in getting the goods out of detention, we recommend that all companies manufacturing goods in China register their trademark with the Chinese National Intellectual Property Administration to allow for the easy export of their goods from China.

If you would like to discuss registering a trademark in China or elsewhere, please contact a member of the Fasken IP team.