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Today's economy is driven by innovation, and the proper protection of innovation is vital.
This chapter of Doing Business in Canada provides an overview of Canada's intellectual property regime in five key areas: copyright, industrial designs, patents, trademarks and the enforcement of IP rights.
- Industrial designs
- Enforcement of intellectual property rights
Canada is a signatory of the Berne Convention and has acceded to the principal multilateral treaties seeking to harmonize copyright protection around the world. Accordingly, foreign businesses wishing to do business in Canada will find many similarities between their domestic copyright laws and those in Canada.
Nevertheless, Canadian copyright laws do possess certain subtleties that should be noted. In particular, for any work to be exploited in Canada, it is important to ensure that the chain-of-title has been properly secured in accordance with Canada's Copyright Act.
It is also noteworthy that a significant copyright reform bill was recently passed by Canada's Parliament and introduced into law.
a. What can be protected?
Copyright protection extends in Canada to any original literary, dramatic, musical and artistic work. These terms are given broad definition - for instance, computer programs fall within the concept of "literary" works. Copyright can also subsist in other subject matter, such as sound recordings, broadcast signals and performers' performances.
b. How is copyright protection obtained?
In Canada, copyright arises automatically upon the creation of an original work. An original work is one that has not been copied from another source, and that is otherwise produced through the exercise of non-mechanical skill and judgment.
c. What rights are conferred?
Copyright in relation to a work means the exclusive right in Canada to reproduce, publish and perform in public the work, or any substantial part thereof. The broad concept of reproduction includes many individual rights, depending on the type of work. For example, in the case of a dramatic work, the right of reproduction includes the sole right of converting it into a novel or other non-dramatic work.
Authors of original works enjoy certain moral rights that they can assert. They enjoy a right to be associated with the work, where reasonable in the circumstances as its author by name or pseudonym, and the right to remain anonymous. They also enjoy the right of integrity, meaning that the work cannot be modified or used in association with a product, service, cause or institution to the prejudice of the author's reputation.
d. How long does copyright protection last?
Generally, copyright protection lasts in Canada for 50 years following the death of the author, though the term of protection may vary depending on the circumstances of creation and publication.
Moral rights for a work last for the same amount of time as the copyright protection.
e. Who is the author of the work?
The term "author" is not defined under the Copyright Act, but it is understood to mean the person or persons from whom the original expression originates. For most works in Canada, an "author" must be an actual person, which is true even where a work is made pursuant to a contract.
The concept of "work made for hire" does not exist here. An employee or contractor will remain the work's author even if ownership of copyright comes to vest in the employer or contracting party.
f. Must copyright be registered?
Registration of copyright is optional in Canada and is not necessary to enforce a work in Canadian courts. However, registration does confer certain presumptive benefits in that it will be deemed evidence of copyright subsistence and ownership, as described in the registration. As well, a defendant will not be permitted to assert a lack of knowledge of copyright subsistence in the case of a registered work, and this increases the monetary remedies available to a plaintiff who establishes infringement.
g. Who first owns the copyright?
Generally, the author of a work is the first owner of copyright. An important exception to this principle applies for works created in the course of an employment relationship - where copyright will be first owned by the employer, unless the parties agree otherwise. Where a work is created by joint authors, the copyright will be owned jointly, as determined by the Copyright Act. In Canada, works created under the direction or control of a government department are subject to Crown copyright owned by the government, and are not works deemed to be in the public domain.
h. How is copyright assigned or licensed?
Copyright can be assigned freely in whole or in part, but no assignment is effective in law unless it is in writing and signed by the copyright owner or its duly authorized agent. The same requirements apply to making an effective exclusive licence. Non-exclusive licences and permissions do not need to be in writing, although documenting them is highly recommended.
Moral rights of an author cannot be assigned but may be waived. Notably, assigning the copyright in a work does not, in itself, necessarily constitute a waiver of the moral rights therein.
i. Fair dealing and other exceptions
Canada's Copyright Act provides that a number of specific activities do not infringe copyright. Most of these activities are very specific and apply only in particular, defined circumstances. In contrast, the concept of "fair dealing" has been defined more broadly as a "user right."
In Canada, it is not an infringement of copyright to engage in fair dealing with a work for the purposes of research, private study, criticism, review, education, parody, satire or news reporting - although certain requirements to credit the work's author and source must be met for some of these purposes. These permitted fair-dealing purposes are exhaustive, and conduct must fall within one of the categories mentioned above (and also be fair) for fair dealing to apply.
j. Are there copyright collectives in Canada?
Canada has a long history of administering copyright protection through copyright collectives, and a well-defined statutory regime governing these collectives is now codified in the Copyright Act. There are several copyright collectives operating in Canada, which address many of the copyright rights conferred under the Copyright Act.
k. How does technology fit into the mix?
Recent amendments now in force prohibit the use or sale of technology that circumvents digital locks - also called technological protection measures, or TPMs. Other amendments now in force put in place a "notice and notice" regime for Internet service providers (ISPs) and search engines that, if followed, should limit their exposure to infringement claims.
2. Industrial designs
It is often said that beauty is in the eye of the beholder. While many competitive products share similar functional features, industrial design aspects often set these products apart and serve to attract (or repulse) a customer's eye.
When knock-off producers can't afford to reproduce the functional features or qualities of the genuine article, the visual aspects are relied upon to catch the buyer's attention. To cite another classic cliché, imitation is the sincerest form of flattery - but some look-alikes are just too hard to take. Industrial design protection extends to address these issues and more.
Changes to Canada's Industrial Design Act, Rules and official practices take effect Nov. 5, 2018 and are expected to reduce compliance burdens, provide more options to applicants in Canada and provide a longer term for protection. In addition Canada will allow applicants to file international design applications with WIPO and designate Canada under the Hague Agreement.
a. What is an industrial design?
An industrial design relates to those features of a finished article that appeal to the eye. Such visual features may include aspects of shape, configuration, pattern and ornamentation applied to the finished article, whether alone or in combination. Functional features, materials of manufacture and methods of use are not protectable by industrial design registration. Patent or other protection should instead be considered.
Industrial design and copyright are often confused as providing similar protection. Though they can overlap in scope, often they do not, and proving copying to enforce copyright can be difficult. Copyright generally extends to protect literary, artistic, dramatic or musical works, some examples of which may be incorporated into the design of an article - such as a sculptural shape or an artistic graphical image. Care must be taken when assuming that copyright protection applies, as copyright protection may cease once 50 or more articles incorporating the work are produced.
b. Why register an industrial design?
Unlike some other jurisdictions, Canada does not offer protection for unregistered designs, per se. Other IP rights may apply, such as copyright and/or passing off.
Registering a design with the Canadian Intellectual Property Office (CIPO) assists with a legal claim to ownership, and provides the owner with the right to prevent others from making, importing, selling or renting articles incorporating the registered design or a substantially similar design.
Beginning Nov. 5, 2018, changes to the Industrial Design Act, Rules and official practices should make registration easier than ever.
c. Who can apply to register?
An applicant for a registered design in Canada must be a proprietor (i.e. owner) of the design. While the author of the design may be a proprietor, if the design was made for another person under a contract, that person is the proprietor and proper applicant. If an employee authors a design in the course of employment, it is owned by the employer. Care should be taken to obtain proper ownership of the design - such as by way of written assignment - especially when one hires a company to produce a new design or otherwise purchases a design from someone else.
When more than one author creates a design, joint proprietorship should be investigated.
d. When to file an application
Under Canadian law, early filing is encouraged as only original designs may be protected. If an author has created a design and has made it available to the public - or if it is the subject of a Canadian application - this may prevent other similar designs from being registered. The date of creation or authorship is not important when determining who is entitled to register the design.
While an application does not need to be filed in Canada before the design is made publicly available anywhere in the world, the applicant is given a one-year grace period to file in the country. The application must be on file in Canada by the end of the grace period, regardless of whether a priority claim to an earlier field application was made. Following changes in force from Nov. 5, 2018, the test for novelty and prior self-disclosure is relative to the priority date of the Canadian application such that the Canadian application no longer needs to be on file in Canada by the end of the one year grace period.
e. Term of protection
For applications filed before Nov. 5, 2018, the term of protection for a registered design is a maximum of 10 years from the date of registration, provided a renewal payment is made at the fifth anniversary - or within any grace period thereafter. For applications filed after Nov. 5, 2018, the term of the registered design begins at registration and ends on the later of 10 years after the registration date and 15 years after the filing date. Similarly, only one renewal fee is payable at the fifth anniversary of registration or during the grace period thereafter.
f. Should a search be conducted?
Like patents and trademarks, a pre-filing search or pre-product introduction search is often indicated. Design searches assist with the analysis of whether or not the proposed design is registrable - i.e., is it a sufficiently original design - and whether the making, selling, etc., of the design may infringe the design rights of another.
Unlike patents and trademarks, design applications are kept secret by CIPO unless - and until - the design is registered. However, beginning Nov. 5, 2018, new applications will be made available to the public. Applications will be made available to the public on the earlier of the registration date and the day that is 30 months after the filing date or the earliest priority date. Applicants may request a deferral of registration to defer publication.
g. The application process
A design application includes the following elements:
- Name and address of the applicant/proprietor.
- Title of the design, which is the ordinary commercial name of the article to which the design is applied.
- A description setting out the visual features of the design. From Nov. 5, 2018, a description is optional in applications filed on or after this date but should be considered.
- Sufficient views, in drawings or photographs, of the complete article to represent all the visual features of the design set out in the description. When more than one figure is included, the figures are numbered and a brief description of the figure is included. Changes effective Nov. 5, 2018 provide more flexibility regarding descriptions and numbering, including permitting filing an application containing drawings and photographs together.
A filing fee is not a filing date requirement. The filing fee is $400 plus $10 per sheet for each sheet of figures over 10 sheets.
Design applications are examined for formalities and then originality. One or more office actions may issue raising objections to the application. A period of time is provided to reply and an extension of time is available.
If the application is allowed, the design proceeds to registration without notice to the applicant.
If no complications are encountered, registration may be obtained in about nine months. Publication (registration) by CIPO may be deferred upon written request and payment of a fee.
A refusal to register a design may be appealed to the Patent Appeal Board and then, if necessary, the Federal Court of Canada.
Drawing requirements - in terms of number of views, format, style and quality - are similar to requirements in the United States, rather than the more lax requirements of a community design in Europe, for example. New Canadian practices as of Nov. 5, 2018 further harmonize Canadian requirements with WIPO and other jurisdictions and reduce the compliance burden when filing in Canada.
Broken lines may be used to illustrate a portion, or portions, of the article that do not form part of the design. A single view showing environment is allowed, although changes as of Nov. 5, 2018, permit more than one such view in new applications. Cross-sectional, enlargement, fragmentary and other views may be permitted, following CIPO's style guide until changes are effective as of Nov. 5, 2018. Photograph requirements are also similar to U.S. requirements. Since January 2017, colour may be claimed as a feature of a design in Canada. The application may show more than one variant (embodiment) of the design, provided that the variants do not differ substantially from one another. However, CIPO's practice does not permit variants to coexist in a single application where portions of the article appear differently in the variants through the use of broken lines. Divisional applications are only permitted when a design application is filed showing more than one design. From Nov. 5, 2018, a divisional application may be filed to any feature or features disclosed in a parent Canadian application, even if such a feature is environment or in a non-design portion of the article.
A priority claim may be made if a prior application was filed in another qualifying jurisdiction to register the same design within the previous six months. The priority application details - i.e., jurisdiction, filing date and application number - must be provided to CIPO before the expiry of the six-month period. A certified copy of the priority application is not required unless requisitioned by CIPO, which rarely occurs. From Nov. 5, 2018, in new applications, a priority claim may be made to a qualifying Canadian application.
h. Canadian adherence to the Geneva Act of the Hague Agreement
From Nov. 5, 2018, Canada may be designated in an international application filed through WIPO. Canada will examine international applications designating Canada ("Hague applications") for domestic law compliance, like the United States does for its related applications, and may issue a notice of refusal under the international procedure for non-compliance. In particular, though formal representation and application content requirements are harmonized to WIPO's requirements for Hague applications under Canada's new law and regulations, etc., CIPO Examiners will review Hague applications to ensure the design is clearly represented, that it relates to registrable subject matter in Canada and that it is an original design, etc. Certain subject matter like a "logo", (e.g. a two dimensional ornamentation that is not referenced to a specific finished article), is not registrable in Canada. Applicants may file a Canadian divisional application from an international application.
Applicants may wish to compare and contrast advantages to applying directly with CIPO against filing a Hague application as such Hague applications are often more restrictive than a direct Canadian filing.
Canada enjoys a vibrant economy and a culture of technological innovation in areas such as communication, internet-related devices and software, clean and renewable technologies, tools and methods used in the harvesting and processing of natural resources, and agricultural and pharmaceutical products and practices.
Canada is a signatory of the Paris Convention, and has acceded to the principal multilateral treaties that seek to harmonize patent protection internationally. Canada also benefits from IP bilateral agreements with a number of G-20 members. Accordingly, foreign businesses pursuing business in Canada will find many similarities between their domestic patent laws and those governing Canada.
By their very nature, patents provide their owner with an exclusionary right to an invention. It is natural for companies to capitalize on their research and development expenditures to protect their competitive edge in the Canadian marketplace. However, Canadian patent laws and regulatory practices do possess certain subtleties that should be noted. Accordingly, foreign companies need to be aware of unique aspects of Canadian patent law and CIPO practice, which can significantly influence the scope and costs of obtaining patent protection in Canada.
a. Acceptable subject matter for patent protection
A Canadian patent may be obtained for any new invention, including processes, machines, methods of manufacturing or a composition, or any new and useful improvement to one of the above that is applicable to industry. The key is that there must be at least one new and innovative element to the invention or improvement. That being said, Canadian patents cannot be issued to protect a scientific principle or theorem in the abstract without a practical application.
Canadian courts have ruled that business methods are patentable in Canada. However, CIPO has implemented controversial examination policies that create new obstacles to patenting business methods and computer-implemented inventions in general. It is therefore advisable for a patent application to be drafted specifically with these unique Canadian examination policies in mind, to maximize the likelihood that the patent will be granted.
Claim format and content can make a big difference between acceptance and rejection for certain technologies. For example, methods that provide practical therapeutic benefits to subjects are considered methods of medical treatment, and are not patentable in Canada. However, therapeutic innovations may generally be captured in the form of "use" claims. Also, higher life forms - such as multicellular plants and animals - are not patentable per se, but a higher life form may be protected by directing claims to a cell having distinctive characteristics.
Canada has no continuation practice, as is available in the U.S., and the scope for filing divisional applications is limited by our distinct double patenting doctrine. Strategic decisions regarding the pattern of prosecution may accordingly be different in Canada than in other jurisdictions, and should be given attention early in the application process.
b. Process to obtain patent protection
The granting of Canadian patents is within the exclusive jurisdiction of the Canadian federal government - under the control of CIPO - and is governed by the Canadian Patent Act and Patent Rules.
Patent protection is requested by filing a formally prepared application with CIPO, which should include background, description, drawings and claims that provide sufficient detail of the invention and its operations for a notional person skilled in the area to create it. Also included in the filing are the requisite CIPO patent application fees and details concerning the invention's inventor(s).
Once a request for examination is filed, a patent application is examined by a patent examiner in view of any information publicly available before the filing date. Once deemed allowable by the patent examiner, the patent is issued after payment of an issue fee.
c. Patent rights and terms conferred by patent issuance
Rights derived from an issued Canadian patent can be enforced through the Federal Court of Canada or Canadian provincial courts.
A Canadian patent is a monopoly granted by the Canadian government that affords the patent holder an exclusive right to manufacture, sell or use an invention throughout the country for a period of 20 years from the date of the application. A patent owner or licensee may bring a court action against someone who infringes the claims of the patent.
d. Ownership of a Canadian patent
Canadian patent applications distinctly identify individual inventors, as well as the owners of patent rights - identified as "applicants". In the absence of a transfer of rights, inventors own the patent rights and are accordingly also identified as applicants. An invention created by joint inventors would be jointly owned, with specific rights accorded to each co-owner. In general, inventions created in the course of an employment relationship, where the inventor is employed to invent, are owned by the employer.
e. Transferring of patent ownership through assignment or licence
Patent rights can be assigned or licensed in whole or in part, and transfer documents can be recorded at CIPO. Joint owners can separately assign or license their rights, but the assignment or license by one party cannot dilute the patent rights of the other party - unless there is an agreement to the contrary between the co-owners.
f. Cost reduction through deferred or reduced patent fees
In Canada, the examination of a patent application is not automatic upon filing and must be requested by the applicant or a third party. If examination is deferred, the results of examination of corresponding patent applications in other countries may lead to strategies to expedite prosecution of the Canadian application at reduced cost.
There are no claims fees in Canada of any kind. There is no limit to the total number of claims, or the number of independent claims, included in a patent application. There are also no restrictions on the use of multiply dependent claims. There is a nominal excess-page printing fee for patent applications exceeding 100 pages in length.
Canada has a "small entity" designation that in circumscribed cases allows businesses employing 50 or fewer employees and universities to pay reduced patent application filing, examination and annual maintenance fees.
g. Accelerated examination program for designated green and clean technology patents
Examination of a Canadian patent application based on clean or green technology can be accelerated to reduce the time to obtain patent protection. To apply for accelerated examination, the applicant must file a declaration indicating that the application relates to commercial technology that would help to resolve or mitigate environmental impacts, or conserve the natural environment and resources.
h. Accelerated examination programs under patent prosecution highway (PPH) initiatives
Another instance in which Canadian patent protection may be accelerated is where patent protection has already been obtained in other jurisdictions.
Canada co-operates with a number of other partner countries in patent prosecution highway programs. Through this scheme, an applicant with at least one patent claim that has been found allowable by a partner office in one jurisdiction can have examination of the corresponding patent application advanced in the partner office of another jurisdiction. This allows patent results obtained in other countries to be used to streamline examination in the corresponding Canadian patent application or, alternatively, allows the Canadian patent application to be used to streamline examination in another country or countries.
i. Advanced examination of Canadian patent applications
Accelerated examination of a patent application can also be obtained by the applicant or any other person who alleges that failure to accelerate it will prejudice their rights. This process is called a "Special Order". The Special Order process is relatively straightforward. It is granted automatically in response to a request containing an affirmation that the failure to advance the examination would prejudice that person's rights, as well as the payment of a government fee.
j. Factors affecting the timing of patent application filing in Canada
Canada is a first-to-file jurisdiction, meaning a patent is issued to the first applicant to file a patent application with an enabling description that fully supports the claimed invention.
Canada has a 12-month grace period for prior public disclosures derived from the inventors, based on the Canadian filing date. The 12-month grace period provides the opportunity to file a patent application in Canada within 12 months of the applicant disclosing the invention to the public. The Canadian filing date of a PCT application that enters the national phase in Canada is deemed to be the "international filing date".
k. Procedural flexibility in obtaining Canadian patent protection
The examination process before the Canadian patent office is relatively flexible compared to other jurisdictions, and this flexibility can be leveraged with strategies that minimize prosecution costs.
For example, during the examination of the patent application, voluntary amendments to the claims or other parts of the application may be filed at any time in Canada. As well, final examination reports are generally only issued when it is clear that the examiner and applicant have reached an impasse. This typically allows for multiple opportunities to overcome objections raised by an examiner.
In general, when interpreting patent claims, Canadian courts do not consider any submissions made by the patentee during prosecution of the application.
l. Protesting the grant of a patent
In Canada, there is no formal interference or opposition procedure available to challenge a competitor's patent application. There is however, a mechanism for one party to provide information to the patent office in an effort to prevent a patent being granted, a procedure known as a "protest".
A trademark is a word, logo, sound or other business device that serves as a distinctive indicator of the source of particular goods or services. In Canada, while trademarks do not need to be registered to be protected, the scope of rights afforded by registration and the available means of enforcement are greater and more robust than for unregistered trademarks.
As such, trademark registration is a good investment for any owner who plans to use or protect a trademark in Canada. It must be noted that a trademark registration in another country with no use or reputation in Canada conveys no protection in Canada.
Canadian trademark law shares many similarities with U.S. trademark law, but also has its own particularities. As registering a trademark under the Canadian Trademarks Act can be technical, it is advisable to consult a lawyer or agent with expertise in this area to oversee the process and advise on protecting and licensing trademarks in Canada.
a. Registered and unregistered trademarks
If an unregistered trademark has been in use and possesses a reputation or goodwill in Canada, the common law will protect it under the doctrine of passing off. However, the scope of protection for unregistered trademarks is generally narrower than that for registered trademarks. Protection for an unregistered trademark is generally limited to the geographic boundaries of its established goodwill or reputation.
On the other hand, obtaining a registration for a trademark confers many advantages, including the exclusive right to use the trademark across Canada, without geographic restriction, in relation to the goods or services specified in the registration.
Registration can be obtained for a trademark in relation to goods and services. In Canada, unlike in many other countries, a single trademark registration can cover multiple classes of goods and services.
Business names may be registrable as trademarks if such a name is also used as a trademark in association with goods or services - in other words, when the business name is also used to distinguish a product or service of one company from that of another. If a business name is not used as a trademark, it may nonetheless be protected under the doctrine of passing off in a similar manner to an unregistered common law trademark.
In Canada, there is no formal requirement for the use of trademark notices such as ® or TM. However, the use of such notices can be helpful when asserting something as a trademark. When the trademark is being used under licence by a third party, the use of similar notations to direct consumers to a legend (stating the owner's name and that the mark is being used by a third party under licence) is highly recommended, as it gives rise to a statutory presumption of proper licensing.
b. Entitlement, prosecution and opposition
There are numerous procedural and substantive requirements for the application, processing and registration of a trademark in Canada. Before applying for a trademark, it is advisable to conduct a trademark search to ensure that the trademark is registrable and that the applicant is the party entitled to the registration of the trademark.
There are currently three possible bases for registration of a trademark in Canada: the use of the trademark in Canada, the registration and use of the trademark abroad, or the proposed use of the trademark in Canada. Resolution of competing claims to a trademark will likely depend on which party first used or made the trademark known in Canada, or was the first to file an application on the basis of foreign registration or proposed use, depending on the circumstances. Recent legislative changes that are expected to come into force sometime in 2017 will remove the requirement to state a basis for Canadian applications.
Prior to registration, it is possible for a third party to oppose an application for a trademark on specific listed grounds, such as confusion or technical defects in the application. In Canada, technical grounds can be fatal to an application with no opportunity to remedy them, further underlining the need for marks to be prosecuted by experienced trademark counsel.
c. Term of trademark protection
Registered trademarks currently enjoy a 15-year term renewable upon payment of a fee. No proof or declaration of continuing use is required. Recent legislative changes that are expected to come into force sometime in 2017 will reduce the renewal period to 10 years.
Nevertheless, registered trademarks are liable to be expunged from the register after an initial grace period if - after a request to show use by the registrar or any other interested party - the trademark owner cannot show that the trademark has been "used" (for the purposes of the Trademarks Act) during the previous three years.
d. Assignment and licensing of trademarks
The Trademarks Act allows registered trademarks to be assigned. Since trademark registrations in Canada can cover multiple goods or services, it may be possible to only partially assign a trademark with respect to some of the goods or services - provided there would be no likelihood of confusion between the two resulting registrations. Territorial assignments of registered marks are generally not permitted under the Trademarks Act.
Canada also permits the licensing of trademarks, provided certain conditions are met. For a trademark to be properly licensed and to avoid the risk of invalidity, the trademark owner must control, under the licence, the character or quality of the associated goods or services. While trademark licences can be both oral and written, a bare assertion of control or mere evidence of corporate control of a subsidiary will be insufficient and may render the trademark invalid.
e. Use of trademarks in Québec
It is important for all trademark owners to appreciate that special rules apply to the use of trademarks in Québec, due to the Charter of the French Language (the Charter) in that province. The Charter provides that every marking on a product or document, as well as public signs, posters and other commercial advertising, must be drafted in the French language, though it may be accompanied by a translation.
However, a regulation in the Charter creates an exception for certain trademarks: a "recognized trademark" may be used exclusively in a language other than French, unless a French version has been registered. If a French version of the trademark has been registered, it must be used instead.
In the past, both unregistered and registered trademarks have been held to be covered by the exception. However, in the absence of a registration, it may not be possible to prove the existence of a trademark to the satisfaction of the authorities. The Office québécois de la langue française, the body that is responsible for enforcing the Charter, takes the view that the "recognized trademark" exception generally requires registration. The requirement is a commercial reality in Québec, and extends to the packaging of goods that are sold in that province whether or not they are also intended for other markets.
Trademarks and other terms composed of descriptive elements are most likely to be challenged. Therefore, businesses operating (or selling goods) in Québec that wish to make use of the exception should register their trademarks - especially where the mark contains descriptive terms - and would be well-advised to seek guidance from Canadian trademark counsel as to compliance with the terms of the Charter and the current position of lthe Office.
5. Enforcement of intellectual property rights
IP rights - including patents, trademarks, copyright and industrial designs - are generally enforced through proceedings brought before the Federal Court of Canada. While the provincial courts have concurrent jurisdiction for enforcement of IP rights, the country-wide jurisdiction of the Federal Court gives it the ability to grant an injunction throughout Canada in a single proceeding. Over 95 per cent of all IP cases are brought to the Federal Court.
The only exception is where the IP right relates to trade secret law, which, as a matter of property and civil rights, can be enforced only in the provincial courts. For passing off matters, while only the provincial courts can enforce the common law right, the Federal Court has jurisdiction under Section 7 of the Trademarks Act to hear essentially the same action.
The Federal Court of Canada consists of approximately 45 trial court judges and prothonotaries who can sit anywhere in Canada. While the Federal Court has its headquarters in Ottawa, it is essentially a circuit court, with judges travelling throughout the country to hear cases. Any member of any bar of Canada can appear in the Federal Court, regardless of the province in which the court is sitting. A successful plaintiff is generally entitled to its damages and a permanent injunction - assuming the right has not expired - and some of its legal expenses. Depending on the IP right, the successful plaintiff may also elect to appropriate the infringer's profits.
While Canadian courts may grant interlocutory injunctions, they are rarely granted in patent, copyright and design matters, and only occasionally granted in trademarks. Proving irreparable harm - i.e., harm that is not compensable in damages - is key to obtaining an interlocutory injunction.
a. Patent enforcement
In general, patent litigation proceedings are commenced with a Statement of Claim and proceed through oral and document discovery, leading to a trial by judge alone.
Proceedings by way of action generally take between two and four years to get to trial. A right of appeal is available to the Federal Court of Appeal and, with leave, to the Supreme Court of Canada.
Frequently in infringement proceedings, a defence and counterclaim of invalidity are also raised by the defendant. Alternatively, a potential infringer could commence a proceeding seeking a declaration of non-infringement and/or impeachment of the patent.
i. Section 55.2 of the Patent Act
Separate and apart from actions for infringement, a procedure is available for certain pharmaceutical patents that is similar to Hatch-Waxman Act proceedings in the U.S. Under this provision, a generic drug manufacturer seeking to come to market by reliance on an originator's Notice of Compliance must address any patent that has been listed with the minister of health. The initial step is to forward a Notice of Allegation by the second person, at which point the patentee has 45 days to commence an action seeking an order that prohibits the minister of health from issuing a Notice of Compliance to the generic.
These proceedings were formerly summary in nature, but due to recent legislative changes, are now full actions. Consequently, there is now a right of discovery for both sides. Furthermore, decisions are now final, but with a right of appeal to the Federal Court of Appeal.
b. Trademark enforcement: Passing off, infringement and depreciation of goodwill
The owner of an unregistered trademark may enforce its rights through an action for passing off. To succeed, the owner of the unregistered mark must show the following:
- That the owner has a commercial reputation or goodwill created through use of its mark
- That another person has sold goods or services in a way that misrepresented them as originating from the trademark owner
- That the owner's reputation or goodwill has been damaged
Mechanisms for enforcing a registered trademark provide a greater ambit of protection than those available to an unregistered trademark. In addition to an action for passing off, the owner of a registered trademark may also bring an action for trademark infringement or depreciation of goodwill.
In the Federal Court, trademark owners may also enforce their rights by means of a summary proceeding called an application. An application proceeds on a paper record and does not involve any discovery process.
The remedies available against a party who infringes a trademark or depreciates the value of its goodwill include injunctive relief, monetary damages or profits, as well as an order for the destruction of the infringing articles.
Recent amendments to the Trademarks Act also make certain types of trademark infringement and counterfeiting criminal offences punishable by fine or imprisonment.
c. How is copyright enforced and what relief is available?
In Canada, copyright can be enforced by either an action with trial or by a summary application proceeding in the Federal Court. An application proceeds on a paper record and does not involve any discovery process.
An exclusive licensee may commence proceedings in its own name to enforce its rights, but will generally be required to join the copyright owner as a party unless the court orders otherwise.
Upon proof of infringement, a copyright holder may obtain a broad range of remedies, including an award of damages, an accounting of profits, permanent injunctive relief and an order of delivery-up of infringing materials.
At any time prior to judgment, a plaintiff can also elect to recover "statutory damages" instead of other compensatory monetary remedies. (The right to seek punitive damages is not affected by the selection of statutory damages). The maximum award of statutory damages is $20,000 per work infringed. A lower cap of $5,000 applies to non-commercial infringements.
The Copyright Act also makes certain types of copyright infringement a criminal offence.
d. Industrial design
Industrial designs are also enforced via an action for infringement in a manner similar to that set out for copyrights, trademarks and patents. With respect to industrial designs, infringement can apply only to elements of design - there is no protection for purely functional elements that may have been taken by a competitor.
A successful plaintiff may obtain an injunction and damages for infringement.
e. Trade secrets, unfair competition claims and ancillary litigation
As noted previously, a breach of trade secrets can be enforced only in provincial courts. Consequently, where there is a breach of a trade secret and potentially an infringement of a patent, the preferred venue for resolving both matters would be the provincial court with jurisdiction over the defendant.
Similarly, other types of proceedings can often be joined together. For instance, a patent and a trademark case can be joined, depending on the circumstances. In addition, sometimes an attack based on the Competition Act can be joined with a Patent Act defence. Consequently, IP litigation is not always a matter of simply enforcing one right to the exclusion of other causes of action, but often involves a portfolio of issues - both core IP and related matters that touch on areas including trade secret law and competition law, among others.
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