March 19 2018
CIPO accepts trademark applications covering cannabis and marijuana
Trademark registrations can serve as both sword and shield
Unlicensed trademark applications may be susceptible to third-party oppositions
Exciting opportunities for brand owners
The federal government is moving quickly towards legalising the possession and consumption of cannabis for recreational purposes. However, Canada's cannabis industry is already 'overgrown' with both licensed and unlicensed producers all vying for consumers' attention with different brands and strains of cannabis. There are already approximately 1,700 trademark applications and registrations on the Trademarks Database covering "cannabis" or "marijuana".
This update explores some of the unique challenges faced by brand owners, start-ups and so-called 'ganjapreneurs' in Canada's cannabis industry so that they can strategise accordingly – ideally before launching a cannabis brand in Canada.
In order to obtain registered trademark rights in Canada, trademark owners must file a trademark application with the Canadian Intellectual Property Office (CIPO). The application must include, among other things, a description – in "ordinary commercial terms" – of the goods or services for which the applicant has used or intends to use the applied-for trademark. In Canada, CIPO will accept descriptions that explicitly refer to cannabis or marijuana, such as:
The US Patent and Trademark Office does not allow applications that list cannabis or marijuana among the goods associated with an applied-for trademark, as these substances cannot be lawfully distributed or dispensed under US federal law. However, in Canada, medical marijuana may be lawfully distributed or dispensed under the Controlled Drugs and Substances Act and the Access to Cannabis for Medical Purposes Regulations. Cannabis brand owners in Canada and abroad should therefore apply to register their trademark rights with CIPO and thus obtain the exclusive right to use their marks in Canada in association with controlled substances such as cannabis or marijuana.
In addition to having the exclusive right to use their trademark in Canada in connection with the registered goods and services, owners of a registered trademark can prevent others from using the same or a confusingly similar mark in Canada in connection with the same or similar goods or services. Those seeking to enforce their trademark rights against others would be wise to register those rights with CIPO. Otherwise, a brand owner is limited in its ability to prevent others from using a confusingly similar mark and must instead rely on its common law rights and earned reputation in Canada, which can be costly and difficult to prove in the courts and thus enforce.
Further, a registered rights holder can obtain permanent injunctive relief against an infringer even if the rights holder's mark is not in use in Canada. While the registration of a trademark that is not in use is vulnerable to summary cancellation, it is generally not as vulnerable when the registration is less than three years old. Moreover, a nationwide injunction against an infringer can be obtained even if the infringer is undertaking business in areas of Canada in which the rights holder is not using its trademark.
Finally, certain applicants are already applying to register what appear to be third-party trademarks, covering all or almost all classes of goods and services. One particular entity has filed over 300 applications in the past two years to register trademarks that may be owned by third parties. Thus, brand owners in the cannabis industry that have yet to register their trademarks should consider filing applications as soon as possible in order to prevent others from attempting to register their marks. In most cases, it is simpler – and cheaper – to be proactive rather than reactive.
If and when a trademark application is approved by CIPO, it is advertised in the Trademarks Journal for opposition purposes. Thereafter, third parties have an extendible, two-month opposition period within which to oppose the trademark application on a number of statutory grounds.
One of those grounds is that the applicant could not have been satisfied that it was entitled to use the applied-for trademark in Canada in association with the goods or services described in the application as of the filing date.
The Trademarks Opposition Board has found that an applicant could not have been so satisfied where the use of the applied-for trademark in Canada in association with those goods or services would violate federal law.
In Canada, unlicensed producers and distributors of cannabis are not legally permitted to produce or distribute cannabis under the Controlled Drugs and Substances Act. Insofar as these producers or distributors apply to register the trademarks under which they unlawfully produce or distribute cannabis in Canada, their applications are susceptible to third-party oppositions and subsequent refusals.
Notwithstanding the future legalisation of cannabis for recreational purposes and the upcoming changes to the Trademarks Act, discussed below, this ground of opposition will remain a significant hurdle for any applicants in the cannabis industry that are operating outside the law.
Use requirement repealed
Recent amendments to the Trademarks Act are not expected to come into force until early 2019, when the law will undergo its most significant revision in over 50 years (for further details please see "Signed, sealed and almost delivered: new trademark law in sight").
Among the most important changes to the Trademarks Act is the repeal of the use requirement. At present, a trademark application will not proceed to registration until the applied-for trademark is used in Canada or abroad. As a result, an applicant must claim that it has made bona fide use of the applied-for trademark in association with the goods or services described in the application before it obtains the exclusive right to use the mark in Canada. However, once the amendments come into force, an applicant will be permitted to register a trademark without using it anywhere in the world.
The repeal of the use requirement presents a unique opportunity for licensed producers and distributors of cannabis in Canada. At present, the complexion of the cannabis market is a source of great speculation among brand owners and investors. It remains unclear which products will succeed and which will not and since cannabis may be consumed in different ways, licensed producers are now hedging their bets by investing significant time and capital in the development and production of a wide array of cannabis products – from dried and fresh cannabis to cannabis oils and edibles, patches and vapours.
With the repeal of the use requirement, licensed producers will be able to:
The scope of a trademark application is therefore only as limited as an applicant's imagination, as licensed producers continue to think of new ways of consuming cannabis. While the amendments have yet to come into force, cannabis brand owners can file these broad applications now and leverage the broad protection afforded by them when the use requirement is eventually repealed.
Distinctive scents and tastes will become registrable trademarks
Another notable amendment to the act is that Canada's trademark system will protect a broad range of non-traditional marks previously unregistrable by brand owners. Once the new act comes into force, CIPO will accept applications for non-traditional marks – such as colours (without delineated contours), holograms, moving images, scents, tastes and textures – which have become distinctive of their owners at the time of filing. These amendments will be especially valuable to brand owners in the cannabis industry, where scent and taste are likely to serve as primary distinguishing features of producers' brands.
The amendments to the act will present licensed producers with an exciting and invaluable opportunity to register particular scents and tastes as their own source indicators. For example, a licensed producer may apply to register for its own exclusive use of a brand of cannabis that smells like pine trees or tastes like peanut butter.
However, under the amended act, an applicant will have to furnish evidence to establish that the applied-for scent or taste is distinctive to the applicant as of the filing date. Such evidence may include sales records, advertising and promotional spends and sample ads and promotional materials that show that the applied-for scent or taste is distinctive to the applicant.
As in any new industry, getting a head start in Canada's cannabis market may be the difference between commercial success and failure. Licensed producers need a comprehensive brand protection strategy to help grow their business and should consult local trademark counsel to better understand how to leverage Canada's trademark law to 'weed out' the competition.
For further information on this topic please contact Kwan T Loh at Smart & Biggar/Fetherstonhaugh's Vancouver office by telephone (+1 613 232 2486) or email (email@example.com). Alternatively, contact Graham Hood at Smart & Biggar/Fetherstonhaugh's Toronto office by telephone (+1 416 593 5514) or email (firstname.lastname@example.org). The Smart & Biggar/Fetherstonhaugh website can be accessed at www.smart-biggar.ca.
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