Canadian Patent Practice Update: Act Now to Avoid Excess Claim Fees

November 2, 2021

Excess claim fees on the horizon

As reported earlier, the Canadian government published proposed amendments to the Patent Rules on July 3, 2021. A significant component of the proposal is the introduction of excess claim fees on the order of $100 CAD for each claim beyond 20 claims, which will be payable when requesting examination, and will be re-assessed upon allowance to determine if further claim fees are due when paying the final fee based on changes in the number of claims during examination.

Consider acting now

In anticipation of the likely introduction of such a regime in early 2022 (which may be announced with only 30 days’ notice), Applicants may wish to begin assessment of their Canadian patent matters and consider requesting examination by the end of 2021 to avoid the payment of such excess claim fees and retain the right to present a larger number of claims for examination. Based on the transitional provisions in the proposed Rules, taking such action now shall avoid payment of such excess claim fees when requesting examination and when paying the final fee upon allowance.

We thus recommend that Applicants consider taking such action this year to retain the benefits of the current regime, particularly for cases with a large number of claims as well as those which were already being considered for requesting examination in the short term.

Stay Tuned!

While the exact details and timing of the upcoming changes remain unknown, the earlier proposal suggests that they will likely be soon and with little advance notice. Please stay tuned for upcoming news in due course, and do not hesitate to contact a member of our patent team for guidance through the ultimate transition.

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Written by

Serge Shahinian
Partner, Patent Agent
Alain Dumont
Partner, Patent Agent

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August 2, 2024

Publication of the Regulation clarifying the obligations of Bill 96: Impacts on trademarks for products, advertising, and public signs and posters

The Regulation1 specifying the new obligations of Bill 962 was published in the Gazette officielle du Québec on June 26, 2024. It modifies the current Regulation respecting the language of commerce and business.3 These changes were expected considering the questions raised by the passage of Bill 96 in June 2022, which required clarification. In this bulletin, we will discuss issues related to the use of trademarks in connection with products, commercial publications, public signs and posters, and commercial advertising. Exception for recognized trademarks Good news! The Regulation reintroduces the exception for “recognized” trademarks,4 within the meaning of the Trademarks Act. Common law trademarks and trademarks registered with the Canadian Intellectual Property Office (“CIPO”) may be used without a French version, provided that no French version of the trademark appears in the Register. By regulation, the government has extended the scope of the exception to trademarks. Under Bill 96 it was to apply only to CIPO-registered trademarks. It has been extended to also cover common law trademarks. With this amendment, the government has made the rules around trademarks more consistent, whether they are used in connection with products, commercial publications or public signs and posters. It is still recommended to register your trademarks to protect your rights, but registration is no longer a condition for compliance with applicable regulations. Obligation to translate generic and descriptive terms included in trademarks The Charter of the French language5 (the “Charter”) stipulates that any inscription on a product, its container or its wrapping must be in French, and that no inscription in another language may be given greater prominence than that in French or be available on more favourable terms. The Regulation confirms that the term “product” includes its container, packaging and any accompanying documents or objects.6 The Regulation also clarifies the scope of the obligation to translate descriptions and generic terms included in trademarks: “Description” and “generic term”: A description refers to one or more words describing the characteristics of a product, while a generic term describes the nature of a product, excluding the name of the enterprise and the name of the product as sold.7 Designations of origin and distinctive names of a cultural nature are not considered a description or a generic term. In all likelihood, the reference to the “name of the product as sold” refers to the product’s main trademark. The obligation to translate generic terms or descriptions contained in the trademark would not apply to the main trademarks under which the product is sold. Thus, according to the example provided by the Quebec government, there would be no need to translate into French the descriptions or generic terms included in the main trademark BestSoap, as illustrated below. The question also arises regarding secondary trademarks, which are often used to designate a specific product within a range of products. Can we say that such a secondary trademark qualifies as a "name of the product as sold," in addition to the main trademark? Unfortunately, the guide published by the Office québécois de la langue française ("OQLF") does not provide any clarity on this matter, while the text of the Regulation appears broad enough to allow for such an argument depending on the circumstances. In our opinion, such an argument could be made in some cases, but we will need to await the position of the OQLF (or a court decision) for more certainty on this issue. The Regulation specifies that the French translation of the generic terms or descriptions included in trademarks must appear in French on the product or on a medium permanently attached to the product.8 However, it does not provide a definition of “a medium permanently attached to the product.” It will be interesting to see how practice develops in this area, and how the OQLF interprets this notion. Keep in mind the Charter’s principle that no inscription in another language should be available on more favourable terms. Companies opting for the medium option will need to ensure not only the permanence of the medium, but also its availability, under conditions that are at least as favourable. It should also be noted that the size of the French translation of generic terms and descriptions included in a trademark is not specifically addressed in the Regulation. However, the OQLF website specifies that no generic term or description in another language should take precedence over that appearing in French; the OQLF thus seems to apply the general rule contained in the Charter.9 This means that the French text must be at least equivalent in size and appearance to that in another language, so that the latter is not predominant. Transitional period: The Regulation allows a two-year grace period to give businesses time to comply with the above requirements. Until June 1, 2027, any product that does not comply with these new requirements may continue to be distributed, retailed, leased, offered for sale or lease, or otherwise offered on the market, whether in return for payment or free of charge, provided (i) it was manufactured before June 1, 2025, and (ii) no corresponding French version of the recognized trademark has been registered in the Canadian trademark register by June 26, 2024.10 Although it will still be necessary to make every effort to comply with obligations, this measure ensures that existing non-compliant products can be liquidated. Commercial publications The Regulation makes no changes to the rules governing commercial publications, such as catalogues, brochures, folders, commercial directories and other similar publications. The exception applicable to “recognized” trademarks, which had not been amended in Bill 96 or in the draft regulations, remains unchanged. Common law trademarks and trademarks registered with CIPO may be used without a French version, provided that no French version has been registered. Contrary to what had been envisaged in the draft regulations, websites and social media are not expressly named as commercial publications whose French version must be available on terms that are at least as favourable as any version in another language. To date, the interpretation adopted and applied by the OQLF and the courts is that websites and social media are considered commercial publications and must therefore follow the same rules. Nevertheless, we will remain watchful to see if the lack of explicit reference in the Regulation to websites and social media is of any significance, and if the OQLF will consider changes to its approach to these two types of communication. Advertising and public signs and posters It is well known that the Charter requires public signs and posters and commercial advertising in Quebec to be in French. They may be both in French and in another language provided that French is markedly predominant.11 The “recognized” trademark exception also applies to public signs and posters and commercial advertising. Thus, common law trademarks and CIPO-registered trademarks may be used without a French version, if there is no corresponding French version in the Canadian trademark register.12 For public signs and posters visible from outside premises, the rule of “sufficient presence” of French gives way to that of the “clear predominance” of French, when the trademark or business name is in a language other than French, in whole or in part.13 Public signage visible from outside premises includes not only the exterior of a building, but also premises inside a shopping centre.14 In such cases, a trademark or company name in a language other than French must be accompanied by a generic term, a description of the goods or services concerned, or a slogan, in French.15 This trademark or company name visible on a storefront or inside a shopping centre will be considered in the overall visual impact of the premises. For the same visual field, text written in French has much greater impact when (i) the French text occupies a space at least twice as large as that devoted to text in another language, and (ii) its legibility and permanent visibility are at least equivalent to that of text in another language.16 Finally, as concerns digital signage with alternating French and non-French text, the French text is considered to have a much greater visual impact when it is visible for at least twice as long as the non-French text.17 Note that there is no grace period for public signs and posters. Companies therefore have until June 1, 2025, to comply with the new rules. The examples below, from the Quebec government, illustrate the application of these rules: Here is a summary of the main changes to the Charter and the Regulation that will come into effect on June 1, 2025: Products (labels, containers, packaging, or any accompanying document or object) A “recognized” trademark (registered or used) may be used in a language other than French, unless a corresponding French version is on the Canadian trademark register. Any description or generic term included in a trademark must appear in French, excluding the name of the company or the name of the product as sold (and other specific exceptions); on the OQLF website, it is stated that no generic term or description in another language may take precedence over that appearing in French. The French translation of these generic terms or descriptions must appear in French on the product or on a medium permanently attached to the product. A grace period until June 1, 2027, is granted for any product that does not comply with these new requirements; such a product may continue to be distributed, retailed, leased, offered for sale or lease, or otherwise offered on the market, whether in return for payment or free of charge, provided (i) it was manufactured before June 1, 2025, and (ii) no corresponding French version of the recognized trademark has been registered in the Canadian trademark register by June 26, 2024. Commercial publications (catalogues, brochures, folders, commercial directories) No change: A “recognized” trademark within the meaning of the Trademarks Act (registered or used) may be used in a language other than French, unless a French version has been registered. It is expected that the rules governing commercial publications will apply to websites and social media, in line with the current interpretation of the OQLF and the courts. Public signs and posters A “recognized” trademark within the meaning of the Trademarks Act(registered or used) may be used in a language other than French, unless a corresponding French version is on the Canadian trademark register. In public signs and posters visible from outside premises, including inside shopping malls, when a trademark or commercial name is in a language other than French, even in part: French must be clearly predominant, taking into account the space allotted to the trademark or company name; and the trademark or company name must be accompanied by French terms, in particular a generic term, a description of the products or services, or a slogan. For the same visual space, the space allotted to French text must be at least twice as large as that devoted to text in another language, and its legibility and permanent visibility must be at least equivalent to that of text in another language. To learn more about this topic or for any questions concerning the Charter of the French language and its regulations, please contact our professionals or consult our previous publications! Regulation to amend mainly the Regulation respecting the language of commerce and business, Gazette officielle du Québec, (the "Regulation"). An Act respecting French, the official and common language of Québec, SQ, 2022, c. 14 (“Bill 96”). Regulation respecting the language of commerce and business, CQLR, c. C-11, r. 9. Regulation, supra, note 1, s. 2 (7.1) and s. 4 (25.1). Charter of the French language, CQLR, c. C-11, s. 51 Regulation, supra, note 1, s. 6 (27.1). Regulation, supra, note 1, s. 6 (27.2). Regulation, supra, note 1, s. 2 (7.1). Charter, supra, note 5, s. 51. Regulation, supra, note 1, s. 7. However, the grace period has been extended to December 31, 2025, for products covered by the new labelling standards set out in the Regulations Amending the Food and Drug Regulations (Nutrition Symbols, Other Labelling Provisions, Vitamin D and Hydrogenated Fats or Oils) (SOR/2022-168) or the Regulations Amending the Food and Drug Regulations and the Cannabis Regulations (Supplemented Foods) (SOR/2022-169). Charter, supra, note 5, s. 58. Regulation, supra, note 1, s. 4 (25.1). Charter, supra, note 5, s. 58.1 and Regulation, supra, note 1, s. 4 (s. 25.1). Regulation, supra, note 1, s. 6 (27.5). Regulation, supra, note 1, s. 6 (27.7). Regulation, supra, note 1, s. 6 (27.6). Components written in French will be presumed to meet these legibility and visibility requirements if they are permanent and are designed, lighted and situated so as to make them easy to read, both at the same time, at all times. Regulation, supra, note 1, s. 6 (27.6).

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June 27, 2024

Misuse of the complaints mechanism on an e-commerce platform

At a time when Canada and many other countries are taking steps to protect users from harm online,1 a decision was handed down by the Supreme Court of British Columbia (the “Court”) on January 15, 2024, regarding the conduct of a competitor with respect to complaints about intellectual property infringement made on Amazon’s e-commerce website. Amazon’s platform is similar to many other e-commerce platforms that have a complaint mechanism for third-party use of intellectual property in violation of the rights of the real owners thereof. The complaint mechanism makes it possible for a complainant to submit an intellectual property infringement claim regarding content to which it has a good faith right in order to partially or fully remove the content in question from the pages of the alleged infringing party published on Amazon’s platform. Such a mechanism has its purpose, as it is an effective way of tracking down counterfeiters. As we will see in Keezio Group, LLC v. The Shrunks' Family Toy Company Inc.,2 the mechanism can also be used maliciously. The facts and the plaintiff’s allegations In this case, complaints were lodged by a competitor of the company that was the subject of the complaints, with both entities operating in the inflatable bed industry. Keezio Group, LLC (“Keezio”) markets the “Hiccapop Inflatable Toddler Travel Bed” (the “Hiccapop Bed”), while The Shrunks’ Family Toy Company Inc. (“The Shrunks”) offers inflatable beds consisting of a mattress placed in an inflatable bed frame. Both companies primarily sell their products on the Amazon retail platform. In February 2017, Amazon informed Keezio that it had received a report of trademark infringement regarding the Hiccapop Bed, the complainant being identified as Mr. Cirjak of The Shrunks. Subsequently, in accordance with the applicable process, Amazon removed the product from Keezio’s product-listing pages on its website. It is worth noting that assessing the substantive validity of a complaint is not part of Amazon’s complaints handling process. On or about April 17, 2017, Keezio received another notice. The complaints of 2017 were eventually withdrawn and the page featuring the Hiccapop Bed was restored. In November 2019, Keezio received two more notices of complaints from Amazon regarding violations similar to those received about two years prior. The first of these two notices, sent on November 22, 2019, referred to trademark infringement. Amazon thus removed the page in question, which contained a chart comparing Keezio’s products with The Shrunks’ products. Keezio asked for clarification of this alleged infringement but received no response from The Shrunks. Having received no details about the infringement from The Shrunks, Keezio ultimately changed its webpage to remove all mentions of “The Shrunks”, replacing them with “Rhymes with Skunks”. Although Amazon informed Keezio in a message in November 2019 that it would restore its content, the evidence does not clearly establish whether this was done. The second notice of infringement, dated November 28, 2019, concerned an allegation of copyright infringement on six webpages for the Hiccapop Bed. The pages were delisted on or about November 28, 2019, and eventually reinstated on December 2, 2019. The Shrunks denied having filed the complaints of 2019. However, the Court did not hesitate to conclude that The Shrunks was also behind these complaints. Issues at bar about the complaints There were many issues in this case, and some claims were eventually withdrawn. We will focus on the two complaints made in 2019. Specifically, Keezio argued that the complaints that The Shrunks had lodged with Amazon were unfounded, resulting in a loss of business for Keezio. In particular, the Court analyzed section 7 of the Trademarks Act.3 To succeed in such a claim, the plaintiff must prove (i) that a false or misleading statement was made (ii) that tends to discredit the business, goods or services of a competitor, (iii) resulting in damages. The Court held that the person making the statements need not know of their falsity in order to satisfy these criteria. Findings of the Court (i) The allegation of trademark infringement in the comparative chart The trademark infringement complaint concerned a comparative chart featuring both Hiccapop Bed and The Shrunks products, with comparative data on the features of both products. The data itself was not challenged. The complaint related to the unauthorized use of The Shrunks’ registered trademark in the chart. Basing itself on the landmark decision in Clairol International Corp. et al v. Thomas Supply and Equipment Co.,4 the Court concluded that Keezio’s comparative chart did not amount to “use” of The Shrunks trademark pursuant to s. 4(1) of the Trademarks Act, and that therefore said chart did not constitute trademark infringement. Accordingly, the Court determined that The Shrunks’ complaint that Keezio infringed its trademark was unfounded. The Court further concluded that the comparative chart was not contrary to section 22 of the Trademarks Act:5 The mere depiction of a competitor’s trademark in comparative advertising does not in itself depreciate the value of the goodwill attached to a product. (ii) The allegation of copyright infringement The copyright infringement notice contained six Amazon Standard Internal Catalog Identification Numbers (ASINs), which identified six webpages that were sales pages for the Hiccapop Bed. The Court ruled that the allegation of copyright infringement in question was unfounded, as it related to a bed, which is a useful article sold in a quantity of more than 50. The reproduction of the bed design was therefore not covered by subsection 64(2)6 of the Copyright Act. The Court found The Shrunks liable for the two complaints made in November 2019, which it determined to be false or misleading as the allegations of trademark and copyright infringement were unfounded. The Court stated that the complaints tended to discredit Keezio’s business because they misled Amazon into removing Keezio’s product listing pages. On this point, the Court referred to a passage from the Federal Court decision Yiwu Thousand Shores E-Commerce Co. Ltd. v. Lin.7 With regard to damages, the Court determined that Keezio’s evidence regarding the calculation of damages was inadequate on several counts, but nonetheless awarded damages based on a decrease in Keezio’s sales on the dates of delisting. The Court did not hold The Shrunks’ principal personally liable and did not grant a permanent injunction or punitive damages. It also dismissed The Shrunks’ counterclaim for copyright infringement, and ordered The Shrunks to pay Keezio costs, excluding taxes and disbursements. Comments This decision highlights how crucial it is for complainants to be serious when filing complaints. The complaints mechanism on platforms such as Amazon is an extremely useful and effective tool for reporting rights violations, provided that use of such mechanisms is made in good faith and based on solid legal foundations. Although such a mechanism is easy to use, the rights involved must absolutely be analyzed in advance, as an ill-founded complaint can result in harm—which can be considerable—especially when the platform has a global reach. In such a case, the removal of a webpage can result in significant damages. It is therefore essential to exercise due diligence, as a country-by-country analysis of rights can reveal different legal situations and rights holders from one country to another. Not only must competitors carefully consider and weigh their actions, but e commerce website operators must also be vigilant and respond promptly to requests for removal and geographic restrictions. Amazon recently experienced a situation like this when a UK court ruled against it.8 The decision dealt with a targeting operation on Amazon’s website, where sales offers or advertisements were intentionally directed at consumers in the UK where the trademarks were not owned in that country by the same company offering the products for sale. A word to the wise! See Bill C-63, the Online Harms Act, which establishes a regime to address such harm. Keezio Group, LLC v. The Shrunks' Family Toy Company Inc., 2024 BCSC 64. Section 7 of the Trademarks Act: Prohibitions 7. No person shall - make a false or misleading statement tending to discredit the business, goods or services of a competitor; - direct public attention to his goods, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his goods, services or business and the goods, services or business of another; - pass off other goods or services as and for those ordered or requested; or - make use, in association with goods or services, of any description that is false in a material respect and likely to mislead the public as to (i) the character, quality, quantity or composition, (ii) the geographical origin, or (iii) the mode of the manufacture, production or performance of the goods or services. Clairol International Corp. v. Thomas Supply & Equipment Co. 55 C.P.R. 176, 1968 CanLII 1280. Section 22 of the Trademarks Act: 22.Depreciation of goodwill - 22 (1) No person shall use a trademark registered by another person in a manner that is likely to have the effect of depreciating the value of the goodwill attaching thereto. Subsection 64 (2) of the Copyright Act: 64 (2) Non-infringement re certain designs Where copyright subsists in a design applied to a useful article or in an artistic work from which the design is derived and, by or under the authority of any person who owns the copyright in Canada or who owns the copyright elsewhere, - the article is reproduced in a quantity of more than fifty, or - where the article is a plate, engraving or cast, the article is used for producing more than fifty useful articles, it shall not thereafter be an infringement of the copyright or the moral rights for anyone, - to reproduce the design of the article or a design not differing substantially from the design of the article by (i) making the article, or (ii) making a drawing or other reproduction in any material form of the article, or - to do with an article, drawing or reproduction that is made as described in paragraph (c) anything that the owner of the copyright has the sole right to do with the design or artistic work in which the copyright subsists. Yiwu Thousand Shores E-Commerce Co. Ltd. v. Lin, 2021 CF 1040. See paragraph 58 of this decision: [58] I agree with ThousandShores that the Respondent made false allegations and misstatements to Amazon.ca in the Takedown Requests, at least one of which was made after the Respondent’s receipt of the October 2020 Letter. ThousandShores had no ability to respond directly to his allegations. The absence of any evidence of use of the OHUHU trademark by the Respondent and the likelihood of confusion between the parties’ marks means the Impugned Registration is invalid. Accordingly, the Respondent’s statements regarding the Impugned Registration, the inauthenticity of ThousandShores’ OHUHU Goods and its infringement of the Respondent’s rights were false. The statements clearly tended to discredit ThousandShores’ business, the OHUHU Storefront, and the OHUHU Goods. They misled Amazon.ca, causing it to remove ThousandShores’ listings for the OHUHU Goods with a resulting loss of profits. ThousandShores’ only recourse was to provide evidence of authorization or license by the Respondent, or to challenge the validity of the Impugned Registration. Lifestyle Equities CV and another v Amazon UK Services Ltd and others [2022] EWCA Civ 552, upheld by the Supreme Court on March 6, 2024 ([2024] UKSC 8).

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April 15, 2024

Can artificial intelligence be designated as an inventor in a patent application?

Artificial intelligence (“AI”) is becoming increasingly sophisticated, and the fact that this human invention can now generate its own inventions opens the door to new ways of conceptualizing the notion of “inventor” in patent law. In a recent ruling, the Supreme Court of the United Kingdom (“UK Supreme Court”) however found that an artificial intelligence system cannot be the author of an invention within the meaning of the applicable regulations under which patents are granted. This position is consistent with that of several courts around the world that have already ruled on the issue. But what of Canada, where the courts have yet to address the matter? In this bulletin, we will take a look at the decisions handed down by the UK Supreme Court and its counterparts in other countries before considering Canada’s position on the issue. In Thaler (Appellant) v Comptroller-General of Patents, Designs and Trade Mark,1 the UK Supreme Court ruled that “an inventor must be a person”. Summary of the decision In 2018, Dr. Stephen Thaler filed patent applications for two inventions described as having been generated by an autonomous AI system. The machine in question, DABUS, was therefore designated as the inventor in the applications. Dr. Thaler claimed that, as the owner of DABUS, he was entitled to file patent applications for inventions generated by his machine. That being so, he alleged that he was not required to name a natural person as the inventor. Both the High Court of Justice and the Court of Appeal dismissed Dr. Thaler’s appeal from the decision of the Intellectual Property Office of the United Kingdom not to proceed with the patent applications, in particular because the designated inventor was not valid under the Patents Act 1977. The UK Supreme Court, the country’s final court of appeal, also dismissed Dr. Thaler’s appeal. In a unanimous decision, it concluded that the law is clear in that “an inventor within the meaning of the 1977 Act must be a natural person, and DABUS is not a person at all, let alone a natural person: it is a machine”.2 Although there was no doubt that DABUS had created the inventions in question, that did not mean that the courts could extend the notion of inventor, as defined by law, to include machines. An ongoing trend The UK Supreme Court is not the first to reject Dr. Thaler’s arguments. The United States,3 the European Union4 and Australia5 have adopted similar positions, concluding that only a natural person can qualify as an inventor within the meaning of the legislation applicable in their respective jurisdictions. The UK ruling is part of the Artificial Inventor Project’s cross-border attempt to ensure that the DABUS machine—and AI in general—is recognized as a generative tool capable of generating patent rights for the benefit of AI system owners. To date, only South Africa has issued a patent to Dr. Thaler, naming DABUS as the inventor.6 This country is the exception that proves the rule. It should however be noted that the Companies and Intellectual Property Commission of South Africa does not review applications on their merits. As such, no reason was given for considering AI as the inventor. More recently, in February of this year, the United States Patent and Trademark Office issued a guidance on AI-assisted inventions. The guidance confirms the judicial position and states in particular that “a natural person must have significantly contributed to each claim in a patent application or patent”.7 What about Canada? In 2020, Dr. Thaler also filed a Canadian patent application for inventions generated by DABUS.8 The Canadian Intellectual Property Office (“CIPO”) issued a notice of non-compliance in 2021, establishing its initial position as follows: Because for this application the inventor is a machine and it does not appear possible for a machine to have rights under Canadian law or to transfer those rights to a human, it does not appear this application is compliant with the Patent Act and Rules.9 However, CIPO specified that it was open to receiving the applicant’s arguments on the issue, as follows: Responsive to the compliance notice, the applicant may attempt to comply by submitting a statement on behalf of the Artificial Intelligence (AI) machine and identify, in said statement, himself as the legal representative of the machine.10 To date, CIPO has issued no notice of abandonment and the application remains active. Its status in Canada is therefore unclear. It will be interesting to see whether Dr. Thaler will try to sway the Canadian courts to rule in his favour after many failed attempts in other jurisdictions around the world, and most recently in the UK Supreme Court. At first glance, the Patent Act11 (the “Act”) does not prevent an AI system from being recognized as the inventor of a patentable invention. In fact, the term “inventor” is not defined in the Act. Furthermore, nowhere is it stated that an applicant must be a “person,” nor is there any indication to that effect in the provisions governing the granting of patents. The Patent Rules12 offer no clarification in that regard either. The requirement implied by the clear use of the term “person” in the wording of the relevant sections of the law is important: It was a key consideration that the UK Supreme Court analyzed in Thaler. Case law on the subject is still ambiguous. According to the Supreme Court of Canada, given that the inventor is the person who took part in conceiving the invention, the question to ask is “[W]ho is responsible for the inventive concept?”13 That said, however, we note that the conclusion reached was that a legal person—as opposed to a natural person—cannot be considered an inventor.14 The fact is that the Canadian courts have never had to rule on the specific issue of recognizing AI as an inventor, and until such time as the courts render a decision or the government takes a stance on the matter, the issue will remain unresolved. Conclusion Given that Canadian law is not clear on whether AI can be recognized as an inventor, now would be a good time for Canadian authorities to clarify the issue. As the UK Supreme Court has suggested, the place of AI in patent law is a current societal issue, one that the legislator will ultimately have to settle.15 As such, it is only a matter of time before the Act is amended or CIPO issues a directive. Moreover, in addition to having to decide whether AI legally qualifies as an inventor, Canadian authorities will have to determine whether a person can be granted rights to an invention that was actually created by AI. The question as to whether an AI system owner can hold a patent on an invention generated by their machine was raised in Thaler. Once again, unlike the UK’s patent act,16 our Patent Act does not close the door to such a possibility. Canadian legislation contains no comprehensive list of the categories of persons to whom a patent may be granted, for instance. If we were to rewrite the laws governing intellectual property, given that the main purpose such laws is to encourage innovation and creativity, perhaps a better approach would be to allow AI system owners to hold patent rights rather than recognizing the AI as an inventor. Patent rights are granted on the basis of an implicit understanding: A high level of protection is provided in exchange for sufficient disclosure to enable a person skilled in the art to reproduce an invention. This ensures that society benefits from such inventions and that inventors are rewarded. Needless to say, arguing that machines need such an incentive is difficult. Designating AI as an inventor and granting it rights in that respect is therefore at odds with the very purpose of patent protection. That said, an AI system owner who has invested time and energy in designing their system could be justified in claiming such protection for the inventions that it generates. In such a case and given the current state of the law, the legislator would likely have to intervene. Would this proposed change spur innovation in the field of generative AI? We are collectively investing a huge amount of “human” resources in developing increasingly powerful AI systems. Will there come a time when we can no longer consider that human resources were involved in making AI-generated technologies? Should it come to that, giving preference to AI system owners could become counterproductive. In any event, for the time being, a sensible approach would be to emphasize the role that humans play in AI-assisted inventions, making persons the inventors rather than AI. As concerns inventions conceived entirely by an AI system, trade secret protection may be a more suitable solution. The professionals on our intellectual property team are at your disposal to assist you with patent registration and provide you with a clearer understanding of the issues involved. [2023] UKSC 49 [Thaler]. Ibid., para. 56. See the decision of the United States Court of Appeals for the Federal Circuit in Thaler v Vidal, 43 F. 4th 1207 (2022), application for appeal to the Supreme Court of the United States dismissed. See the decision of the Boards of Appeal of the European Patent Office in J 0008/20 (Designation of inventor/DABUS) (2021), request to refer questions to the Enlarged Board of Appeal denied. See the decision of the Full Court of the Federal Court of Australia in Commissioner of Patents v Thaler, [2022] FCAFC 62, application for special leave to appeal to the High Court of Australia denied. ZA 2021/03242. Federal Register: Inventorship Guidance for AI-Assisted Inventions. CA 3137161. Notice from CIPO dated February 11, 2022, in Canadian patent application 3137161. Ibid. R.S.C., 1985, c. P-4. SOR/2019-251. Apotex Inc.v. Wellcome Foundation Ltd., 2002 SCC 77 at paras. 96–97. Sarnoff Corp. v. Canada (Attorney General), 2008 FC 712, para. 9. Thaler, paras. 48–49, 79. Ibid., para. 79.

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February 8, 2024

Official marks in Canada: The prospect of upcoming changes

Before delving into the topic, let’s begin with a definition. Official marks are statutory instruments specific to Canadian practice. They are not trademarks per se, but are treated similarly, because they are adopted and used by a limited group of organizations including universities, Canadian public authorities and Her Majesty’s Forces.1 In this article, we will be focusing on Canadian public authorities. There are several hundred marks in the Register belonging to public authorities, including the federal and provincial governments, government agencies and municipalities. Unlike traditional trademarks, official marks do not protect specific goods or services, but instead cover all classes of goods and services. They may even be descriptive, as they are not required to be distinctive. Moreover, they are not registered in the usual sense of the word. Instead, a notice of adoption is simply published in the Trademarks Journal. One unique feature of official marks is that they are not subject to a renewal process. They can therefore remain in the Register indefinitely. That being so, official marks may hinder the registration of a trademark filed subsequently, unless the public authority concerned voluntarily withdraws the notice of adoption of its official mark. Lastly, it is important to note that official marks are not subject to examination or opposition proceedings. In other words, the Registrar of Trademarks (the “Registrar”) makes no official verification as to their validity or compliance with the standard registration criteria. Thus, because of the extensive protection afforded to official marks, they appear to be virtually unassailable. But is that really the case? The Registrar considers that they have no discretion to refuse to give public notice of an official mark, unless it has not been registered by a Canadian public authority or such authority has not adopted or used its official mark at the time of filing its application. When the Trademarks Act (the “Act”) was amended in June 2019, trademark professionals were hoping that the criteria providing these marks with extensive protection would be revised. However, Parliament chose not to undertake an in-depth review of the laws governing official marks. That being said, the Office of the Registrar did provide some clarification in October 2020 as to its practice regarding official marks. First, since 2020, the Registrar requires evidence of public authority status. This change was made further to several comments on the questionable status of certain so-called “public authorities.” The decision in Ontario Association of Architects v. Association of Architectural Technologists of Ontario (C.A.), 2002 FCA 218, clearly states that for a body to qualify as a public authority, the government must exercise a significant degree of control over its activities, particularly as relates to its governance and decision-making, and such activities must benefit the public. Given that the laws governing public authorities have been in force for several decades, it is reasonable to assume that many published official marks are no longer held by public authorities or no longer meet the criteria defining a public authority. What is the proper way to respond to an opposition based on the resemblance between an official mark and a trademark? The options are limited. It is important to remember that subsection 9(1) of the Act states that no person shall adopt in connection with a business, as a trademark or otherwise, any mark consisting of, or so nearly resembling as to be likely to be mistaken for, an official mark. The test is not based on a likelihood of confusion, as is the case when examining the likelihood of confusion between two trademarks. Instead, it is based on resemblance. Trademark professionals may argue that the applied-for mark is not identical or so similar to the official mark as to be confused with it. Another option—mainly in cases where the applied-for trademark is identical or very similar to an official mark—is to seek the consent of the official mark’s owner to use and register the trademark. In some cases, however, contacting a public authority may prove difficult, either because it no longer exists, or because it simply will not respond to requests for consent. Some public authorities ask for financial compensation in exchange for their consent. Can an official mark be contested? For the time being, there is no simple mechanism for contesting an official mark. The process of publishing a public notice of an official mark is not subject to opposition proceedings. Third parties have the option of contesting an official mark by means of an appeal or an application for judicial review to the Federal Court. They may do so in cases where an official mark was not adopted and used before the public notice was issued, or the body in question is not considered a public authority, or the official mark infringes on another mark. However, it should be noted that such proceedings are costly and take time. So what does the future hold? While the laws governing official marks remain essentially intact, some amendments are expected. The Canadian legislative authorities intend to add two new sections to the Act, namely sections 9(3) and 9(4). The purpose of these amendments is to clarify that even where a public notice has been issued concerning an official mark, such notice does not apply if the entity that requested it is not a public authority or no longer exists. In such circumstances, the Registrar may, on their own initiative or at a person’s request, give public notice that section 9 does not apply. Our understanding is that the Registrar will have new powers, including that of requesting—either on their own initiative or at the request of a person who pays the prescribed fee—that a so-called official mark be invalidated should its owner fail to respond to the Registrar’s notice requiring evidence of public authority status. This amendment to the Act should be introduced shortly. On another note, there were some interesting decisions handed down in 2023. KASAP TURKISH STEAKHOUSE & Design: The decision in The Board of Regents of the University of Texas System and EDAM Ltd., 2023 TMOB 161, clearly establishes the limitations of official marks when it comes to assessing the likelihood of confusion between two marks. The Board of Regents of the University of Texas opposed the application for the trademark KASAP TURKISH STEAKHOUSE & Design (hereinafter “Kasap”): in particular, on the grounds that the Kasap mark bore such a resemblance to the official mark of the University of Texas that it could be confused with its official mark as shown below: However, as previously mentioned, when assessing the resemblance between a trademark and an official mark, particular attention is paid to the similarity between the marks. The Trademarks Opposition Board concluded that the applicant’s applied-for mark did not resemble the official mark as to be likely to be mistaken for it, despite the presence of an image of a longhorn cow’s head in both marks. The distinctiveness of the word “KASAP” in the applicant’s mark was deemed sufficient to distinguish the two marks. As such, the opposition was rejected. A mark that includes an official mark along with other elements does not “consist of” that official mark. Via Rail Canada Inc. and Via Transportation, Inc., 2023 TMOB 155 This decision concerns an opposition filed by Via Rail Canada Inc. (the Opponent and owner of an official mark) against a trademark application submitted by Via Transportation, Inc. (the Applicant). The application was for the mark “VIA & Design” as shown below: for use in association with the transportation of passengers and related mobile application software and telecommunication services. The Opponent opposed the application based on an allegation that the mark caused confusion with its trademarks, official marks and trade names containing the word “VIA” and used in association with its national railway services and related goods and services. Ultimately, the Applicant’s application was rejected in part because the Applicant’s mark was not registrable under section 12(1)(e), as it was deemed too similar to the Opponent’s official “VIA” mark, which was likely to cause confusion. The hearing officer summarized the resemblance test as follows in paragraph 106: The resemblance test under section 9(1)(n)(iii) of the Act differs from a standard confusion analysis in that it requires a likelihood that consumers will be mistaken as between the marks themselves rather than a likelihood that consumers will be confused as to the source of the goods or services. In short, the general consensus is that the laws governing official marks in Canada could certainly use a thorough revision, one that would help weed out any marks cluttering up the register of official marks that no longer fit the definition. Examples of university official marks: Université de Montréal (0910712), Universität Heidelberg (0923735), Louisiana State University (0923069). It should be noted that universities are not required to be Canadian to request publication of an official mark. The Armed Forces have adopted several marks on behalf of Her Majesty, including PORTE DAUPHINE (0903172) & Design, SKY HAWKS (0903269) and CORMORANT & Design (0903170). More specifically, we refer to sections 9 and following of the Trademarks Act.

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