Don’t kill my buzz – does upcoming cannabis regulation in Canada present pitfalls for trademark applicants?
With the legalization of recreational cannabis use and the anticipated amendments to the Trade-marks Act eliminating “use” of a trademark as a condition for registration, the door appears to be thrown wide open for those seeking to register trademarks for cannabis and cannabis related products, building upon the 2000+ trademarks that have already been filed for goods and services in this budding field.
However, applicants with pending trademark applications covering cannabis and related products and services and applicants that have yet to file trademark applications for such goods and services should be wary of the pitfalls to registration that continue to exist.
First, whether filing an application under the current Trade-marks Act or after the legislative amendments repealing the use requirement come into force (likely in 2019), an applicant for the registration of a mark must still be entitled to use the mark in Canada in association with the designated goods and/or services. This “entitlement to use the mark” is deemed to mean a lawful use of the mark, i.e., a use fitting within the confines of any other legislation.
Second, the version of the Trade-marks Act currently in force requires applicants for the registration of a mark to include in their application a statement that they are satisfied that they are entitled to use the trademark in Canada in association with the goods and services described in the application. The critical date for determining whether an applicant is satisfied that it is entitled to use the mark in Canada is the date on which the application is filed.
With the implementation of the legislative amendments to the Trade-marks Act there will no longer be a requirement to include in the application an affirmative statement of entitlement to use the mark. However, entitlement to use the trademark in Canada will still be a requirement for a valid application, as expressed in the wording of Section 30(1), as amended:
30(1) Requirements for application – a person may file with the Registrar an application for registration of a trademark in respect of goods or services if they are using or propose to use, and are entitled to use, the trademark in Canada in association with those goods and services.
The subjective element of being “satisfied” of an entitlement to use the mark in Canada is notably absent from the above paragraph, suggesting that Section 30(1) is a purely objective consideration to be assessed as of the date the application is filed.
So why is entitlement to use a mark at the time of filing an application an issue for concern? Well for one, the cannabis industry will be heavily regulated, and the manufacture, distribution and/or sale of cannabis and cannabis products will require a government-issued license. This begs the question of whether an unlicensed applicant can claim to be satisfied of its entitlement to use a trademark in Canada in association with cannabis products or services? It might under the current legislation if the applicant has applied for a license and has no reasonable basis to believe that its application would be denied. But what about an application filed after the coming into force of the legislative amendments to the Trademarks Act, when Section 30(1) seems to suggest that only applicants that are objectively entitled to use the trademark in Canada in association with the goods or services (i.e., presently licensed to manufacture, distribute or sell cannabis or cannabis products in Canada) may file an application for the registration of a mark? Will such applicants be required to wait until they are licensed to file their trademark applications?
The question of entitlement to use the mark is not just limited to determining whether an applicant is licensed. Consider the confusing patchwork of cannabis packaging and labelling regulations that are being rolled-out, in particular the Federal packaging and labelling regulations for cannabis and cannabis products which include broadly worded provisions prohibiting the sale of cannabis in packages or with labels that:
depict persons, characters or animals, whether real or fictional;
evoke a positive or negative emotion about or image of, a way of life such as one that includes glamour, recreation, excitement, vitality risk or daring; or
contain any information that is false, misleading, or deceptive or that is likely to create an erroneous impression about the characteristics, value, quantity, composition, strength, concentration, potency, purity, quality, merit, safety, health effects or health risks of cannabis.
Many provinces have adopted additional regulations controlling the advertising and promotion of cannabis. For example, in Quebec, it will not be permitted to sell t-shirts with the design of a cannabis leaf.
A review of the 2000+ pending trademark applications for cannabis and cannabis products reveals a significant number of marks that might not comply with federal and/or provincial packaging and labelling regulations. Some of these marks include depictions of animals, celebrity names, words suggesting beneficial health effects and words evoking positive or negative emotions about a way of life.
While trademark examiners have sometimes considered whether a mark complies with other legislation when assessing the applicant’s entitlement to use the mark (e.g. compliance with the Bank Act and the Canada Post Corporation Act) there is yet no indication from the Trademark Office as to whether examiners will also assess entitlement to use the mark by querying whether the applicant or the mark complies with cannabis regulations. Regardless of whether the Examiner raises the question, it is possible to successfully oppose the registration of marks which do not comply with other statutes or regulations on the grounds that an applicant could not have been satisfied of their entitlement to use such a mark (see for example Canadian Bankers Assoc. v. Richmond Savings Credit Union (2000) 8 C.P.R. (4th) 267).
Applicants should keep in mind that entitlement to use is a crucial requirement of a trademark application both under the current legislative framework and under the proposed legislative amendments. While the concept of being lawfully entitled to use a mark is one which few applicants have likely given any thought to, it may yet prove to be the Achilles’ heel for applications filed by unlicensed applicants or covering marks do not comply with cannabis packaging and labelling regulations.