Articles

Opposition proceedings were introduced into Canada's trade mark legislation just over 50 years ago. While the opposition process functioned relatively well for the first few decades, such has not been the case recently. Gary Partington and Coleen Morrison examine what changes lie ahead

looking to a brighter future

Despite a positive start for the trade mark opposition process today oppositions in Canada are generally viewed as being lengthy and, in turn, costly for the parties involved. Apart from the fee increase from $150 to $400 in January 2004, there have not been any key changes to section 45 proceedings in the past 10 years. Moreover, there do not appear to be any notable changes forthcoming in the foreseeable future. Consequently, this article will focus primarily on oppositions.

the facts

Both oppositions and section 45 summary cancellation proceedings are administered by the Trade-marks Opposition Board, with the section 45 area being a division of the Board. There are no provisions in either the Trade marks Act or the Trade marks Regulations relating to the existence of the Opposition Board. Rather, this is a name used to collectively identify the chair and the hearing officers, at the moment numbering seven, who have delegated authority from the Registrar under Act to conduct hearings and render opposition and section 45 decisions. The Board includes a support staff of 10.

Oppositions and section 45 proceedings are intended to be summary proceedings although oppositions are rarely con¬cise. As noted in the 1998 Review of the Trade marks Opposition Process, pre-pared by Richard Gill of Alderson-Gill & Associates Consulting, the average opposition that is filed in Canada takes two-and-a-half years to be resolved once the statement of opposition is filed. Furthermore, of the fewer than 15% of opposition cases which proceed to a final decision, 55% last more than four years. In addition to applicant and opponent demographics and opposition characteristics, the research findings in the Gill Review provided interesting data concerning the opposition process. The study also included an analysis of over 500 responses to 1,800 questionnaires forwarded to parties involved in completed oppositions, as well as summarized results of inter-views with a sampling of trade mark agents.

It would seem prudent to pay heed to the Gill Review when contemplating possible changes to opposition practice. While the report was completed more than eight years ago, the broad scope of the study and the absence of any significant changes to the opposition process in the interim support the position that Gill's findings are relevant today. The only intervening changes having an impact on oppositions are the tripling of the opposition fees to $750 in January 2004, the increased fees for extensions of time, and the hiring of three additional Board Members. In spite of the additional resources, there has not yet been much improvement in the delays experienced in oppositions. Nevertheless, as noted below, there have been some efforts to review and modify the opposition process.

new procedure

Two decisions of the Federal Court of Canada, Novopharm Ltd v Ciba-Geigy Canada Ltd and Novopharm Ltd v AstraZeneca AB have resulted in the introduction of a procedure whereby Board members now assess the sufficiency of statements of opposition on an interlocutory basis when an applicant has objected to one, or more, of the grounds of opposition. It may be merely a matter of time before a deci¬sion of the Federal Court will oblige the registrar to make interlocutory rulings on matters of evidence and cross-examination issues arising during the opposition process. Previously, interlocutory rulings with respect to evidentiary issues and cross-examination matters were routinely made by hearing officers. However, several years ago, these rulings were deferred until the final decision in view of the limited number of hearing officers available. As matters of evidence tend to be somewhat complex, any change to opposition practice, whereby interlocutory rulings on matters of evidence or cross-examination are addressed during the proceeding, would significantly alter the face of oppositions in Canada by adding to the complexity and length of the process. Apart from the interlocutory rulings on the sufficiency of pleadings, other opposition procedures are currently under review. A Notice published in the Trade-marks Journal of October 5 2005 invited comments on the following proposed amendments to the Opposition Practice Notice:

service of documents by courier delivery

Subsection 37(1) of the Trade-marks Regulations provides that any statement or other material required to be served in an opposition proceeding may be served on the party, its trade mark agent, or its representative for service, either personally or by registered mail. The proposed change in practice would constitute service of documents by courier delivery to be personal service if delivered to the person in accordance with the rules pertaining to personal service under the Federal Court Rules. This practice modification would simplify the service of evidence during opposition proceedings. In view of the 500 gram weight limit for materials that may be forwarded by registered mail, agents routinely seek consent from opposing trade mark agents to permit service by courier. Otherwise, evidence must be served personally on the other party which adds unneces¬sary expense to the proceedings.

conducting cross-examination without requiring personal attendance

The general practice of the registrar in opposition proceedings has been to require the personal attendance of a deponent for cross-examination. However, on receipt of a detailed submission, the chair of the Opposition Board on December 19 2003 directed that the cross-examination of the deponent residing outside of Canada take place by video conference. The ruling is consistent with the proposed change in oppo¬sition practice, whereby the registrar, on an exceptional basis, could direct that a cross-examination be conducted by video conferencing or other electronic means. Such a request would not be limited to situations where a deponent is located out-side of Canada. Further, the costs of the setup and operation of the videoconference or other electronic equipment necessary to conduct the cross-examination would be the responsibility of the party requesting this form of cross-examination.

We expect that this practice change, if implemented, will result in an increase in the number of rulings in opposition cases involving cross-examinations of non-resident deponents. Moreover, this ruling suggests that the chair and Board members are willing to reconsider established practices relating to cross-examination rulings with the view to simplifying procedures.

reducing time limits following a cross-examination order

The third proposed change in practice relates to the reduction in the extension of time for filing evidence following comple¬tion of a cross-examination from four months to two months where the party carrying the order fails to proceed with the cross-examination. This practice change is relatively minor in nature but might serve to discourage parties from requesting orders for cross-examination as a means of extending the time limit for filing their evidence in the opposition.

more changes

In addition to the practice changes presently under consideration, the decision in Effigi Inc v Canada (Attorney General) may have an indirect impact on oppositions in Canada. The Effigi decision established that the registrar, when assessing entitlement at the examination stage of a trade mark application, should not consider the claimed dates of first use as relevant under the Act. As a result, the applicant whose pending application has an earlier actual or deemed filing date will be considered the person entitled to registration of a trade mark over the applicant whose confusing trade mark is covered in a pending application having an earlier use date but a later filing date.

The Effigi decision obliges the applicant having the earlier claimed date of first use but the later filing date to oppose the application having the earlier deemed or actual filing date. However, the opponent would be able to maintain its trade mark application pending at the examination stage by request¬ing extensions of time until the opposition is resolved. The decision alters Canadian practice since an applicant can no longer afford to be lax in respect of placing a trade mark application on file. Any undue delay in filing enhances the likelihood that an applicant will have to battle for its rights against others who have filed, but not previously used, a mark. This is generally bad news for small and mid-sized businesses which may be only in a position to formally protect trade mark rights some time after commencing use of a mark. Unfortunately, it is also these entities which are less likely to be able to fund oppositions. The current oft-employed strategies regarding the collection and filing of opposition evidence might undergo a change in the near future as well. In Cross-Canada Auto Body Supply (Windsor) Limited v Hyundai Auto Canada (2005) Justice von Finckenstein held that affidavits containing large amounts of substantive evidence and prepared by a student or by law clerks were inappropriate inasmuch as the same directing mind was behind both the evidence and the pleadings. Rule 42 of the Federal Court Rules, which precludes counsel from arguing on an affidavit sworn by that same counsel, was held to pertain equally to persons in the employ of counsel's firm. Even if the Opposition Board refrains from applying this interpretation of Rule 42, parties could find themselves with difficulties in respect of affidavits in the name of members of their firms in the event of an appeal. The decision did not go so far as to require removal of the solicitors of record but did require the party in question to retain alternative counsel. The Cross-Canada decision is under appeal. But if it is upheld, it stands to increase costs for participants in oppositions or appeals as it is more cost-effective to prepare affidavits within a firm than it is to retain other professionals. A secondary concern is the potential for more conflicts of interest if firms must exchange professional services to prepare affidavits. The Canadian Opposition process may be contrasted to that available under the Community trade mark (CTM) System. The CTM was established 10 years ago and, in this relatively short time, has had considerable influence on the opposition procedures in a number of countries.

Although a relatively high number of CTM applications are opposed, more than 20%, most are settled by agreement. While it can take many years for a decision to issue, the speed of the process is determined largely by the protagonists. There is an opportunity to make use of the 'cooling-off' provisions, now capped at two years — a novel feature now copied by other countries such as the UK. Might a cooling off period or some form of alternate dispute resolution, as proposed in the Gill Review, improve Canadian opposition practice? The Office for Harmonization for the Internal Market (OHIM) follows the civil law procedure of relying on the writ-ten submissions of the parties. Although a hearing and cross-examination are theoretically possible, in practice this is discouraged, thus effectively controlling costs. In Canada, there is little incentive to avoid cross-examination and oral hearings. Indeed, these procedures can be used by parties to delay or increase costs. The UK Trade Mark Office has adopted a more radical approach. Pleadings are now reviewed on filing and the opposition is not admitted until the issues are clearly defined. Where the opponent relies on prior statutory rights, the Office now issues a 'preliminary indication' of whether the opposition is likely to succeed or fail on these grounds. This is given shortly after the counter-statement is filed and before evidence is submitted. It is expected that this procedure will bring many oppositions to a speedy and less costly conclusion by avoiding the preparation and filing of evidence. Again, might some form of preliminary indication improve the Canadian opposition process?

The authors wish to thank Pen Hoseford of Marks & Clerk's London office for the comparative information regarding the UK and European Community.