Guest authors John H. Simpson & Shan Arora of Shift Law discuss the current landscape of cannabis trademark applications in Canada.
On October 17, 2018, the sale of recreational cannabis became legal in Canada and the “green rush” to profit from the industry is on. For many months, industry players have been hurrying to stake claims to market share and to various forms of intellectual property rights in recreational cannabis products and services. However, when it comes to selecting and protecting cannabis-related brand names, in reality, the “green rush” has become a game of hurry up and wait.
Currently, there are approximately 2200 trademark applications pending in the Canadian Intellectual Property Office (CIPO) with claims for cannabis or cannabis-related goods or services that have yet to be examined. This backlog of applications is partly responsible for the increasingly lengthy processing time for Canadian trademark applications. It is now taking more than 12 months for a first examiner’s report on a trademark application and the total time from filing to registration is now about 18-24 months.
The vast majority of these applications were filed prior to legalization on the basis of “proposed use,” meaning the applicant has not yet used the mark with the applied-for goods or services as of the filing date. Filing proposed use applications is a wise strategy. During examination at the CanadianTrademark Office, as in the U.S., the first person to file an application has priority over subsequently filed confusingly similar proposed use trademarks. The examination considers all trademark applications for a likelihood of confusion with trademarks in prior-filed applications and registrations.
At the outset, the Canadian Trademark Office is already dealing with high volumes and backlog because of significant amendments to the Trade-marks Act that are set to come into force in June 2019. Notably, the amendments include removing the requirement that a trademark be used in commerce before a registration will issue. This change has prompted a wave of speculators applying to register trademarks for every good and service under the sun. While applicants must check a box declaring a bona fide intention to use the trademark with all of the claimed goods and services, it seems likely that many of these speculators are trolls, who intend to squat on or sell the trademarks rather than use them. The backlog could leave many applications in limbo for years to come. This is bound to frustrate many cannabis businesses that are eager to settle on and secure rights in their brand names.
With so many applications being filed concurrently for the same goods and services, there are bound to be conflicts that will need to be resolved. If a trademark is deemed confusingly similar with another mark that is the subject of an earlier application or issued registration, the application will be refused with an opportunity for the applicant to file submissions to overcome the objection. And, let’s face it, there are only so many distinctive variations of marks containing CANN-, CANNA-, BUD, LEAF, GREEN, 420, and other similar marijuana or cannabis suggestive affixes.
As in the U.S., approved applications may be opposed by other trademark owners. Keep in mind, there may also be strategic reasons for a brand owner to oppose a competitor’s application that have little to do with the merits of the opposition.
Another common reason for rejections—and increasingly so these days—is how goods and services are described in trademark applications. Though the current Goods and Services Manual is a reliable guide for describing a huge range of goods and services, not surprisingly, it is less helpful when it comes to new things—and old things that used to be, but are no longer, illegal to sell. For these unique items, the Canadian Trademark Office may require time to determine what“ordinary commercial terms” it will accept (for instance, “weed” is unlikely to be accepted). Pending applications describing every imaginable cannabis-related product or service may be the subject of extended review, and many will likely require revised goods and services descriptions.
Meanwhile, cannabis brand owners face additional uncertainties as to whether they will get to use the trademarks they seek to register. While trademark applications are in process, Health Canada is working on regulations to restrict the kind of branding that cannabis companies can even use in association with their products.
While some restrictions are clear, such as the restriction on marks that appeal to children (even if a registration for such a mark issues) or on using a celebrity name, much of the proposed legislation is impossibly vague. For example, the proposed Cannabis Act prohibits the use of a trademark that “evokes 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.” Whatever that means . . .
In short, the “green rush” to secure cannabis-related brand names inCanada is moving at a glacial pace, which is to be expected in an emerging market of this scale and significance. While approximately 2200 cannabis trademark applications are already pending, filing applications in Canada sooner, rather than later, will get you in the queue.
John Simpson is the Principal and founder of Shift Law.John is an experienced and highly regarded Toronto trademark lawyer, copyright lawyer, licensing lawyer and litigator in all areas of intellectual property, including confidential information and publicity rights.