Prove It or Lose It: Trademark Registrar Initiates Proof-of-Use Proceedings

The Registrar of Trademarks (Registrar) can now request that owners of trademarks registered with the Canadian Intellectual Property Office (CIPO) submit proof of use of certain trademarks or face expungement of those marks under section 45 of the Trademarks Act (Act).

On December 16, 2024, the Trademarks Opposition Board (TMOB) announced that it was initiating a pilot project under section 45 of the Act. Starting in January 2025, the Registrar will randomly select batches of registered trademarks that meet certain criteria and require that their owners submit evidence of use of the mark. Prior to this project, section 45 proceedings had to be initiated by third-party applicants.

The Registrar will issue 100 notices in January and 50 each in February and March, with the quantity of notices issued in April and afterwards to be determined. Once a statistically significant number of these section 45 proceedings have concluded, the TMOB will organize consultations to gather feedback that will help determine whether the pilot project should continue.

This bulletin highlights the policy underpinning this new pilot project, the basics of its operation, and how these changes could impact trademark owners, licensees and other stakeholders.

Changes to Section 45 Proceedings 

Purpose

The pilot project’s stated goal is to ensure that the Register of Trademarks (Register) provides an accurate representation of the trademarks in use and their association with the goods and services listed. This is rooted in the Registrar’s stated objective of upholding the trademark system’s integrity and fostering fair competition by decluttering the Register for businesses aiming to create new brands. By allowing the Registrar to require proof of use, this project will help to provide data on the number of registered trademarks no longer in use.

How the Pilot Project Works

Categories of Selection

The Registrar will randomly select registrations, requiring the owners of registered trademarks that have been on the Register for over three years to submit evidence of trademark use or, where applicable, justification for non-use based on special circumstances from the following categories: (1) registrations based on use; (2) registrations based on proposed use for which a declaration of use was filed; (3) registrations based on use and registration abroad; (4) registrations with multiple bases; and (5) remaining registrations registered for more than three years.

Registrations that will not be subject to Registrar-initiated section 45 proceedings include those where the Registrar has no authority to initiate the proceedings, such as when a registration has been on the register for less than three years, where the registration has already been expunged or cancelled or where there are good reasons for the Registrar not to issue a section 45 notice, such as when a notice would be frivolous or where a registration is already the subject of a section 45 proceeding that is pending or on appeal.

Response to Selection of a Registration

A registered owner who has received a section 45 notice will have three months from the date of the notice to submit evidence demonstrating the use of the registered trademark in Canada within the three years preceding the notice with respect to each of the goods or services specified. The evidence must establish that the trademark is being used by the registered owner, an assignee or a licensed party.

Where the use of a trademark was licensed to a licensee, the registered owner may include a statement to that effect in the affidavit or statutory declaration establishing that it has direct or indirect control over the character or the quality of the licensed goods or services. Alternatively, the registered owner may consider submitting supporting evidence, such as the license agreement, or evidence of their active control, such as training materials provided to the licensee.

In the absence of such use, the submission must include the date of the last use and the reasons for the non-use. These reasons must be considered unusual, uncommon or exceptional circumstances by the Registrar to prevent the registration from being cancelled.

What Does This Mean for Your Trademark?

While it has always been good practice for owners of a trademark registered in Canada to use their registered marks within the three-year period after registration (and afterwards), this pilot project increases the possibility of a registered trademark becoming subject to a section 45 proceeding.

If you or your business owns, or otherwise uses, a trademark registered in Canada, consider the following:

• As the owner of a registered trademark, consider consulting with a trademark agent or lawyer to determine the best form of proof of use to keep on hand for your specific trademark. The evidence required under a section 45 proceeding will vary based on the goods and/or services specified in your trademark registration. It is not enough to use a registered trademark — the correct evidence must be submitted to prove such use.
• As the licensor of a registered trademark to a third party, consider including additional language in your licensing agreement relating to obligations of use and submission of evidence thereof.
• As a potential purchaser of or investor in a business with valuable registered trademarks, consider verifying that the business is in a position to respond to a section 45 proceeding.

For more information, please contact the authors of this bulletin or any member of our Intellectual Property group.