The Madrid Protocol’s impact on the Canadian IP landscape

Though cost effective, Canadians may take a more conservative approach in use, says Oyen Wiggs' Christina Kwok

The Madrid Protocol’s impact on the Canadian IP landscape

This article was produced in partnership with Oyen Wiggs Green & Mutala LLP.

Now three-and-a-half years after its 2019 implementation the Madrid Protocol has had various impacts on the Canadian intellectual property landscape, and Canadians may be taking a more conservative approach when it comes to using this centralized system to obtain trademark protection in multiple countries, says Oyen Wiggs’ Christina Kwok.

According to the Canadian Intellectual Property Office (CIPO), the Madrid Protocol offers businesses and innovators the possibility of obtaining trademark protection in more than 100 countries by filing one single international application – in one language and with one overall payment in one currency, the Swiss Franc – with the World Intellectual Property Organization (WIPO). Applications are then examined according to the legislation and laws existing in each of the countries designated in the international application. A Canadian entity must first file a basic application with CIPO. Once the basic application or basic registration is in place, an Application for International Registration is filed with CIPO which acts as the Office of Origin for certification and transmission to the WIPO. The international registration is dependent on the basic application or registration for a period of five years after the Application for International Registration is filed. If the basic application fails for any reason – if it’s withdrawn, abandoned, or refused for example – it impacts the international registration.

“Registering a trademark in multiple countries through the Madrid system is simple and cost effective: it’s one application, in one language and a single set of filing fees and it’s not necessary ­– unless or until you receive a refusal – to retain local counsel in each designated country at the outset,” says Kwok, senior associate at the firm. “But it’s on a case-by-case basis whether or not I recommend my Canadian clients to use the system.”

One of the circumstances in which Kwok may not recommend a client to seek trademark protection in multiple countries through the Madrid system is if the client’s trademark may be considered to lack inherent distinctiveness (and that the trademark has not been so used throughout Canada to have acquired distinctiveness with its associated goods and services as of the application filing date). A trademark’s distinctiveness is an examination criterion that was introduced into the Trademarks Act at the same time Canada became a Contracting Party to the Madrid Protocol  on June 17, 2019. For a trademark to be registrable, it must be “distinctive” – for example, it can’t monopolize a common word used in the trade and shouldn’t refer the consumer to a multitude of sources. “Distinctive” is defined under s. 2 as “a trademark that actually distinguishes the goods or services in association with which it is used by its owner from the goods or services of others or that is adapted so to distinguish them.” Section 4.9 of CIPO’s Trademarks Examination Manual states that the examiner must answer two questions from the perspective of the average Canadian consumer:

  1. Should other traders be able, in the ordinary course of business, to use the same mark with the same goods or services?
  2. Is there use of the mark in Canada by others in the trade such that the public would not respond to the mark as identifying one source?

“It’s a substantial burden for applicants because it is common for individuals or companies to choose a trademark which consists of words or expressions that somewhat suggest the associated goods or services,” Kwok says, adding if an objection is raised, the options to overcome it are to argue against the examiner’s allegation, or to file evidence to show that the trademark has acquired distinctiveness across Canada at the time of filing the Canadian application, which is difficult given in many cases the client is filing a proposed trademark that has yet to be used in Canada, or a trademark that has not yet been extensively used across Canada.

The evaluation of whether a trademark lacks inherent distinctiveness is a fairly subjective exercise and much depends on the examiner assigned to the application. In Kwok’s experience, there are some who, once they’ve raised the objection, are difficult to convince to withdraw it. The issue is further complicated by the fact that the examination criterion is relatively new and there hasn’t been case law built yet, meaning examiners tend to err on the stricter application of the test.

If you can’t get around an examiner’s objection, the basic application is refused and the international registration, which is tied to it, will be cancelled as well. Applicants do have three months from the date of cancellation of the international registration to transform their international registration into national or regional applications in the designated countries, and such applications  will be treated as if had been filed on the date of the international registration and will benefit from any priority that was claimed in the international registration, “however, that increases cost – and the purpose of using the Madrid system is that it provides a more cost-effective approach,” Kwok notes.

“Considering the trademark as a whole with the associated goods and services, if it would likely attract a lack of inherent distinctiveness refusal, it may be preferable to file national or regional applications directly before the foreign offices concerned rather than through the Madrid system.”

On the other side of the equation, Canada seems to be a popular country for foreign applicants to designate through their international registrations, and that popularity is having an interesting impact. According to WIPO’s IP Statistics Data Center, Canada ranks in the top five, coming after the UK, Europe, US, and China in terms of the number of total designations in registrations and subsequent designations in 2021. For example, over 20,000 filings have designated Canada in 2021. The issue with this volume is that to meet its obligations under the Madrid Protocol, the CIPO must send a Total Provisional Refusal within 18 months of being notified of a Canada designation, meaning these filings are receiving priority in examination compared to national applications filed directly in the CIPO, resulting in an increasing and significant delay in processing such national applications. As of November 30, 2022, CIPO announces on its website that the office is examining national applications (not using the pre-approved list of goods and services) with an application filing date of March 8, 2019 versus July 15, 2021 for Madrid designated filings.

Though it’s a good thing Canada is a popular country for foreign applicants to seek trademark protection, for Canadian applicants filing national applications with CIPO – who have to file that basic application first even if they intend to go through the Madrid system – the unintended consequence is that they will experience a long delay, Kwok says.

“There are significant pros and cons to the Madrid system and we’re seeing more of its impact as time goes on.”

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