Should U.S. Cannabis Companies Seek Trademark Protection in Canada?

03 Feb Should U.S. Cannabis Companies Seek Trademark Protection in Canada?

With Canada’s new trademark law set to take effect on June 17, 2019, U.S. cannabis companies should be considering whether it makes sense for them to file for trademark protection in Canada.

Most significantly for foreign applicants, a Declaration of Use will no longer be required, meaning that you do not need to actually use your mark in Canada in order to qualify for trademark protection. This is in contrast to the United States, where trademark registration requires proof of lawful use in commerce. The upside to this regulatory shift is that U.S. companies can get a jump on procuring Canadian trademark protection prior to entering the Canadian market. But the inevitable downside is that trademark trolls will now have an open door to “squat” on trademarks that are used by companies in other countries. These trolls often aim to force companies into negotiations for use of trademark rights to their own brand. Filing for protection in Canada will be an important tool for U.S. cannabis companies to avoid such a scenario.

Furthermore, cannabis goods can be specified in any Canadian trademark application. “The following terms are, at this time acceptable by the Office: ‘dried cannabis’ or ‘dried marijuana,’ ‘live cannabis plants,’ ‘medicinal marijuana for temporary relief of seizures,’ ‘medicinal marijuana for temporary relief of nerve pain.’” “Cannabis oil,” however, is not acceptable. It is important that the language used in your specification comports with the Canadian Goods and Services Manual.

Another notable change to Canada’s trademark law is that a range of non-traditional types of marks will now be registrable, including scents and tastes, holograms, moving images and textures.

Remember, though, that even though it is relatively straightforward to obtain a trademark for cannabis goods or services in Canada, there are many restrictions placed on how those cannabis trademarks can be used via the cannabis regulatory framework. For example, cannabis trademarks may not be used to promote cannabis goods:

• In a manner that appeals to children;
• By means of a testimonial or endorsement;
• By depicting a person, character or animal, whether real or fictional;
• By presenting the product or brand elements in a manner 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;
• By using information that is false, misleading or deceptive, or that is likely to create an erroneous impression about the product’s characteristics, value, quantity, composition, strength, concentration, potency, purity, quality, merit, safety, health effects or health risks;
• By using or displaying a brand element or names of persons authorized to produce, sell or distribute cannabis in connection with the sponsorship of a person, entity, event, activity or facility, or on a facility used for sports, or a cultural event or activity; and
• By communicating information about price and distribution (except at point of sale).

Because of the removal of the Declaration of Use requirement in particular, we strongly urge all of our cannabis clients to consider applying for trademark protection in Canada. If you fail to do so, someone else may beat you to it, preventing you from obtaining any right to use your brand in the Canadian market.