Proposed changes to the federal Economic Action Plan (EAP) could make local companies vulnerable to a form of corporate identity theft, say Surrey's business leaders.
Bill C-31, currently before the House finance committee, could reach the House of Commons for final reading as early as next week. Within the proposed legislative changes to the EAP is a change to the Trade-marks Act that would remove a requirement that applicants show prior use of a trademark as a condition of registration. Both the Surrey Board of Trade and the Downtown Surrey Business Improvement Association have spoken out against the potential changes, saying they open the door to trademark “squatters,” who can grab rights to trademarks and demand extortionate fees for them from their current unregistered owners.
Chris Thornley, president of Thornley Creative, a Surrey-based firm that has worked on such projects as the Cloverdale Rodeo's logo and the City of Surrey's new branding scheme, said the changes create the potential for problems like the domain name warehousing issue that's been around for years.
“I believe the Surrey Board of Trade is absolutely correct in viewing this fact as opening the door to a new variation of cyber-squatting,” said Thornley. “And if I may go further, the process is flawed by including this complex and technical issue as part of an omnibus bill. Sometimes you can mix apples and oranges, but in most cases it's prudent to keep them separate.”
Along with the Canadian Chamber of Commerce, the Surrey Board of Trade and the business improvement association want the government to remove the trademark provisions of Bill C-31 pending further study. They're also asking for a committee to be formed to study the modernization of the Trade-marks Act, which came into law in 1985.
Christopher Bettencourt, an associate lawyer and trademark agent at McQuarrie Hunter LLP in Surrey, said the proposed legislative changes worry him.
“The way the system works now is if you register a trademark and you don't use it, then you basically lose that right and it frees it up for someone else who is going to use it. So that is quite a significant shift in the law.”
However, the Canadian chamber said its concerns are falling on deaf ears.
“We're not getting significant traction with any politicians to have them amend this provision,” said Scott Smith, director of intellectual property and innovation policy with the chamber.
“The government is proposing to make major changes to the Trade-marks Act, changes that will move us in the opposite direction of the U.S., our largest trading partner. They crafted these changes without consulting business, the people who actually use the system. Now that the proposals have been made public, they are ignoring the advice of business, trademark practitioners and the international IP community.
“If the government proceeds with this plan, it will result in increased risk and cost to Canadian businesses.”
There are other noteworthy changes, Bettencourt said. Under the new legislation, trademarks will expire after 10 years instead of 15, and listing costs will also potentially increase for companies that have a wide variety of products. Bettencourt said business owners should educate themselves about this issue right away.
“What I would probably alert people to is if they haven't considered their trademarks, then what they should be doing is really turning their mind to it now.”
