Trademark distinctiveness is an examination criterion that was introduced to Canadian trademarks law on June 17, 2019, the day on which amendments to the Trademarks Act[1] came into force. Since June 17, 2019, the Registrar has the authority under paragraph 37(1)(d) of the Trademarks Act to refuse registration of a trademark if he is satisfied that “the trademark is not distinctive”.

Paragraph 32(1)(b) of the Trademarks Act allows the Registrar to raise an objection to an application on the basis that a trademark is not inherently distinctive, stating as follows:

An applicant shall furnish the Registrar with any evidence that the Registrar may require establishing that the trademark is distinctive at the filing date of the application for its registration if … the Registrar’s preliminary view is that the trademark is not inherently distinctive.

“Distinctive” is defined under section 2 of the Trademarks Act 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 the Canadian Intellectual Property Office (“CIPO”)’s Trademarks Examination Manual provides some guidance as to when a CIPO examiner would object to a trademark as lacking inherent distinctiveness under paragraphs 32(1)(b) and 37(1)(d). According to the Examination Manual, in assessing whether a trademark is inherently distinctive, a CIPO 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?

The Examination Manual provides examples of trademarks which the CIPO would generally consider to have no inherent distinctiveness, including[2]:

• Trademarks that serve only to provide general information about or on any goods or services.
• Trademarks which are clearly descriptive or deceptively misdescriptive of their associated goods and/or services in English or French under paragraph 12(1)(b) of the Trademarks Act.
• Trademarks which are primarily merely the name or surname of an individual who is living or who has died within the preceding thirty years under paragraph 12(1)(a) of the Trademarks Act.
• Trademarks which are primarily geographic locations.
• A trademark that consists of a design common to the trade, unless it is depicted in a special or fanciful manner.
• A trademark that is a word for a colour in relation to goods that would ordinarily or typically be that colour.
• Single letter or number trademarks.
• Trademarks consisting of laudatory words and phrases.
• A trademark that consists of a numerical phone number.

As per the CIPO examination guidelines, there is no need for an examiner to show that the same trademark is currently being used in the marketplace in order to raise a lack of inherent distinctiveness objection; the examiner only needs to have some basis to believe that other traders would likely use the same trademark in the marketplace. In view of the CIPO’s examination guidelines, CIPO examiners are certainly given broad latitude to raise a lack of inherent distinctiveness objection. Not surprisingly, many lack of inherent distinctiveness objections have been raised by CIPO examiners since June 17, 2019.

Under paragraph 32(1)(b), an applicant that is faced with a lack of inherent distinctiveness objection may try to overcome the objection by furnishing evidence, in the form of an affidavit or a statutory declaration, to establish that the trademark had acquired distinctiveness in Canada at the filing date of the application. However, many trademark applications are filed before or shortly after commencing use of the trademark in the Canadian marketplace. Clearly, such applicants could not take advantage of the paragraph 32(1)(b) saving provision. Further, when claiming that the trademark has acquired distinctiveness in Canada at the filing date, the applicant must show that the trademark has achieved secondary meaning across Canada. If the applicant’s evidence only shows that the mark has become distinctive in some, but not all, areas of Canada, the Registrar can restrict the registration to the goods or services in association with which, and to the defined territorial area in Canada in which, the trademark is shown to be distinctive[3].

If evidence to establish distinctiveness at the filing date of the application is not available, the applicant’s best option (rather than simply abandoning the application) would be to argue against the lack of inherent distinctiveness objection.

The Examination Manual specifies that “the phrase ‘not inherently distinctive’ in paragraph 32(1)(b) refers to a trademark having ’no inherent distinctiveness‘ (not registrable) as opposed to a trademark possessing a ‘low degree of inherent distinctiveness’ (registrable).”[4] In other words, a trademark needs only to possess some inherent distinctiveness, even a low degree, to be registrable.

In the context of determining confusion between two marks, the Trademarks Opposition Board has held that the following trademarks possess little inherent distinctiveness:

• INSTACRADLE for use in association with goods which include “instant, or readily installable, floor cradles”: InstaFibre Ltd. v Q.E.P. Co., Inc., 2019 TMOB 146 at paragraph 34.
• CAMPING WORLD for use in association with services which include “the sale and service of RVs and related accessories which are used for camping”: CWI, Inc. v G N R Travel Centre Ltd., 2020 TMOB 113 at paragraph 48.
• SMARTCLOUD for use in association with services which include “cloud computing services”: Smart Cloud Inc. v International Business Machines Corporation, 2019 TMOB 78 at paragraph 84.
• ELEVATED EATS for use in association with goods which include “fresh flowers, fresh vegetables and fresh fruits”: PROsnack Natural Foods Inc. v Frank Ferragine, 2020 TMOB 147 at paragraph 23.
• GLUCOWISE for use in association with goods which include “nutritional and dietary supplements for regulating blood glucose levels”: Jamieson Laboratories Ltd. v Omega Alpha Pharmaceuticals Inc., 2020 TMOB 30 at paragraph 51.

To emphasize, the Trademarks Opposition Board merely commented that each of the above trademarks possess little inherent distinctiveness (which is registrable), and is not without any inherent distinctiveness. Guided by these Opposition Board decisions, trademarks that are at least as distinctive as, or are more distinctive than, the above-mentioned highly suggestive trademarks should likewise be registrable. It remains to be seen if CIPO examiners will take into account these Opposition Board decisions in determining whether a trademark lacks inherent distinctiveness, since those were decided in the context of trademark confusion.

Conclusion

The CIPO’s lack of inherent distinctiveness examination criterion is troublesome for applicants who wish to register a trademark which is somewhat suggestive of the associated goods and services. We await further guidance from the Trademarks Opposition Board or the Court. Until then, applicants should be aware of this examination criterion, and commence using their trademarks throughout Canada as soon as possible, potentially before filing an application, to acquire distinctiveness if the mark is not clearly inherently distinctive.

[1] Trademarks Act, R.S.C., 1985, c. T-13.

[2] CIPO Trademarks Examination Manual, section 4.9.5 “Examples”.

[3] Trademarks Act, paragraph 32(2).

[4] CIPO Trademarks Examination Manual, section 4.9.3 “Inherently distinctive”.

Pending amendments to Canada’s Trademarks Act that restricts the current official mark scheme may provide another strategy for applicants who wish to register marks that may be confusing with an official mark.

Currently, in Canada the rights and protections of official marks are enumerated in section 9(1)(n)(iii) of the Trademarks Act as follows:

No person shall adopt in connection with a business, as a trademark or otherwise, any mark consisting of, or so nearly resembling as to be likely to be mistaken for, any badge, crest, emblem or mark adopted and used by any public authority, in Canada as an official mark for goods and services, in respect of which the Registrar has, at the request of Her Majesty or of the university or public authority, as the case may be, given public notice of its adoption and use.

In short, if the Registrar of Trademarks (the “Registrar”) gives public notice of adoption and use of an official mark by a public authority, no other person can use or adopt that mark or anything that nearly resembles that mark. This exclusion extends across all goods and services, unlike an ordinary trademark registration, which only applies to the goods and services specified in the registration. This broad protection is beneficial to owners of official marks, but may be detrimental not only to persons later applying to register a trademark that might be considered to resemble the official mark, but also to persons who own registrations covering similar trademarks prior to the granting of an official mark.

In the former case, it is evident that the presence of an official mark can make it difficult for any other party to register a similar mark in the future. In the latter case, the owner continues to hold the registration as granted but is likely unable to file further applications to broaden the goods and services covered by the registration. That is, even if a registration for a similar mark is granted prior to advertisement of an official mark (i.e. the registration precedes the official mark), the owner may be prevented from registering any expanded use of their mark.

The broad protection given to official marks therefore makes it difficult to register similar marks. This being said, there are a number of strategies available to an applicant if the Registrar cites an official mark against their application due to similarity between the marks, including:

1. requesting consent from the official mark owner to use and register the applied-for mark;
2. filing arguments to distinguish the applied-for mark from the cited official mark; and
3. commencing a Federal Court action, arguing that the official mark holder does not have the authority to hold an official mark.

Pending amendments to the Trademarks Act may provide applicants with another strategy when faced with the citation of a similar official mark. The pending amendments stem from section 215 of Bill C-86. Once Bill C-86 comes into force, it will add new sections 9(3) and 9(4) to the Trademarks Act. New section 9(3) would provide that the protection awarded to official marks under section 9(1)(n)(iii) of the Trademarks Act is not applicable if the entity that requested the publication of the official mark no longer exists. New section 9(4) would provide that if the conditions of new section 9(3) are satisfied (i.e. the entity requesting publication no longer exists) the Registrar may, on his own or upon request, give public notice that the protection under section 9(1)(n)(iii) no longer applies for the official mark.

Once the amendments are in force, applicants faced with a situation where the Registrar has cited an official mark due to similarity may wish to determine whether the entity that requested publication of the official mark currently exists. If the entity does not exist, the applicant may wish to invoke section 9(3) as a strategy to overcome the objection, arguing that protection pursuant to section 9(1)(n)(iii) no longer applies. The applicant may also wish to file a request pursuant to section 9(4) asking the Registrar to give public notice that protection under section 9(1)(iii) no longer applies for the cited official mark.

Unfortunately, while Bill C-86 has received royal assent, the amendments that introduce sections 9(3) and 9(4) remain pending. As such, these additional strategies are not yet available, making official marks substantial roadblocks for other traders wishing to use similar marks.

Last year, in the decision of Yves Choueifaty v. Attorney General of Canada, 2020 FC 837  (“Choueifaty”), the Federal Court rejected the “problem and solution” approach to claim construction applied by the Canadian Intellectual Property Office (“CIPO”), and reaffirmed the “purposive construction” approach for determining subject-matter eligibility as set forth by Canadian courts. As a result, the Court directed the Commissioner of Patents (the “Commissioner”) to reassess the patentability of Mr. Choueifaty’s application.

On January 11, 2021, the Commissioner issued a new decision, Choueifaty (Re), 2021 CACP 3, on Canadian Patent Application No. 2,635,393 (the “393 Application”) and found Mr. Choueifaty’s second set of proposed claims 1 to 63 to be directed to patentable subject matter. Choueifaty (Re) provides a glimpse into how the Canadian Intellectual Property Office (“CIPO”) might examine computer-implemented inventions in a post-Choueifaty world.

Applying Purposive Construction to Identify Essential Elements

According to the latest Practice Notice promulgated in the wake of Choueifaty, to determine the subject matter eligibility of a patent application, the Commissioner must first construe the claim. Elements of the claims must be identified as either essential or non-essential. Such characterization is the first step to determining the “actual invention” which defines the scope of protection.

The task of identifying the essential and non-essential elements is also critical for patentability, especially for computer-implemented inventions, because the “actual invention” must have a “physical existence or [manifest] a discernable physical effect or change and [relate] to the manual or productive arts” to be patentable in CIPO’s view.  If the physical aspect of a computer-implemented invention, e.g., the computer-related element, is deemed to be non-essential, then it would be difficult to establish patentability pursuant to the Practice Notice.

This was a key contention in the prosecution of the 393 Application, which relates to a computer-implemented method for selecting and managing investment portfolios. Mr. Choueifaty insisted that the computer-related details of the claims are essential to the implementation of the solution because the claim reflects an improvement in computer technology (specifically, the invention allows for a less computationally intensive and therefore faster method of establishing the composition of the desired investment portfolio).

However, in its previous Commissioner’s Decision No. 1478 (“CD 1478”), the Patent Appeal Board applied the “problem and solution” approach and characterized the problem to be “financial portfolio engineering and investing” and the solution to be “the construction of anti-benchmark portfolio wherein the weighting of each security within the portfolio is calculated according to an anti-benchmark ratio such that the portfolio maximizes diversification to create an efficient portfolio”.  As a result, the Commissioner concluded that a person skilled in the art would understand the computer-related elements to be non-essential, because the solution “works solely through the scheme or rules – the calculation of an equation – for constructing the anti-benchmark portfolio.”

The significance of the Choueifaty decision is that it re-asserted the importance of considering the inventor’s intention as reflected by the claim language in purposively construing the claims. To establish a claim element to be non-essential, it must be shown that both (1) according to the words of the claim, the inventor clearly does not intend the element to be essential and (2) a person skilled in the art would appreciate that the particular element can be substituted without affecting the working of the invention. (para. 39 of Choueifaty).

In Choueifaty (Re), the Patent Appeal Board applied the test as set out by the Federal Court in the Choueifaty decision and found all the claimed elements in the second set of proposed claims of the 393 Application to be essential, because “there is no claim language indicating any of the elements to be optional, preferred embodiments or one of a list of alternatives, nor is there any indication in the record before us that would lead to a determination of any claimed elements being non-essential”.

Determining Whether Computer-implemented Inventions Contain Patentable Subject Matter

In addition to clarifying the correct approach to conducting purposive claim construction, the Choueifaty decision also directed the Commissioner to reconsider the exclusion of the improvement of computer processing as a solution, suggesting that this aspect of the invention requires closer examination.

The mere fact that a computer is identified to be an essential element of a claimed invention does not necessarily mean that the subject-matter defined by the claim is patentable subject-matter. In such a case, according to the Practice Notice, it is necessary to consider whether the computer and the algorithm together form a single actual invention that has physicality and solves a problem related to the manual or productive arts.

In the 393 Application, the proposition is that the claimed methods require significantly less processing power and improve the speed of computation compared to the known methods. Choueifaty’s method essentially involves transforming the problem of finding the maximum of a quasi-concave function into finding the minimum of a convex equation. According to an expert affidavit filed in support of the application, Choueifaty’s approach is shown to be faster by approximately two orders of magnitude (50 to 200 times).

Based on this aspect of processing speed improvement, the Patent Appeal Board concluded that the claimed method can be considered an algorithm that improves the functioning of the computer used to run it, and thus defines a patentable subject matter.

The Board specifically distinguished the claims at issue in Schlumberger Canada Ltd. v. Commissioner of Patents, [1982] 1 FC 845 (CA) at 204-06 (“Schlumberger”) from the claims of the 393 Application because the claimed method in Choueifaty does not merely yield information, but also permits the computer to carry out the portfolio optimization procedures with significantly less processing and greater speed.  The Commissioner of Patents adopted the reasoning of the Board in this reconsideration decision, which will result in allowance of the 393 Application.

Key Takeaways

Choueifaty does not represent the first time that the courts have directed that CIPO’s approach to purposive claim construction is wrong.  Almost a decade ago in Canada (Attorney General) v. Amazon.com Inc., 2011 FCA 328 (“Amazon.com”), the federal courts rejected CIPO’s approach to claim construction and directed that CIPO must examine applications in accordance with the principles of claim construction established by Canadian courts.  That resulted in CIPO’s promulgation of two practice notices, PN2013-02 and PN2013-03 relating to purposive claim construction and the examination of computer-implemented inventions, which were based on the problem-solution analysis that was rejected as incorrect in Choueifaty.  There is thus some concern as to whether CIPO will actually implement a correct approach to conducting purposive claim construction in view of the further guidance provided by the Federal Court in Choueifaty.

The Commissioner’s decision in Choueifaty (Re) sheds light on how CIPO will evaluate patentable subject matter for computer-implemented inventions with the “purposive construction” approach in a post-Choueifaty era. The first step is to purposively construe the claims to identify the essential elements and the second step is to determine whether the “actual invention” contains patentable subject matter.

To meet the physicality requirement set forth in the Practice Notice, an algorithm must be shown to improve the functioning of the computer. Choueifaty (Re) provides an example where reducing processing demand and/or improving the speed of computation can be considered as improving the functioning of the computer.  Indeed, this characterization of the problem in Choueifaty as a “computer problem” would likely have resulted in patentability of the invention even under the previous post-Amazon.com practice guidance if that characterization of the problem had been accepted by the Patent Appeal Board.

However, Choueifaty (Re) also creates some interesting conundrums. If an algorithm relates to a novel use case and is being implemented by a computer for the first time, then by the Commissioner’s reasoning, it may not be patentable because it could be regarded as prescribing certain mathematical formulae be implemented via a computer when there is no computer-implemented prior art to improve upon.  Such an invention may thus not improve the functioning of the computer. Similarly, new algorithms that do not improve on the computing aspect may also face a roadblock. An example would be an AI algorithm that makes better predictions but does so with slower speed. These lingering questions would require future decisions to provide answers and hopefully provide further clarity on how CIPO’s application of its new Practice Notice will differ from the application of the problem-solution approach rejected in Choueifaty.