The importance of proactive intellectual property rights management Many companies are unaware that they possess intellectual property1 rights, so they are not proactive in dealing with intellectual property as part of their regular operations. Sometimes, these companies are suddenly faced with the issue when a third party undertakes due diligence on them. This due diligence will inevitably include an intellectual property component, which may lead to a series of corrective measures to solidify, consolidate or recover their rights. In extreme cases, the company may be forced to renegotiate the terms of an agreement in principle, to see the value of the company reduced, or to abort a project or transaction due to its failure to pay proper attention to this category of asset. Third parties do not want to invest in or purchase a company or its shares at a high price if it is likely to encounter issues that could render future projects inoperative. Moreover, case law has taught us over the years that a purchaser cannot rely solely on the representations and warranties and the indemnity provisions of a purchase and sale agreement; they must conduct reasonably adequate due diligence, failing which they may be deprived of certain remedies. This bulletin is primarily aimed to help companies and their leaders properly manage intellectual property to avoid pitfalls. It also provides guidance to companies and institutions required to conduct due diligence in the context of a potential acquisition or financing. However, it does not claim to be exhaustive. Furthermore, we hope that this bulletin will help raise awareness among organizations about the importance of IP and demonstrate that large companies and those with activities heavily focused on intellectual property are not the only ones concerned with these agreements. What is an internal intellectual property legal audit? An internal intellectual property audit is a process conducted by a company to assess all of its intellectual property rights and the protection and defence mechanisms in place. The goal is to identify its rights and gaps, thereby obtaining an overview of the status and scope of its intellectual property rights, tracking their evolution, and determining the necessary actions to identify, prioritize, maintain, protect, defend, expand and enhance these rights. It also allows for an informed assessment of their legal status and prospects. This enables the company to ensure it holds all the intellectual property rights necessary to operate its business and is protected against potential lawsuits for non-compliance with the intellectual property rights of others or any intellectual property-related commitments. Such an audit also helps guide management more effectively in various situations, including commercial and legal, in accordance with the company’s strategy. Frequency of internal audits Proactivity The frequency of an internal intellectual property audit depends, among other factors, on the size and nature of the company, the characteristics, complexity and dynamism of the industry, the strategic importance of the intellectual property assets within the company and the evolution of its assets and ongoing or future projects. Ideally, a company will ensure that this audit is carried out periodically, annually or biannually, by gathering individuals knowledgeable about the intellectual property developed within the company with those capable of making decisions on intellectual property matters. For a company with a strong technological footprint or rapid innovation, a semi-annual or even quarterly frequency may be necessary. A company with a limited intellectual property portfolio may opt for slightly longer intervals, while remaining vigilant to exceptional events. Exceptional events Of course, a company’s proactivity does not shield it from urgent or exceptional situations that may arise during its life and require immediate attention without waiting for the periodic review. There are times in a company’s life when an audit becomes necessary. These situations may occur in various contexts, including: Prior to a liquidity event or change of control of the company, such as a merger, acquisition, arrangement, reorganization, initial public offering (IPO) or asset sale, or during strategic operations such as a joint venture or equity or debt financing During the launch of a new product or a market expansion: This step must be preceded by an intellectual property audit, which sometimes includes an assessment of the freedom to operate (FTO) when the launch or expansion involves an innovation During a major structural change, including the reorganization of the company or a new strategic orientation When a significant change occurs in the market, such as the arrival of a competitor or the imminent launch of a product similar to the company’s, an audit can detect vulnerabilities and prepare the response During significant legislative changes affecting intellectual property During litigation, mediation or negotiations involving intellectual property rights in order to assess the strength of the intellectual property assets, as well as the strengths and weaknesses of the case, to facilitate quick decisions in line with the company’s strategic objectives. Additionally, the intellectual property portfolio can serve deterrent or defensive purposes. For instance, in the event of  a patent infringement lawsuit filed by a competitor, it is advisable to check whether that competitor is infringing on any of the company’s intellectual property rights During the negotiation of an intellectual property license, to ensure that the licensor owns the relevant intellectual property rights and that the terms of the license align with the company’s commercial objectives and contractual obligations Addressing intellectual property issues and continuously reflecting on intellectual property through periodic audits, a company that conducts an audit during an exceptional event will be able to respond more easily and quickly to the arising issues What are the advantages of this kind of audit? An internal intellectual property audit allows a company to: Be aware of the status of its intellectual property (IP) rights, their scope, strengths and weaknesses Collect information on the competitive market situation Identify promising IP or IP that the company is relying on to achieve its objectives Determine the projects that need to be undertaken in order to protect IP and highlight priorities Proactively manage intellectual property rights by determining the necessary monitoring Address incomplete documentation, incomplete chains of titles, ambiguous property rights, incomplete coverage of rights, and licenses to be signed Avoid poor management of open-source software Manage uncertainties relating to prior art (any information, publication or document disclosed before the filing date of a patent application relevant for assessing the patentability of the invention, including its novelty and inventiveness) Manage gaps in territorial protection of rights More easily define the direction to take in various situations, including litigation, transactions, contract negotiations, and make decisions in accordance with the company’s strategy Review compliance with laws, such as intellectual property rights marking issues, uses to avoid, and those to encourage Develop the profile of it as a serious and prudent company attentive to intellectual property assets, adding credibility and reassuring co-contractors, buyers and investors Reduce the transaction timeline in the event of an exceptional event What are the main aspects to address during an internal audit? Inventorying the intellectual property Compile an inventory of all intellectual property rights and add any new developments (innovations, new brands) Prioritize intellectual property assets if there are several, in order to allocate resources accordingly for their protection and adhere to established budgets Identify confidential data Identify potential obstacles Identify underutilized or redundant assets Include in this inventory the intellectual property held by third parties for which the company has exploitation rights, including  source codes and open-source software Organizing it in a file Organize all essential documents such as title deeds, certificates, chain of title documents, agreements, licenses, assignments, and expiration and renewal dates of rights. Confirming the ownership of each asset Confirm that official documents designate the correct holder of intellectual property rights that there are no breaks in the chain of title, and that registrations with the intellectual property offices are accurate and correctly attributed to the current holder of the rights. Completing gaps in ownership of rights Identify all relevant parties, as applicable (employees, inventors, designers, contractors, suppliers, partners, third parties) who must sign assignments of rights, confidentiality agreements, waivers of moral rights and licenses. Assessing the validity and strength of intellectual property For patents, trademarks and industrial designs, review the scope of the claims and prior art to determine the legal strength of each patent, industrial design or trademark. Legal risks in intellectual property Analyze whether the company uses intellectual property and technologies that risk infringing third-party intellectual property Assess the risks of damages and establish a strategy for intellectual property infringement by third parties Analyze the scope, validity, and enforceability of any blocking or potentially blocking intellectual property (which hinders the company’s development or commercialization of a technology, invention, or product, creating a market entry barrier) Monitor relevant published IP applications from third parties Regularly update research and analysis of freedom to operate (a study conducted  to ensure that a product or process can be legally developed, manufactured and marketed without infringing existing intellectual property rights held by third parties) Collect all documents related to past or ongoing litigation involving the company’s intellectual property (including court decisions, settlements, negotiations in intellectual property matters, cease and desist letters or notifications to third parties or concerning third-party intellectual property rights, and legal opinions) Assessing the alignment and relevance of intellectual property Determine whether intellectual property rights align with the company’s commercial objectives and the technological advancements being exploited or promising. Reviewing intellectual property contracts Establish an inventory of contracts with an intellectual property (IP) component Such as R&D contracts, collaborative research contracts, material transfer agreements, employment contracts, joint venture contracts, inbound IP licenses (licenses the company has obtained from third parties) and outbound IP licenses (licenses granted by the company to third parties for its own IP), open-source software licenses and third-party components2, franchise agreements, IP-related cost and revenue-sharing agreements, agreements on the allocation of IP rights  (past and new), IP co-ownership and joint exploitation  agreements, IP trust agreements, escrow agreements for source code, cryptographic keys or technical documents, open innovation agreements, non-competition and non-solicitation clauses/agreements related to trade secrets, contracts for services (software development, design, audiovisual), trademark coexistence agreements and consent agreements, co-branding agreements, sponsorship and merchandising agreements (IP aspects), image rights authorizations and other personality elements, publishing contracts, agreements with collective copyright management organizations, commercial agency and representation contracts (use of trademarks, materials), user-generated content agreements (involving interactive user participation contributing  to content, such as social media, video or photo-sharing sites, forums, blogs, etc.), confidentiality agreements, non-competition agreements, and agreements relating to employee inventions and invention disclosures. Verify, among other things: Whether royalty payments have been made Whether there is a need to renegotiate the terms of certain contracts Whether all the conditions are respected Whether all relevant parties have signed the contracts Identify any binding clauses Including clauses related to the following aspects: Use limitations Royalties Co-ownership, non-transferability or limited transferability of contracts Non-exclusivity of granted rights Exclusivity of granted rights Options on intellectual property rights Movable hypothec security interests on intellectual property assets Securitization or monetization of intellectual property Also, verify the conditions attached to the contracts such as the territory, scope and duration, and any restrictions that may hinder a transaction Security and intellectual property Establish or review security protocols for trade secrets and restricted access to company documents and premises. Intellectual property policies Establish or review internal policies and procedures for identifying, protecting and managing trade secrets Establish or review internal policies and procedures to enable/facilitate the development of innovations Establish or review internal policies and procedures for addressing the use of artificial intelligence within the company by employees, subcontractors and contractors Establish or review internal procedures to activate legal verification protocols (to ensure that protocols for conducting legal due diligence are in place) Consolidating developments stemming from R&D Maintain laboratory notebooks (document all the stages of innovation) Dedicate a team to investigate and analyze developments and assess their potential and intellectual property content, and determine the next steps Providing training Provide appropriate training for all the relevant individuals of the company for a better understanding of confidentiality undertakings and the use of AI and to emphasize the importance of documenting every stage of innovation. Monitoring competitors’ rights Monitor relevant published Iintellectual property applications and conduct regular updates of research and analyses of freedom to operate for innovations Review competitors’ new trademark filings Review new competitors’ websites Ensuring alignment between key territories and protection territories Make sure that the company’s intellectual property has protection with the government offices in the territories where it conducts commercial or manufacturing activities, or where intermediaries that are part of its supply chain are located. Also, it should aim for protection in territories where the company intends to expand its activities before entering those markets.  Establishing the scope of protection in these territories This must be undertaken before negotiating with suppliers, future licensees, manufacturers, etc. in a new market and when launching new products, services and innovations. Compliance Establish or review the measures in place, responsible individuals in charge, and the action plan for verifying the compliance of the company’s actions Establish a reporting and detection system for internally developed innovations Verify the company’s compliance with licenses (obligations to disclose sources; codes, copyright notices, compliance with moral rights, etc.). Any use of third-party intellectual property must be documented to ensure the company has the necessary right to exploit these elements in its products Conclusion Organizing, structuring, and managing intellectual property assets is highly advantageous. The question is not whether intellectual property (IP)-related issues will arise in the company’s operations, but when they will occur! A recent audit will help reduce the number of problematic events, and when such an event occurs the response will be faster, with minimal consequences, and may even unveil opportunities. If financing or the sale of the company is planned, conducting an audit is mandatory. In these cases, the audit can be complex, particularly if there are international portfolios or highly technical assets. Being prepared is beneficial, providing ready answers to investors' questions, strengthening the company's image, and optimizing IP valuation. An internal audit offers the company with a comprehensive global perspective on its intellectual property assets, allowing for optimized use while identifying and addressing any potential gaps. This practice mitigates risks and allows precise management of key information to establish intellectual property assets and facilitate commercial transactions involving intellectual property. Intellectual property (IP) includes patents, patent applications, trademarks (registered, pending or used without registration), copyrights, industrial designs, trade secrets, know-how, plant variety protection, domain names and other digital data (databases, software, applications, etc.). Including, in particular: any library, module, software framework, plug-in, SDK (code libraries, debuggers, compilers), script, driver, embedded software (firmware), container image (immutable file), package, and source/object code, and any of their dependencies, that are provided, owned or licensed by a third party, and used, integrated, interfaced, incorporated, distributed, or required for compilation, testing, deployment or execution of tasks, APIs.

Amendments to the Trademarks Act (“Act”) and the Trademarks Regulations (“Regulations”) will come into force on April 1, 2025. These amendments are aimed at preventing abusive practices, improving efficiency in trademark proceedings and clarifying certain practices. The main amendments are as follows: Cost awards The Registrar will have the power to award costs in trademark opposition proceedings, geographical indication opposition proceedings and summary expungement proceedings under section 45 of the Act.   Costs will not be awarded to compensate the successful party. This power is discretionary. That being said, costs will only be awarded at the request of a party; the amount of the prescribed fees is not discretionary; and costs will only be awarded in the following four (4) cases: Late cancellation of a hearing, that is, less than 14 days before the hearing date; Unreasonable behaviour resulting in undue delays or expenses. Various factors will be taken into account, including the general context, the duration and cause of the delay, the general behaviour of the other party and the extent of the expenses incurred by the other party. Certain behaviours may be deemed unreasonable, such as failing to attend a hearing or cross-examination without notifying the other party,  pursuing a ground of opposition that has no chance of success,  making disrespectful remarks or gestures, breaching a confidentiality order, as well as a series of acts that collectively amount to unreasonable behaviour; Decision upholding the refusal of an application for the registration of a trademark on the grounds of bad faith; Filing of a divisional application on or after the day that the original application is advertised (unless only one divisional application is submitted). The Registrar will issue the order as part of the decision rendered on the merits of the case, where applicable. Costs may be substantial, depending on the reason for which they are awarded. They could be as much as ten (10) times the fee set out for filing a statement of opposition. Confidentiality order While the principle of open courts proceedings is the rule that governs the Registrar, it is acknowledged that in some cases, specific interests must be protected. Consequently, a party that considers that there is a risk in disclosing certain facts or documents may request a confidentiality order and must, in such a case, demonstrate that redacting or describing certain information in more generalized manner would not be sufficient. Such orders are not intended to allow the adverse party to restrict access to certain information or documents, but rather to restrict the public’s access to them. A confidentiality order remains an exceptional measure and must therefore be requested sparingly and before the party requesting the order submits evidence.  If the evidence has already been submitted, the Registrar will not issue the order. This also means that the evidence should not be submitted at the same time as the request for an order is made. The Registrar will be guided, among other things, by the principles set out in Sherman Estate v. Donovan, 2021 SCC 25, to determine the merits of the request for a confidentiality order. Public access must pose a serious risk to a significant public interest that would otherwise be threatened. An order will only be issued if it is necessary to prevent such risk and if no other reasonable alternative exists. In addition, the benefits of granting the order must outweigh its negative effects. This Supreme Court decision also teaches us that direct evidence is not necessarily required to demonstrate a serious threat to a significant public interest, as the existence of harm can be established on the basis of logical inferences.   This process does not affect the timeline of the case, but it is possible to request an extension of time either before or at the same time as the request for confidentiality. In the absence of the other party’s consent, the Registrar will issue a letter requesting such other party’s representations. Should they fail to respond, the Registrar will render a decision. All of these exchanges will be made public, so evidence should not be included in them. Th confidentiality order may be cancelled or amended. In the event of non-compliance with the order, the injured party will have to appeal to the Federal Court. Where the Registrar’s decision containing such an order is appealed, it is imperative that the person for whom the order was issued apply to the Federal Court for a confidentiality order. Case management While the Registrar already issues case management decisions for efficiency and cost-effectiveness purposes, the amendments to the Regulations codify the Registrar’s authority to deal with matters as the circumstances and considerations of fairness permit, in order to assist in moving forward complex cases relating to trademark and geographical indication opposition proceedings and summary expungement proceedings under section 45 of the Act. These “case-managed procedures,” allow the Registrar to set or change the time frame or manner in which a step must be completed, to schedule the steps, to deal with confidential aspects of files, to consolidate related cases and hold conference calls, and more. The Registrar must consider the circumstances of the case, including: the level of intervention likely required by the procedure to ensure that the matters are addressed efficiently and effectively; the nature and extent of evidence; the complexity of the proceeding; whether the parties are represented; the number of related cases; and whether substantial delay has occurred or is anticipated to occur in the conduct of the proceeding. Official marks Official marks are a type of mark with a very broad scope of protection in Canada. Once such a mark has been published, no person may, without the consent of the official mark owner, use or register an identical mark or a mark so nearly resembling as to be likely mistaken for that official mark for any goods or services. Moreover, official marks are not subject to renewal, so they can exist indefinitely.  To avoid unduly blocking new applications, a new mechanism is provided whereby the Registrar, on their own initiative or upon request, can deactivate official marks where the mark owner is no longer a public authority or has ceased to exist.  Such requests are subject to fees. Withdrawal of an opposition The Registrar is given greater latitude where, in their opinion, an opponent fails to pursue the trademark opposition. The Registrar may, after giving notice of the default to the opponent consider the opposition as withdrawn, unless the default is remedied within the time specified in the notice. Court proceedings A prerequisite is now required to institute proceedings before the Federal Court,under certain circumstances. The trademark owner must show that it has used the mark before asserting its rights before the courts where proceedings are filed within the first three years of its trademark registration, in cases where such proceedings allege infringement of a registered trademark or depreciation of goodwill. Thus, the owner of a registered trademark will only be able to obtain relief if the trademark was used in Canada within the first three years of registration, or if the absence of use in Canada was due to special circumstances that excuse such absence of use. Appealing the Registrar’s decision The new provision recognizes that the court may exercise any discretion vested in the Registrar when allowing the submission of evidence that was not provided before the Registrar. This provision requires leave of the court for the submission of evidence on appeal, to prevent minimal evidence from being presented at first instance and then supplemented on appeal. The administration of justice is best served when the court can settle a case as a whole at the earliest opportunity. Transitional measures The Registrar is expected to publish transitional measures on April 15 or after April 1, 2025. Conclusion In conclusion, the upcoming changes to the Act and the Regulations, effective April 1, 2025, represent a significant step towards enhancing the legal framework surrounding trademarks in Canada, thereby addressing the growing need for transparency and efficiency in this field. It is crucial for businesses and professionals in the sector to familiarize themselves with these changes to ensure compliance and optimize the management of their trademarks.

The Regulation1 specifying the new obligations of Bill 962 was published in the Gazette officielle du Québec on June 26, 2024. It modifies the current Regulation respecting the language of commerce and business.3 These changes were expected considering the questions raised by the passage of Bill 96 in June 2022, which required clarification. In this bulletin, we will discuss issues related to the use of trademarks in connection with products, commercial publications, public signs and posters, and commercial advertising. Exception for recognized trademarks Good news! The Regulation reintroduces the exception for “recognized” trademarks,4 within the meaning of the Trademarks Act. Common law trademarks and trademarks registered with the Canadian Intellectual Property Office (“CIPO”) may be used without a French version, provided that no French version of the trademark appears in the Register. By regulation, the government has extended the scope of the exception to trademarks. Under Bill 96 it was to apply only to CIPO-registered trademarks. It has been extended to also cover common law trademarks. With this amendment, the government has made the rules around trademarks more consistent, whether they are used in connection with products, commercial publications or public signs and posters. It is still recommended to register your trademarks to protect your rights, but registration is no longer a condition for compliance with applicable regulations. Obligation to translate generic and descriptive terms included in trademarks The Charter of the French language5 (the “Charter”) stipulates that any inscription on a product, its container or its wrapping must be in French, and that no inscription in another language may be given greater prominence than that in French or be available on more favourable terms. The Regulation confirms that the term “product” includes its container, packaging and any accompanying documents or objects.6 The Regulation also clarifies the scope of the obligation to translate descriptions and generic terms included in trademarks: “Description” and “generic term”: A description refers to one or more words describing the characteristics of a product, while a generic term describes the nature of a product, excluding the name of the enterprise and the name of the product as sold.7 Designations of origin and distinctive names of a cultural nature are not considered a description or a generic term. In all likelihood, the reference to the “name of the product as sold” refers to the product’s main trademark. The obligation to translate generic terms or descriptions contained in the trademark would not apply to the main trademarks under which the product is sold. Thus, according to the example provided by the Quebec government, there would be no need to translate into French the descriptions or generic terms included in the main trademark BestSoap, as illustrated below. The question also arises regarding secondary trademarks, which are often used to designate a specific product within a range of products. Can we say that such a secondary trademark qualifies as a "name of the product as sold," in addition to the main trademark? Unfortunately, the guide published by the Office québécois de la langue française ("OQLF") does not provide any clarity on this matter, while the text of the Regulation appears broad enough to allow for such an argument depending on the circumstances. In our opinion, such an argument could be made in some cases, but we will need to await the position of the OQLF (or a court decision) for more certainty on this issue. The Regulation specifies that the French translation of the generic terms or descriptions included in trademarks must appear in French on the product or on a medium permanently attached to the product.8 However, it does not provide a definition of “a medium permanently attached to the product.” It will be interesting to see how practice develops in this area, and how the OQLF interprets this notion. Keep in mind the Charter’s principle that no inscription in another language should be available on more favourable terms. Companies opting for the medium option will need to ensure not only the permanence of the medium, but also its availability, under conditions that are at least as favourable. It should also be noted that the size of the French translation of generic terms and descriptions included in a trademark is not specifically addressed in the Regulation. However, the OQLF website specifies that no generic term or description in another language should take precedence over that appearing in French; the OQLF thus seems to apply the general rule contained in the Charter.9 This means that the French text must be at least equivalent in size and appearance to that in another language, so that the latter is not predominant. Transitional period: The Regulation allows a two-year grace period to give businesses time to comply with the above requirements. Until June 1, 2027, any product that does not comply with these new requirements may continue to be distributed, retailed, leased, offered for sale or lease, or otherwise offered on the market, whether in return for payment or free of charge, provided (i) it was manufactured before June 1, 2025, and (ii) no corresponding French version of the recognized trademark has been registered in the Canadian trademark register by June 26, 2024.10 Although it will still be necessary to make every effort to comply with obligations, this measure ensures that existing non-compliant products can be liquidated. Commercial publications The Regulation makes no changes to the rules governing commercial publications, such as catalogues, brochures, folders, commercial directories and other similar publications. The exception applicable to “recognized” trademarks, which had not been amended in Bill 96 or in the draft regulations, remains unchanged. Common law trademarks and trademarks registered with CIPO may be used without a French version, provided that no French version has been registered. Contrary to what had been envisaged in the draft regulations, websites and social media are not expressly named as commercial publications whose French version must be available on terms that are at least as favourable as any version in another language. To date, the interpretation adopted and applied by the OQLF and the courts is that websites and social media are considered commercial publications and must therefore follow the same rules. Nevertheless, we will remain watchful to see if the lack of explicit reference in the Regulation to websites and social media is of any significance, and if the OQLF will consider changes to its approach to these two types of communication. Advertising and public signs and posters It is well known that the Charter requires public signs and posters and commercial advertising in Quebec to be in French. They may be both in French and in another language provided that French is markedly predominant.11 The “recognized” trademark exception also applies to public signs and posters and commercial advertising. Thus, common law trademarks and CIPO-registered trademarks may be used without a French version, if there is no corresponding French version in the Canadian trademark register.12 For public signs and posters visible from outside premises, the rule of “sufficient presence” of French gives way to that of the “clear predominance” of French, when the trademark or business name is in a language other than French, in whole or in part.13 Public signage visible from outside premises includes not only the exterior of a building, but also premises inside a shopping centre.14 In such cases, a trademark or company name in a language other than French must be accompanied by a generic term, a description of the goods or services concerned, or a slogan, in French.15 This trademark or company name visible on a storefront or inside a shopping centre will be considered in the overall visual impact of the premises. For the same visual field, text written in French has much greater impact when (i) the French text occupies a space at least twice as large as that devoted to text in another language, and (ii) its legibility and permanent visibility are at least equivalent to that of text in another language.16 Finally, as concerns digital signage with alternating French and non-French text, the French text is considered to have a much greater visual impact when it is visible for at least twice as long as the non-French text.17 Note that there is no grace period for public signs and posters. Companies therefore have until June 1, 2025, to comply with the new rules. The examples below, from the Quebec government, illustrate the application of these rules: Here is a summary of the main changes to the Charter and the Regulation that will come into effect on June 1, 2025: Products (labels, containers, packaging, or any accompanying document or object) A “recognized” trademark (registered or used) may be used in a language other than French, unless a corresponding French version is on the Canadian trademark register. Any description or generic term included in a trademark must appear in French, excluding the name of the company or the name of the product as sold (and other specific exceptions); on the OQLF website, it is stated that no generic term or description in another language may take precedence over that appearing in French. The French translation of these generic terms or descriptions must appear in French on the product or on a medium permanently attached to the product. A grace period until June 1, 2027, is granted for any product that does not comply with these new requirements; such a product may continue to be distributed, retailed, leased, offered for sale or lease, or otherwise offered on the market, whether in return for payment or free of charge, provided (i) it was manufactured before June 1, 2025, and (ii) no corresponding French version of the recognized trademark has been registered in the Canadian trademark register by June 26, 2024. Commercial publications (catalogues, brochures, folders, commercial directories) No change: A “recognized” trademark within the meaning of the Trademarks Act (registered or used) may be used in a language other than French, unless a French version has been registered. It is expected that the rules governing commercial publications will apply to websites and social media, in line with the current interpretation of the OQLF and the courts. Public signs and posters A “recognized” trademark within the meaning of the Trademarks Act(registered or used) may be used in a language other than French, unless a corresponding French version is on the Canadian trademark register. In public signs and posters visible from outside premises, including inside shopping malls, when a trademark or commercial name is in a language other than French, even in part:  French must be clearly predominant, taking into account the space allotted to the trademark or company name; and the trademark or company name must be accompanied by French terms, in particular a generic term, a description of the products or services, or a slogan. For the same visual space, the space allotted to French text must be at least twice as large as that devoted to text in another language, and its legibility and permanent visibility must be at least equivalent to that of text in another language. To learn more about this topic or for any questions concerning the Charter of the French language and its regulations, please contact our professionals or consult our previous publications! Regulation to amend mainly the Regulation respecting the language of commerce and business, Gazette officielle du Québec, (the "Regulation"). An Act respecting French, the official and common language of Québec, SQ, 2022, c. 14 (“Bill 96”). Regulation respecting the language of commerce and business, CQLR, c. C-11, r. 9. Regulation, supra, note 1, s. 2 (7.1) and s. 4 (25.1). Charter of the French language, CQLR, c. C-11, s. 51 Regulation, supra, note 1, s. 6 (27.1). Regulation, supra, note 1, s. 6 (27.2). Regulation, supra, note 1, s. 2 (7.1). Charter, supra, note 5, s. 51. Regulation, supra, note 1, s. 7. However, the grace period has been extended to December 31, 2025, for products covered by the new labelling standards set out in the Regulations Amending the Food and Drug Regulations (Nutrition Symbols, Other Labelling Provisions, Vitamin D and Hydrogenated Fats or Oils) (SOR/2022-168) or the Regulations Amending the Food and Drug Regulations and the Cannabis Regulations (Supplemented Foods) (SOR/2022-169). Charter, supra, note 5, s. 58. Regulation, supra, note 1, s. 4 (25.1). Charter, supra, note 5, s. 58.1 and Regulation, supra, note 1, s. 4 (s. 25.1). Regulation, supra, note 1, s. 6 (27.5). Regulation, supra, note 1, s. 6 (27.7). Regulation, supra, note 1, s. 6 (27.6). Components written in French will be presumed to meet these legibility and visibility requirements if they are permanent and are designed, lighted and situated so as to make them easy to read, both at the same time, at all times. Regulation, supra, note 1, s. 6 (27.6).

At a time when Canada and many other countries are taking steps to protect users from harm online,1 a decision was handed down by the Supreme Court of British Columbia (the “Court”) on January 15, 2024, regarding the conduct of a competitor with respect to complaints about intellectual property infringement made on Amazon’s e-commerce website. Amazon’s platform is similar to many other e-commerce platforms that have a complaint mechanism for third-party use of intellectual property in violation of the rights of the real owners thereof. The complaint mechanism makes it possible for a complainant to submit an intellectual property infringement claim regarding content to which it has a good faith right in order to partially or fully remove the content in question from the pages of the alleged infringing party published on Amazon’s platform. Such a mechanism has its purpose, as it is an effective way of tracking down counterfeiters. As we will see in Keezio Group, LLC v. The Shrunks' Family Toy Company Inc.,2 the mechanism can also be used maliciously. The facts and the plaintiff’s allegations In this case, complaints were lodged by a competitor of the company that was the subject of the complaints, with both entities operating in the inflatable bed industry. Keezio Group, LLC (“Keezio”) markets the “Hiccapop Inflatable Toddler Travel Bed” (the “Hiccapop Bed”), while The Shrunks’ Family Toy Company Inc. (“The Shrunks”) offers inflatable beds consisting of a mattress placed in an inflatable bed frame. Both companies primarily sell their products on the Amazon retail platform. In February 2017, Amazon informed Keezio that it had received a report of trademark infringement regarding the Hiccapop Bed, the complainant being identified as Mr. Cirjak of The Shrunks. Subsequently, in accordance with the applicable process, Amazon removed the product from Keezio’s product-listing pages on its website. It is worth noting that assessing the substantive validity of a complaint is not part of Amazon’s complaints handling process. On or about April 17, 2017, Keezio received another notice. The complaints of 2017 were eventually withdrawn and the page featuring the Hiccapop Bed was restored. In November 2019, Keezio received two more notices of complaints from Amazon regarding violations similar to those received about two years prior. The first of these two notices, sent on November 22, 2019, referred to trademark infringement. Amazon thus removed the page in question, which contained a chart comparing Keezio’s products with The Shrunks’ products. Keezio asked for clarification of this alleged infringement but received no response from The Shrunks. Having received no details about the infringement from The Shrunks, Keezio ultimately changed its webpage to remove all mentions of “The Shrunks”, replacing them with “Rhymes with Skunks”. Although Amazon informed Keezio in a message in November 2019 that it would restore its content, the evidence does not clearly establish whether this was done. The second notice of infringement, dated November 28, 2019, concerned an allegation of copyright infringement on six webpages for the Hiccapop Bed. The pages were delisted on or about November 28, 2019, and eventually reinstated on December 2, 2019. The Shrunks denied having filed the complaints of 2019. However, the Court did not hesitate to conclude that The Shrunks was also behind these complaints. Issues at bar about the complaints There were many issues in this case, and some claims were eventually withdrawn. We will focus on the two complaints made in 2019. Specifically, Keezio argued that the complaints that The Shrunks had lodged with Amazon were unfounded, resulting in a loss of business for Keezio. In particular, the Court analyzed section 7 of the Trademarks Act.3 To succeed in such a claim, the plaintiff must prove (i) that a false or misleading statement was made (ii) that tends to discredit the business, goods or services of a competitor, (iii) resulting in damages. The Court held that the person making the statements need not know of their falsity in order to satisfy these criteria. Findings of the Court (i) The allegation of trademark infringement in the comparative chart The trademark infringement complaint concerned a comparative chart featuring both Hiccapop Bed and The Shrunks products, with comparative data on the features of both products. The data itself was not challenged. The complaint related to the unauthorized use of The Shrunks’ registered trademark in the chart. Basing itself on the landmark decision in Clairol International Corp. et al v. Thomas Supply and Equipment Co.,4 the Court concluded that Keezio’s comparative chart did not amount to “use” of The Shrunks trademark pursuant to s. 4(1) of the Trademarks Act, and that therefore said chart did not constitute trademark infringement. Accordingly, the Court determined that The Shrunks’ complaint that Keezio infringed its trademark was unfounded. The Court further concluded that the comparative chart was not contrary to section 22 of the Trademarks Act:5 The mere depiction of a competitor’s trademark in comparative advertising does not in itself depreciate the value of the goodwill attached to a product. (ii) The allegation of copyright infringement The copyright infringement notice contained six Amazon Standard Internal Catalog Identification Numbers (ASINs), which identified six webpages that were sales pages for the Hiccapop Bed. The Court ruled that the allegation of copyright infringement in question was unfounded, as it related to a bed, which is a useful article sold in a quantity of more than 50. The reproduction of the bed design was therefore not covered by subsection 64(2)6 of the Copyright Act. The Court found The Shrunks liable for the two complaints made in November 2019, which it determined to be false or misleading as the allegations of trademark and copyright infringement were unfounded. The Court stated that the complaints tended to discredit Keezio’s business because they misled Amazon into removing Keezio’s product listing pages. On this point, the Court referred to a passage from the Federal Court decision Yiwu Thousand Shores E-Commerce Co. Ltd. v. Lin.7 With regard to damages, the Court determined that Keezio’s evidence regarding the calculation of damages was inadequate on several counts, but nonetheless awarded damages based on a decrease in Keezio’s sales on the dates of delisting. The Court did not hold The Shrunks’ principal personally liable and did not grant a permanent injunction or punitive damages. It also dismissed The Shrunks’ counterclaim for copyright infringement, and ordered The Shrunks to pay Keezio costs, excluding taxes and disbursements. Comments This decision highlights how crucial it is for complainants to be serious when filing complaints. The complaints mechanism on platforms such as Amazon is an extremely useful and effective tool for reporting rights violations, provided that use of such mechanisms is made in good faith and based on solid legal foundations. Although such a mechanism is easy to use, the rights involved must absolutely be analyzed in advance, as an ill-founded complaint can result in harm—which can be considerable—especially when the platform has a global reach. In such a case, the removal of a webpage can result in significant damages. It is therefore essential to exercise due diligence, as a country-by-country analysis of rights can reveal different legal situations and rights holders from one country to another. Not only must competitors carefully consider and weigh their actions, but e commerce website operators must also be vigilant and respond promptly to requests for removal and geographic restrictions. Amazon recently experienced a situation like this when a UK court ruled against it.8 The decision dealt with a targeting operation on Amazon’s website, where sales offers or advertisements were intentionally directed at consumers in the UK where the trademarks were not owned in that country by the same company offering the products for sale. A word to the wise! See Bill C-63, the Online Harms Act, which establishes a regime to address such harm. Keezio Group, LLC v. The Shrunks' Family Toy Company Inc., 2024 BCSC 64. Section 7 of the Trademarks Act: Prohibitions 7. No person shall - make a false or misleading statement tending to discredit the business, goods or services of a competitor; - direct public attention to his goods, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his goods, services or business and the goods, services or business of another; - pass off other goods or services as and for those ordered or requested; or - make use, in association with goods or services, of any description that is false in a material respect and likely to mislead the public as to (i) the character, quality, quantity or composition, (ii) the geographical origin, or (iii) the mode of the manufacture, production or performance of the goods or services. Clairol International Corp. v. Thomas Supply & Equipment Co. 55 C.P.R. 176, 1968 CanLII 1280. Section 22 of the Trademarks Act: 22.Depreciation of goodwill - 22 (1) No person shall use a trademark registered by another person in a manner that is likely to have the effect of depreciating the value of the goodwill attaching thereto. Subsection 64 (2) of the Copyright Act: 64 (2) Non-infringement re certain designs Where copyright subsists in a design applied to a useful article or in an artistic work from which the design is derived and, by or under the authority of any person who owns the copyright in Canada or who owns the copyright elsewhere, - the article is reproduced in a quantity of more than fifty, or - where the article is a plate, engraving or cast, the article is used for producing more than fifty useful articles, it shall not thereafter be an infringement of the copyright or the moral rights for anyone, - to reproduce the design of the article or a design not differing substantially from the design of the article by (i) making the article, or (ii) making a drawing or other reproduction in any material form of the article, or - to do with an article, drawing or reproduction that is made as described in paragraph (c) anything that the owner of the copyright has the sole right to do with the design or artistic work in which the copyright subsists. Yiwu Thousand Shores E-Commerce Co. Ltd. v. Lin, 2021 CF 1040. See paragraph 58 of this decision: [58] I agree with ThousandShores that the Respondent made false allegations and misstatements to Amazon.ca in the Takedown Requests, at least one of which was made after the Respondent’s receipt of the October 2020 Letter. ThousandShores had no ability to respond directly to his allegations. The absence of any evidence of use of the OHUHU trademark by the Respondent and the likelihood of confusion between the parties’ marks means the Impugned Registration is invalid. Accordingly, the Respondent’s statements regarding the Impugned Registration, the inauthenticity of ThousandShores’ OHUHU Goods and its infringement of the Respondent’s rights were false. The statements clearly tended to discredit ThousandShores’ business, the OHUHU Storefront, and the OHUHU Goods. They misled Amazon.ca, causing it to remove ThousandShores’ listings for the OHUHU Goods with a resulting loss of profits. ThousandShores’ only recourse was to provide evidence of authorization or license by the Respondent, or to challenge the validity of the Impugned Registration. Lifestyle Equities CV and another v Amazon UK Services Ltd and others [2022] EWCA Civ 552, upheld by the Supreme Court on March 6, 2024 ([2024] UKSC 8).