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On May 13, 2021, the Quebec government introduced Bill 96 to amend the Charter of the French language (the “Charter”) to strengthen the provisions regarding the use of French, particularly with respect to the language of commerce and business. This bill has been thoroughly reviewed in parliamentary committee and the committee tabled its report on April 26. In the current political context, it is expected that Bill 96 will be adopted in the coming months. The final form of the bill and its coming into force have yet to be determined. However, we can already anticipate that the timeframe for compliance with these new rules will be three years following assent of the Bill.1 The bill provides for a number of changes to the Charter, including amendments with respect to trademarks, which currently benefit from an exception. Under this exception, businesses may currently use a trademark in a language other than French in Quebec, provided that the French version of the trademark has not been registered. Since 2019, sufficient French must be present in public signage outside a building when a trademark is used in a language other than French.2 Under Bill 96, it will still be possible to use a trademark in a language other than French on products, in commercial publications and on public signage and commercial advertising in Quebec. However, the conditions for benefiting from this exception under the Charter will be modified and deserve not only attention, but also action! Start by reading the following. If you use a trademark in a language other than French in Quebec or if you plan to do so, you must first make sure that this trademark is registered.3 You will also need to review the public signage outside your premises, to comply with the new requirement of a markedly predominance presence of French.4 Finally, you will need to revise your product labels and packaging if your registered trademarks contain descriptive or generic terms in a language other than French.5 In such a case, you may have to modify your packaging and labels to add a French translation of these terms. It should be noted that the Charter applies to businesses with an establishment in Quebec, but also possibly to businesses based outside Quebec, insofar as their website is intended to perform a commercial act on Quebec territory. With respect to websites, the current practice of the Office québécois de la langue française (“OQLF”) is to intervene only in cases where the business has an establishment in the province of Quebec. If the enterprise communicating  with Quebec customers does not have an establishment there, the OQLF favours an incentive approach.6 The future will tell  whether this practice  will be maintained once the Charter is amended.There is no doubt that foreign companies that are the subject of a complaint in this regard will be given time to translate their website into French in order to avoid the sanctions that will be more severe under the new rules. Let’s take a closer look at what each of the proposed changes means, should the bill be passed in its current form. Change #1: French to be markedly predominant on public signage outside the premises Bill 96 replaces the requirement of the sufficient presence of French with a requirement of markedly predominance of French visible from the exterior of the premises.7 Currently, the markedly predominance of French is assessed within the parameters set out in the Regulation defining the scope of the expression “markedly predominant” for the purposes of the Charter of the French Language. According to this regulation, the presence of French is considered markedly predominant if the French text has a much greater visual impact than the text in the other language (i.e. twice as large). It will be interesting to see if these rules will be maintained or if new criteria will be established for the application of Bill 96. The first element to keep in mind with respect to the requirement of the markedly predominance of French under the current law is to disregard the visual impact of the trademark. Indeed, section 1 of the Regulation provides as follows: In assessing the visual impact, a family name, a place name, a trade mark or other terms in a language other than French are not considered where their presence is specifically allowed under an exception provided for in the Charter of the French language (chapter C-11) or its regulations. Thus, as long as the trademark is registered in accordance with the new applicable rules, the visual field occupied by the trademark must be disregarded in assessing whether French is otherwise markedly predominant in the public signage outside the premises. In other words, no modification of your public signage will be required as long as your sign consists of the following: (1) a trademark (registered) in a language other than French and (2) generic or descriptive terms in French. Indeed, the only elements displayed in such a case (apart from the trademark) would be in French. However, if your public signage includes elements in a language other than French, the French should be markedly predominant (i.e. twice as large) in the visual field (excluding the space occupied by the trademark. The regulations set out various presumptions to determine whether the criterion of the much greater visual impact of French is met. In the case of a single poster: the French text will be deemed to have a much greater visual impact if the following conditions are met:8 the space devoted to the French text is at least twice as large as that devoted to the text in another language; the characters used in the French text are at least twice as large as those used in the text written in another language; and the other features of the posters do not reduce the visual impact of the French text. In the case of separate posters of different dimensions: the French text will be deemed to have a much greater visual impact if the following conditions are met:9 the posters bearing the French text are at least as numerous as those bearing the text in the other language; the characters used in the French text are at least twice as large as those used in the text in the other language; and the other features of posters do not reduce the visual impact of the French text. In the case of texts both in French and in another language: the text in French is deemed to have a much greater visual impact if the following conditions are met:10 the posters bearing the French text are at least as numerous as those bearing the text in the other language; the posters bearing the French text are at least twice as large as those with the other language text; the characters used in the French text are at least twice as large as those in the text in the other language; and the other features of the posters do not reduce the visual impact of the French text Finally, it should be noted that the criterion of the markedly predominance of French will also be applied to the trade name of the business, if it is visible from outside the premises and includes an expression from a language other than French.11 Change #2: In order to avoid translation into French, registration of the trademark used in public signage and commercial advertising is mandatory In order to use a trademark in a language other than French, without translation, with regard to public signage and commercial advertising, it will now be required to demonstrate that: the trademark is already registered in Canada; and no corresponding French version appears on the Trademarks Register.12 If these conditions are not met, the trademark will have to be accompanied by a markedly predominant French translation. If you are currently using a brand in a language other than French that is not registered, be quick because the registration process in Canada can easily take three years! Otherwise, you may be required to modify your public signage and commercial advertising to include a markedly predominant French version of the trademark. While it is possible to request an accelerated examination of an application for registration in certain special circumstances (including the fact that a court proceeding is pending), it is far from certain that the Canadian Intellectual Property Office will agree to expedite examination of applications for reasons of compliance with the Charter. It is therefore better not to delay filing your trademarks in order not to expose yourself to the consequences provided under the law. In practical terms, public signage includes any message posted in a place accessible to the public, whether inside or outside the premises, whereas commercial advertising is the expression of a commercial message, regardless of the form. The following examples are considered public display or commercial advertising: signs, posters, billboards, displays, bulletin boards; delivery vehicles, promotional bags, carts, employee uniforms; catalogues, brochures, leaflets, directories and other similar publications; and websites and social media. Change #3 : A trademark used in connection with the products must be registered to avoid French translation In its original form, the bill was silent on the issue of the use of a trademark on a product, suggesting that the status quo would continue to apply, namely that it would still be possible to use a trademark in a language other than French on a product (including its packaging or label), without the need for registration. However, the government has added a provision during the course of the parliamentary work by providing for the obligation to register trademarks in a language other than French, to avoid the addition of a French translation.13 So, no exception for product labels and packaging: make sure you register your trademarks if you have not already done so. Otherwise, you could be forced to withdraw your products from the market and pay fines under the new law, as discussed below. Change #4: Requirement to translate generic and descriptive terms for product trademarks The amendment proposed in parliamentary committee discussed above goes much further than the need to register the trademark and could have a major impact on some businesses by requiring them to modify their packaging and labels  forproducts sold in Quebec. The new section 51.1 of the Charter proposed in parliamentary committee, provides that if the registered trademark (in a language other than French) contains generic or descriptive terms, these will have to be translated into French. 51.1 notwithstanding section 51, on a product, a registered trademark within the meaning of the Trademarks Act (Revised Statutes of Canada, 1985, chapter T-13) may be, even in part, solely in a language other than French where there is no corresponding version in French on the register kept under that Act.However, if generic or descriptive terms of the product are included in such trademark, they must appear in French on such product or on a medium permanently attached to it. (emphasis added) A reading of the Committee’s work provides a better understanding of the purpose of this product-specific rule: the government seems to want to limit the practice of some businesses which register, as a trademark, the label affixed to a product consisting of the main trademark, but also of several descriptive or generic terms, which would otherwise have to be translated to comply with the Charter. The example of the SOFTSOAP trademark was discussed in parliamentary committee. To illustrate this, we reproduce here two examples of registered trademarks for SOFTSOAP products: As the law currently stands, these trademarks may be registered under the Trademarks Act and they comply with the Charter. The owner of these trademarks can therefore rely on the “recognized trademarks” exception and sell its products in Quebec without translating into French the descriptive or generic terms such as “soothing clean,” “aloe vera fresh,” “refill” and “good for 800 dispenses.”  Based on discussions in the parliamentary committee, the government’s concern does not seem to be directed towards the main trademarks, in this instance, SOFTSOAP, but rather towards the registration of purely descriptive terms, which do not, in themselves, have the vocation of a trademark and which nevertheless benefit from the exception of recognized trademarks under the current law.  The regulations will, we hope, clarify the scope of this section 51.1 of the Charter, if it is adopted, by providing that this new requirement does not apply to the main trademarks of products. We also hope that a reasonable period of time will be given to businesses to allow them to change their labels and packaging. Change #5: Complaints, powers and penalties in the event of violation The OQLF is responsible for ensuring compliance with the Charter and its regulations. While it has the authority to identify violations, it mainly acts on complaints from the public. After reviewing a complaint, the OQLF sends an official letter if it judges that there has been a violation and it gives the business a deadline to respond. The OQLF can refer the matter to the Director of Criminal and Penal Prosecutions if the matter is not resolved to its satisfaction, who can in turn bring an action before the Court of Québec. In the event of a conviction, the court determines the amount of the fine to be paid. The OQLF mainly intervenes in cases of violations regarding public signage and websites for businesses with an establishment in Quebec. The bill brings some changes to the handling of complaints. The OQLF will have to inform the complainant of the handling of the complaint and the measures that the OQLF intends to take against the company targeted by the complaint.14 The OQLF will also benefit from new powers as of the assent of Bill 96,15 including: the power to issue orders in case of a breach (removal of products from shelves);16 the power to ask to the Superior Court to issue an injunction for the removal of non-compliant products or the removal or destruction of posters, advertisements, billboards or illuminated signs that contravene the Charter.17 Finally, the amount of fines to be paid in the case of a violation is increased as follows:18 individuals: $700 to $7,000; legal persons: $3,000 to $30,000. The bill provides that the amount of the fines doubles for a first recidivism offence and triple for any subsequent offence.19 The amount increases with each day the violation continues, with each day counted as a separate violation.20 Conclusions: What to do to prepare yourself for the entry into force of Bill 96? In practice, the requirement of having a registered trademark will be problematic for businesses who want to use a non-French trademark in Quebec, without a French translation. To comply with the new rules, businesses will indeed have to delay their launch in the province of Quebec until their mark is registered. As indicated above, registration process may easily take up to three years if not more. Let’s hope that the government will amend Bill 96 to require filing of an application as opposed to trademark registration. Businesses that use trademarks in a language other than French have every reason to take the following measures right now:  List all trademarks used in a language other than French (including slogans) as well as those to be used in upcoming projects; Consult a trademark expert to determine the best strategy, including clearance searches to ensure that these trademarks are registrable; File trademark applications quickly, given the lengthy registration process in Canada (i.e. a minimum of three years),. A review of product labels and packaging should also be initiated to ensure compliance with the new rules, once the bill is passed. Finally, public signage outside the premises will also have to be reviewed insofar as a language other than French is used, apart from the trademark. A proactive approach will allow you to avoid costs related to the addition of a French translation in public signage, advertising and labelling of your products and services and, moreover, to avoid fines in the event of non-compliance with the new rules. Ready, Set, Register! Bill 96, article 201 paragraph 5 Regulation respecting the language of commerce and business, section 25.1 Bill 96, article 47 Bill 96, article 47 Bill 96, article 42.1 10 legal questions about the Charter of the French Language, websites and social media accounts, Question 3 and Question 6; Les médias sociaux et la Charte de la langue française – Guide pratique à l’intention des entreprises, https://www.oqlf.gouv.qc.ca/francisation/entreprises/guide-medias-sociaux.pdf, pages 7 and 8 Bill 96, article 47 Regulation defining the scope of the expression “markedly predominant” for the purposes of the Charter of the French language, section 2  Regulation defining the scope of the expression “markedly predominant” for the purposes of the Charter of the French language, section 3  Regulations defining the scope of the expression “markedly predominant” for the purposes of the Charter of the French language, section 4 Bill 96, article 48 Bill 96, article 47 Bill 96, article 42.1 Bill 96, article 107 Bill 96, article 201 Bill 96, article 113 (177) Bill 96, article 113 (184) Bill 96, article 114 (205) Bill 96, article 114 (206) Bill 96, article 114 (208)

Behind every video game, there is intellectual property (IP) which is worth protecting to optimize monetisation of the game. As discussed in Studios and designers: Are you sure that you own the intellectual property rights to your video games, the first step for studios and designers is to make sure that they own all IP rights on the video game. The next step is to identify what type of IP protection is available between trademarks, copyrights and patents and then put in place an IP strategy to protect these assets in Canada and abroad. Below is a summary of the types of protection to consider to fully protect a video game. Trademarks The name of a video game is a valuable asset, with a potential to become internationally famous. Just think about Call of Duty, Fortnite, Minecraft and Assassin’s Creed or, for the more nostalgic, classic games such as Super Mario. Pokémon and Pacman. Trademarks have this power to evoke unique and captivating experience in the gaming world. In this industry, experience shows that a video game may become an instant international success, since it is an online market with powerful gaming influencers. For this reason, being proactive with trademark protection is key. What does it mean? First, clearance searches should be made as soon as you decide on the name of your game, in the most important markets where you anticipate sales. The idea here is to make sure that your brand is not conflicting with other marks so that you may use it and register it in your main market. Once the mark is cleared, you may then proceed with filing. Here again, the earlier the better as trademark protection is, in most countries, granted to the first-to-file. Filing before your project becomes public is therefore strongly recommend. As for the scope of the application, it should of course cover the game itself but also potential merchandising goods, either because it is part of the business plan to monetize the brand, or as a defensive strategy. Apart from the main brand, other aspects of the game may qualify as trademarks and be protectable. For instance, a sound or sequence of sounds associated with starting a console or a game could potentially be registered as trademarks. The names and image of characters in a game may also be protected, especially for merchandising goods.  In short, for studios and designers involved in the video game industry, trademark registration is key to getting the most value out of a video game. This begins with a well-orchestrated protection strategy to minimize risk of conflicts and to build a solid and valuable brand. Copyrights A video game is a mix of literary, artistic and musical works which are protected by copyright, including computer program behind a game’s architecture is also explicitly protected by law.1 The protection offered by the Copyright Act (“CA”) applies as soon as a work is created, without the need for registration. This protection extends to the 176 member countries of the Berne Convention. Although the protection of a work by copyright is automatic, copyright owners may register their right with the Canadian Intellectual Property Office (“CIPO”) at any time. In particular, registration makes it easier to prove ownership of the right in the event of a dispute in that it creates the presumption that the person named in the registration owns the copyright. Copyright protection applies to the entirety of the game, as well as to its various components. Any infringement of these rights by a third party may give rise to a copyright infringement claim if the work or a substantial part of it is copied, unless a defense such as fair dealing is applicable. In this respect, the following activities may qualify as fair dealing: research and private study, education, parody as well as criticism or review and news reporting. Is video game live streaming copyright infringement? In recent years, the phenomenon of video game live streaming has really taken off. Video gamers film or record their computer screens and broadcast them on platforms such as YouTube and Twitch to show their characters, strategies and tactics for completing certain levels of a game. Some live streaming video gamers, who make this their living, have achieved celebrity status and have thousands of followers. Is live streaming a video game without express permission copyright infringement? The courts have yet to rule on whether live streaming games online constitutes a copyright infringement to communicate the work to the public by telecommunication under section 3(1)(f) of the Act. Faced with this widely popular trend, some studios accept this practice because positive reviews from such gamers can boost game sales. Others criticize the fact that they profit from video games without copyright owners receiving any compensation. Chances are that live streaming is not the highest priority of the video industry who is more concerned by the illegal downloads and counterfeits, which may explain why the courts have not yet had the opportunity to rule on video game live streaming. Patents Patents protect the functional aspects of an invention. The owner of a patent may prevent anyone from making, using or commercializing the patented innovation from the date the patent is obtained. Three aspects are taken into consideration before granting a patent:2 Novelty – The invention must be different or be innovative compared to anything that has been done before, anywhere in the world. Utility – The invention must have a useful function and economic value. Inventiveness – The invention must not be obvious to a person skilled in the field. In Canada, it is not possible to patent an abstract idea, but it is possible to patent the physical embodiment of that idea, provided that it meets the criteria of novelty, utility and inventiveness. Canadian patents in the video game industry Patents obtained in the video game industry mainly relate to consoles, controllers, headsets and other gaming accessories. The video game industry has proved to be innovative with the development of inventions that are both fun and useful. In 2012, Nike patented an invention to encourage physical activity among video game players.3 The patent describes a device placed in a gamer’s shoe when the gamer is physically active and connected to a video game. The energy spent by the gamer gives energy to the virtual character. Once the character’s energy is depleted, the gamer must engage in physical activity again. Are game play mechanics patentable? Certain aspects of a video game are less easy to patent, in particular the game play mechanics, which are a distinctive aspect from the standpoint of gamers when choosing a video game. The game play mechanics consists in the virtual experience of a video game: character movement, the interaction of the player with the game, the way the player moves through the levels of the game, etc. Unique and well-developed game play mechanics can be a great asset for a developer wanting to market new versions of a game. Gamers will go back to a familiar game to get immersed in a new experience. This makes patenting such an experience appealing for a studio. Given that game play mechanics are developed using computer code, it might seem that even if the criteria of novelty, utility and inventiveness were met, this type of invention could not be physically embodied and thus could not be patented. To be patented, game play mechanics must have a physical component in addition to the code itself. Consider a patent describing a video game in which a gamer’s heartbeat is integrated into the game,4 which is a good illustration of physical embodiment. Such transposition of a gamer’s vital signs is done physically through a heart monitor worn by the gamer and connected to the game. As all these aspects were described in the invention, this type of inventive game play mechanics was considered patentable. In the United States, the criteria for patents are similar to those in Canada, meaning that abstract game play mechanics would have to be linked to a physical aspect in order to be patentable.   Conclusion Implementing an IP protection strategy prior to launching a video game can prevent conflicts, increase the value of assets and strongly position a company in the market to maximize profits. Copyright Act, section 2. “A guide to patents,” Canadian Intellectual Property Office, Government of Canada, 2020-02-24. Patent No. 2,596,041, issued February 9, 2006. Patent No. 2,208,932, issued June 26, 1997.

The year 2020 will have been difficult for the vast majority of industries, and in particular for the arts, entertainment and recreation industry. The video game industry, however, is growing in leaps and bounds. For example, Nintendo and PlayStation have each set record sales for their games released in 2020, including Animal Crossing:New Horizons and The Last of UsPart II. Over the past few decades, the number of video game players has never stopped increasing.  The year 2020 will surely be no exception, especially considering the COVID-19 pandemic.  Playing a video game is not only a way to have fun: it is also a way to stay connected with a community that shares the same interests. The world of video games is so popular that the Government of Canada teamed up with the Entertainment Software Association of Canada (“ESAC”) to launch the #CrushCOVID campaign, using ESAC’s and its members’ social media platforms to share mobilization and awareness messages about public health measures. The video game industry is an economic powerhouse in Canada. According to the latest ESAC report, the industry contributed an estimated $4.5 billion to Canada’s GDP in 2019 — up 20% from 20171 — and these figures will likely continue to rise. This video game boom has a decisive impact on the value of companies innovating in this field. A number of recent transactions illustrate this. For instance, last September, Microsoft acquired Bethesda Softworks, one of the largest video game publishers, for US$7.5 billion. Microsoft also bought the Swedish company Mojang Studios, which designed the legendary game Minecraft, for US$2.5 billion in 2014. Closer to home in Montreal, Beat Games was bought by Facebook following the launch of its virtual reality game, Beat Saber, while Typhoon Studios was bought by Google. A successful video game may be lucrative in various ways, between the sale of video games themselves and merchandising goods, such as clothing and accessories, figurines, as well as game-inspired TV series with giants such as Netflix, Amazon Prime, HBO and Hulu, which are always on the lookout for hit TV series. Protecting its intellectual property (“IP”) on a video game is key to monetize all investment put into the development of a game. Doing so is even more crucial in the context where video game commercialization knows no borders, and a game can become an international success overnight. In short, any company should ask itself the following questions before launching its video game, to better position itself in relation to potential investors, licensees or partners, as well as competitors and counterfeiters: Does my company own all of the IP rights on the video game? What kind of IP protection applies and where should IP be protected? Let’s look at the first question. Does my company own all of the IP rights on the video game? Designing a video game usually involves a team of creators, including ideators, programmers, writers, visual and sound effects designers. All these people contribute to the creation of the work that is the video game and the underlying IP. For instance, Ubisoft worked with muralists and graphic designers for its recent game, Watch Dogs: Legion. They designed nearly 300 works to create a post-Brexit urban London. The initiative earned Ubisoft praise even before the game’s release last October.2 Depending on their contribution to the game’s design and their status as employees or consultants, these creators may qualify as authors. As such, they may be considered co-owners of the copyright on the video game. Generally, the copyrights developed by employees in the course of their employment belong to the employer,3 while a consultant remains the owner of the copyrights, unless otherwise agreed upon in writing. Thus, a company behind a video game must make sure that its consultants assigns their IP rights to ensure that it retains full ownership of the copyright. What happens if a consultant has not assigned the copyrights to the company? Can the consultant claim co-ownership of the entire game, or are the consultant’s rights limited to the part he created, such as specific drawings, or music for a particular scene? This is an important question which may have an impact on profit sharing. In Seggie c. Roofdog Games Inc.,4the Superior Court held that a person (non-employee) whose contribution to a game is minimal cannot be considered as a co-author of the entire video game, insofar as: The contribution is limited to a few images; These images are distinguishable from the rest of the work; and The parties had no common intention of creating a collaborative work. Seggie was therefore denied the compensation of 25% of the profits generated by the game that he had claimed. However, the court recognized that Seggie held a copyright on the works he specifically created and which were incorporated into the game, and granted him a compensation of $10,000. Incidentally, this compensation is in our opinion arguable, given that Seggie had agreed to work pro bono for his friend. This decision shows how important it is to have a copyright assignment signed by any person contributing to the conception of a work, regardless of the extent of their involvement. Waiver of moral rights In addition to the assignment of copyrights, the company owning a video game should also ensure that the authors sign a waiver of their moral rights, so as not to limit the potential to modify the game or to associate it with another product or a cause. Indeed, the authors of a work have moral rights that enable them to oppose the use of their work in connection with another product or a cause, service or institution to the prejudice of their honour or reputation. An example would be the use of music or a character from a video game to promote a cause or product, or a television series derived from the game whose script could potentially harm the author’s reputation. To make sure you have plenty of leeway to exploit the commercial potential of the game, a waiver of moral rights should be signed by any employee and consultant involved in the creation of the video game. Conclusion Launching a video game requires a huge investment in terms of resources, time and creativity. In order to develop an effective protection strategy, the first step is to make sure that you own all rights. Then, you are in a position to fully protect and enjoy your IP rights. The next article in this series will discuss the significance and application of these IP rights—i.e., trademarks, copyrights and patents—to the video game industry. “The Canadian Video Game Industry 2019,” Entertainment Software Association of Canada, November 2019, [online]. CLÉMENT, Éric, “Le talent montréalais en vedette dans un nouveau jeu d’Ubisoft,” published in La Presse+, October 21, 2020, edition. Copyright Act, subsection 13(3). Seggie c. Roofdog Games Inc., 2015 QCCS 6462.

The Canadian Intellectual Property Office (CIPO) has now made a further announcement concerning the extension of deadlines, to the effect that  deadlines falling within March 16 to August 7, 2020, are extended to August 10, 2020. CIPO is otherwise still open for business and our IP team members have been continuing operations and transacting with CIPO on a regular basis, in a remote and secure manner. Please do not hesitate to contact a member of our IP group should you have any questions. In addition, the Canadian government has enacted the COVID-19 Emergency Response Act, which, inter alia, has amended the Canadian Patent Act to add new section 19.4. This amendment provides a type of temporary compulsory licensing regime for patented technologies necessary to respond to a public health emergency. This is a temporary measure, since (1) if such authorization is granted, it will not last longer than 1 year (or may end sooner if the Minister of Health determines that such authorization is no longer necessary), and (2) no such authorization will be granted after Sept. 30, 2020. Under this provision, the authorized party may make, construct, use and sell the patented invention to the extent necessary to respond to public the health emergency. In return, the authorized party must pay the patentee what the Commissioner of Patents considers to be adequate remuneration under the circumstances. Rest assured that we remain at your service for all your legal needs, including those required to manage this pandemic, and that we will keep you informed as the situation evolves. We would like to offer our thoughts and support during these challenging times.

 The Canadian Intellectual Property Office (CIPO) has made a further announcement concerning the extension of deadlines, to the effect that deadlines falling within March 16 to April 30, 2020 are extended to May 1, 2020. CIPO is otherwise still open for business and our intellectual property team members have been continuing operations and transacting with CIPO on a regular basis, in a remote and secure manner. Please do not hesitate to contact a member of our IP group should you have any questions. Rest assured that we remain at your service for all your legal needs, including those required to manage this pandemic, and that we will keep you informed as the situation evolves. We would like to offer our thoughts and support during these challenging times.

Quebec’s Minister of Finance tabled his budget for 2020-2021, titled Your Future, your Budget1, on March 10. Among the new measures introduced by the government, new tax incentives for innovation and the commercialization of Quebec intellectual property were announced. The incentive deduction for the commercialization of innovations: establishing the most competitive tax rate in North America The Quebec government is committed to promoting research and development (R&D) and accelerating the development of innovative products through a highly competitive tax environment. The incentive deduction for the commercialization of innovations (the “IDCI”) will allow businesses to benefit from a combined tax rate of 17% on eligible income. Businesses that have an establishment in Quebec, have incurred R&D expenses there and commercialize intellectual property (“IP”) in Quebec will have their revenues from the sale or rental of goods, services and royalties from such IP taxed in Quebec at an effective rate of 2%. IP covered by the IDCI includes software protected by copyrights, patents, certificates of supplementary protection for drugs and plant breeders’ rights. The IDCI also replaces the deduction for innovative companies as ofJanuary 1, 2021. Companies eligible for that deduction will be eligible for the IDCI. The synergy capital tax credit: investing in start-ups The synergy capital tax credit is designed to encourage businesses to invest in innovative SMBs with high growth potential, more commonly known as “start-ups.” A business corporation with a permanent establishment in Quebec that is not primarily engaged in financing or investing in businesses may receive a non-refundable tax credit equal to 30% of the value of its eligible investment, up to a maximum of $750,000 per year, for a total tax credit of $225,000 per year. An eligible investment is an equity participation that does not result in control of an eligible SMB, which the investing corporation deals with at arm’s length. An eligible SMB is a Canadian-controlled private corporation with a permanent establishment in Quebec, with paid-up capital of less than $15 million and gross income of less than $10 million, operating in one of the following sectors: Green technology; Information technology; Life sciences; Innovative manufacturing; Artificial intelligence. Corporations claiming the synergy capital tax credit will have to hold the shares of the eligible SMB for a minimum period of 5 years. Start-ups interested in obtaining the designation of eligible SMB will have to submit an application to Investissement Québec. The investment and innovation tax credit: Modernizing SMBs The investment and innovation tax credit (the “C3i”) is designed to encourage businesses in all sectors to invest in their modernization, particularly in digitization and the use of leading-edge technology. A credit of 10%, 15% or 20%, determined according to the economic vitality index of the area where the investments are made, will be applicable for the acquisition of: Manufacturing and processing equipment; Computer hardware; Management software packages. The C3i will apply to acquisitions made before January 1, 2025, and will be fully refundable for SMBs2. Businesses with total assets and gross income of $100 million or more will also have access to this credit, although it will not be refundable. Eligible expenses for the C3i will be amounts exceeding $5,000 for the acquisition of computer hardware or management software packages and amounts exceeding $12,500 for the acquisition of manufacturing and processing equipment. Businesses involved in the distribution of such hardware and software packages would certainly benefit from informing their customers that the acquisition of their products is potentially eligible for the C3i. Businesses located in resource regions and still benefiting from the tax credit to foster the acquisition of manufacturing and processing equipment introduced in 2008 will be able to choose to continue to benefit from this credit or claim the C3i. Conclusion Quebec’s tax landscape is full of opportunities for innovators and creators of leading-edge technology. We should also mention the enhancement of R&D tax credits that promote collaboration between private businesses and research institutions that contribute to the vitality of Quebec’s knowledge economy. If you are a company involved in R&D and IP commercialization in Quebec, the professionals of Lavery’s intellectual property and taxation teams will be able to support you throughout your projects.   Ministère des Finances, Budget 2020-2021, “Your Future, your Budget,” City of Québec, Government of Quebec The credit repayment rate decreases linearly based on an SMB’s total assets and gross income when they exceed $50 million but are less than $100 million.

The new provisions of the Trademarks Act allow for earlier intervention with the Registrar in an attempt to prevent the registration of trademarks that create confusion with registered or applied-for trademarks through a notification system. As the owner of pending or registered trademarks in Canada, it is in your interest to know and take advantage of the notification procedure, as it allows you to become more proactive and possibly avoid the costs associated with traditional opposition proceedings. Indeed, the notification procedure allows you to bring to the Registrar's attention grounds bearing on the registrability of a third party’s pending trademark application, as soon as the application is filed, without waiting for it to be published in the Trademarks Journal. The grounds that may be invoked in a notification have recently been specified by the Trademarks Office: The mark applied for creates confusion with a registered mark or with a mark for which a previous application for registration is pending. One or more registered trademarks are used in a trademark application to describe the claimed goods and services. In order to protect your rights and take advantage of the notification procedure, make sure that you have proper trademark monitoring services that allow you to be promptly informed of new trademark applications that may infringe upon your exclusive rights. For any questions regarding trademark protection, the notification process as well as our trademark monitoring services, we invite you to contact our professionals.

A few weeks before the coming into force of the amendments to the Trade-marks Act, the following is a reminder of the actions you should consider taking before June 17, 2019 to protect your rights and save costs. Actions To Take Benefits Renew your registrations and classify your products & services Cost savings before June 17, 2019: $50 per renewal. $125 for each class of products and services (beyond the 1st class), since products and services must henceforth be classified according to a system of 45 classes. Protect the trademarks associated with your main products & services Review your trademark portfolio and ensure that your currently marketed products and services are protected. If not, file an application before June 17 to save costs: before June 17: a single $250 filing fee, regardless of the number of classes of products and services covered by your application. on or after June 17: a $330 fee for the 1st class + $125 per additional class. Protect your trademarks for your future plans Do you intend to launch new lines of products and services in the next few years? Take advantage of lower fees until June 17 and the elimination of the declaration of use by filing a trademark application to extend your protection. Beware of trolls! Monitor your marks The elimination of the declaration of use has encouraged the spread of trademark trolls to Canada. Use a monitoring service to react quickly to third parties who attempt to misappropriate your mark. The trademark registration process will be greatly simplified as of June 17, 2019, particularly because of the elimination of the declaration of use. The new registration process will indeed allow trademark registration, without any use requirement in Canada by the applicant. To avoid disputes involving your trademarks, remember that it is important to conduct searches before launching a new mark and to quickly file applications for registration.

As we reported on October 15, 2018, Canada, Mexico, and the United States were finally able to agree on the terms of the United States–Mexico–Canada Agreement (USMCA) on September 30, 2018. The USMCA is intended to replace the North American Free Trade Agreement (NAFTA), which has been in place for over 20 years. The USMCA comprises 34 Chapters, one of which is dedicated entirely to Intellectual Property. With such a focus on Intellectual Property, it is worth asking what changes this agreement will bring forth to current Canadian IP laws. While this Chapter may seem extensive, many of its provisions reflect what is already provided for under Canadian law. However, there are several changes worth noting, most of which will bring our IP regime closer to that of our US counterparts. What follows is a brief summary of the more significant changes the USMCA will bring to the fields of patents, trademarks, copyrights, industrial designs and border measures. Patents and Undisclosed Test or Other Data Patent term adjustment The USMCA will provide for a patent term adjustment for unreasonable delays in the issuance of patents. This means that the Canadian Intellectual Property Office (CIPO) will compensate for such delays by adjusting the terms of issued patents, similar in principle to the current system at the United States Patent and Trademark Office. These “unreasonable delays” will include delays where the issuance of a patent occurs more than five years after the filing date, or three years after a request for examination has been made, whichever is later. Canada will have 4.5 years to implement this change once the USMCA enters into force. Patent Law Treaty Under the USMCA, the parties shall give due consideration to ratifying or acceding to the Patent Law Treaty (PLT), or adopt or maintain procedural standards consistent with the objective of the PLT. The Canadian Patent Act has already been amended to this end, however the relevant provisions are not yet in force pending the preparation of amended Patent Rules to implement such changes. Extended data protection for biologics Another significant change concerns data protection for biologics (patented or not), which will be increased from 8 years to 10 years (still 2 years less than what is presently available in the US) from the date of first marketing approval. Canada will have 5 years to implement this change once the USMCA enters into force. Trademarks The USMCA describes a number of obligations related to Canadian trademarks. However, many of these obligations are already met or will soon be, once Canada implements the amendments to its trademark laws in 2019. This includes not denying registration to sound marks and making “best efforts” to register scent marks, as well as adopting the Madrid Protocol, the Singapore Treaty and a trademark classification system consistent with the Nice Agreement. It appears however that amendments may be required to include protection for “collective marks” (i.e. marks used by members of cooperative, association or other collective group or organization) and some changes may also be necessary with respect to geographical indications As for “well known-marks”, it is questionable whether additional statutory protection will be necessary to meet the requirements of the USMCA. Furthermore, the USMCA requires that Canada implement a system that provides for “pre-established damages” or “additional damages” in civil proceedings with respect to trademark counterfeiting, to deter infringement and fully compensate trademark owners. As “additional damages” seem to include exemplary or punitive damages, no change to the law would be required to meet USMCA requirements. The Canadian government could however seize this opportunity to incorporate the concept of “statutory damages”, as is the case under the Copyright Act. Under such a system, those alleging infringement could elect to obtain damages in an amount that is explicitly stated in law, rather than having to prove such damages based on the level of harm they have suffered. Copyrights Canadian copyrights will experience at least one significant change: an increase in the term of protection from 50 to 70 years after the author’s death. Once again, this change will further align our copyright law scheme with that of the US. It is also worth noting that the USMCA includes copyright provisions related to Internet Service Providers, including legal incentives for ISPs to cooperate with copyright holders, as well as limitations in the law that preclude monetary relief from copyright infringement that ISPs do not control, initiate, or direct. In order to benefit from this regime, ISPs will have to implement expeditious measures for removing access to infringing content and adopt a policy for terminating the accounts of repeat infringers. Industrial designs Consistent with the Hague Agreement, the USMCA notably sets forth a term of industrial design protection of a maximum of 15 years, which is 5 years longer than the current 10 year term under Canadian practice. Canada has already joined the Hague Agreement and is implementing its provisions, including the maximum 15 year term, which shall come into force on November 5, 2018. Border Measures A welcome change under USMCA will be the increased power for customs officials including the authority to initiate border measures against suspected counterfeits or pirated goods imported or destined for export. Such authority will extend to goods in transit or admitted into or exiting from a free trade zone or bonded warehouse. Summary While the final form of the USMCA remains to be seen (it still needs to be ratified by the three countries), the above changes point to a consistent trend: the strengthening of Canadian intellectual property rights. It remains to be seen how and when these provisions will be implemented into current Canadian laws, as well as how they will be enforced once adopted. The Agreement, in addition to the Chapter pertaining to IP law, can be accessed using the following links: USMCA and Chapter 20 (Intellectual Property).

If you sell your products on Amazon, you can benefit from enrolling your trademarks with the Amazon Brand Registry. The Amazon Registry is a free program accessible to monitor brands on Amazon’s website. This program includes proprietary search tools designed specifically to help online merchants identify trademark infringements on Amazon’s platform. If an infringing product is found, the registered owner can request that Amazon remove the product from its website. Companies registered with this program may also benefit from more control over product listings, mainly in terms of product titles, descriptions, images and advertisement. Goudreau Gage Dubuc, one of the leading intellectual property firms in Canada, joins Lavery Lawyers. The two firms have integrated their operations in order to offer their clients a complete range of legal services. The integration consolidates Lavery’s multidisciplinary approach. As the largest independent law firm in Quebec, Lavery is continuing to grow by adding the expertise brought by lawyers, patent agents and trademark agents specializing in intellectual property law, who belong to one of the most respected teams in the country. To learn more, visit www.YourIPLawyers.ca. --> Eligibility criteria To enroll a trademark with the Amazon Brand Registry, the following requirements must be met: The trademark must be registered in each country where you wish to enroll. To this day, Amazon accepts only trademarks registered in one of the following countries: Canada, United States, Mexico, Australia, India, Japan, France, Germany, Italy, Spain, United Kingdom or on the European Union Registry. The trademark must be in the form of words or a logo combined with words, letters or numbers. It follows that “design” marks consisting solely of logos are not eligible for the Register, unless they also comprise words, numbers or letters. The trademark must match the brand name that appears on the products or on their packaging. Additional information If your trademark is eligible for the Amazon Brand Registry program, you will have to provide the following information to complete your enrolment: your trademark, the registration number, images of products and packaging showing the trademark, a list of categories in which your trademark should be listed and a list of countries in which your products are manufactured and distributed. We can help you! If you wish to use the Amazon Brand Registry but have not yet registered your trademark in Canada (or in one of the eligible countries), GGD can advise you on the most efficient procedure to register your trademarks. If your trademark is already enrolled with the Amazon Brand Registry, we can assist you in monitoring your brands on Amazon’s platform as your authorized agent. Please do not hesitate to contact the members of our team for any questions you may have concerning the registration process of your trademarks in different countries in which you may have commercial interest and the Amazon Brand Registry.

While negotiating the Comprehensive Economic and Trade Agreement between the EU and Canada (CETA) with the European Union, Canada has agreed to modify its legislative scheme governing Geographical Indications («GIs»). In this context, Canada has recognized protection for 179 new GIs. The new provisions relating to GI descriptions will come into force on September 21st, 2017. What do these provisions mean for agri-food companies? Will these companies have to modify their labelling information, packaging or promotional material? For a better understanding of what lies ahead, here is a summary of the new legislative scheme and its exceptions, along with a set of recommendations. Goudreau Gage Dubuc, one of the leading intellectual property firms in Canada, joins Lavery Lawyers. The two firms have integrated their operations in order to offer their clients a complete range of legal services. The integration consolidates Lavery’s multidisciplinary approach. As the largest independent law firm in Quebec, Lavery is continuing to grow by adding the expertise brought by lawyers, patent agents and trademark agents specializing in intellectual property law, who belong to one of the most respected teams in the country. To learn more, visit www.YourIPLawyers.ca. --> THE NEW LEGISLATIVE SCHEME 1. Updated definition: Previously limited to wines and spirits, the new GI regime will soon be broaden to include agricultural foods and products. Regions renowned for products such as cheeses, meats, fruits and vegetables, as well as other food products, will have the right to request that their name be recognized as a GI. 2. New GIs: The complete list of the new GIs can be found here. The most well-known GIs among the following categories are: Cheeses: Feta, Gorgonzola, Parmagiano Reggiano, Pecorino Romano, Comté, Roquefort, Brie de Meaux, Morbier, Epoisses, Beaufort, Bleu d’Auvergne, Mozzarella di bufala Campana, Gouda Holland; Meats: Jambon de Bayonne, Prosciutto di Parma, Proscuitto di S. Daniele, Prosciutto Toscano, Prosciutto di Modena, Mortadella Bologna; Oils, nuts and olives: Huile d’olive Kalamata, Huile d’olive de Haute-Provence, Huile essentielle de Haute-Provence. 3. Restrictions: Unless a specific exception applies, it will be prohibited to use a GI (or a translation thereof) if: the product does not originate from the region indicated by the GI; the product originates from the region indicated by the GI but was not produced or manufactured in accordance with the laws and regulations governing this region. To be noted: these restrictions apply only to the GIs indicated in the GIs list. Accordingly, the use of terms such as « parmesan », « pecorino », « mozzarella », « brie », « gouda », « mortadelle » and « prosciutto » will remain legal. 4. Other prohibitions: By no means will a company be allowed to designate or present a product in a manner that is misleading as to its geographical origin. When deciding whether the public could possibly be misled as to the place of origin of a product, one can consider the visual aspect of the product’s presentation. For example, flag illustrations and emblematic colors that evoke a certain region may create a false impression as to the origin of a product. It should be noted that these prohibitions apply even if the true place of origin of a product is indicated on the packaging. Moreover, the addition of expressions such as “kind”, “type”, “style” or “imitation” will not constitute an acceptable defense, unless a specific exception to that effect has been stipulated by law. 5. Prohibited actions: the new legislation not only prohibits promoting and selling goods likely to mislead customers as to their origin, but also prohibits manufacturing, preparing, packaging, labelling, importing and advertising such goods. EXCEPTIONS Many exceptions are provided by law and are worthy of consideration: 1. Trademarks: trademarks that have been registered, applied for or used in good faith as of September 21st, 2017 will not be affected by the new legislative scheme. This exception can also be invoked in regard to any new GI added to the GIs list in the future. 2. Prior use of the terms Feta, Gorgonzola, Asagio, Fontina and Munster: Any persons, including their successors and assignees, who made commercial use of the above-mentioned indications prior to October 18th, 2013 can continue to use them. These terms may also be used in combination with expressions such as “kind”, “type”, “style” or “imitation”, as long as the place of origin is legible and visible on the product. 3. Prior use of terms Jambon de Bayonne and Beaufort: Any persons, including their successors and assignees, who made commercial use of these indications for at least 10 years prior to October 18th, 2013 may continue to use them. It is to be noted that a business having used these terms for less than 10 years prior to October 18th, 2013 will benefit from a transitional period of 5 years to modify its usage. 4. Use of terms Jambon Forêt-Noire, parmesan, orange Valencia, bacon tyrolien, bière bavaroise, bière Munich and fromage St-George: These terms may be used under the new legislative scheme, so long as their usage does not mislead the public regarding the origin of the product they are associated with. 5. Translations: the new provisions do not prohibit the use of a translation of a GI that is identical to a term commonly used as the name of a product in Canada. RECOMMENDATIONS In order to face the new GIs and the upcoming competition in the agri-food industry, companies should consider the following recommendations: going through the GIs list and identifying which ones are currently used by the company; taking an inventory of labels, packaging and promotional materials featuring GIs; analyzing the CETA’s provisions to determine if the company can benefit from any exceptions; documenting prior use of GIs for the purpose of invoking prior use exceptions; reviewing the chains of title relating to GIs to confirm ownership and making sure to have written assignments; evaluating the benefits of filing an application for the registration of all marks containing geographic references (including logos or images evoking a specific region); implementing a monitoring system to identify an potentially oppose to new GI requests; protecting the company’s geographic designations through (i) certification marks under The ­Trade-Marks Act, (ii) the Act respecting reserved designations and added-value claims in force in the province of Québec, and (iii) the new legal protection system offered to GIs, once these provisions come into force. Do not hesitate to contact our team for all inquiries related to GIs and the protection or defense of your trademarks.

A recent Federal Court decision 1 reiterates the importance of protecting the main design elements featured on products and packaging. This decision also recalls the dangers of too closely mimicking the appearance of a competitor’s products. Goudreau Gage Dubuc, one of the leading intellectual property firms in Canada, joins Lavery Lawyers. The two firms have integrated their operations in order to offer their clients a complete range of legal services. The integration consolidates Lavery’s multidisciplinary approach. As the largest independent law firm in Quebec, Lavery is continuing to grow by adding the expertise brought by lawyers, patent agents and trademark agents specializing in intellectual property law, who belong to one of the most respected teams in the country. To learn more, visit www.YourIPLawyers.ca. --> In its ruling, the Federal Court sided with Diageo Canada Inc. (“Diageo”) and ordered Heaven Hill Distilleries, Inc. (“Heaven Hill”) to cease the sale of its ADMIRAL NELSON’S rum. The Court came to this decision after concluding that the design elements of the ADMIRAL NELSON’S label caused confusion with the label of CAPTAIN MORGAN bottles of rum.   In addition to having to cease selling and promoting its product, Heaven Hill will have to comply with the following order from the Court (unless an appeal is filed): destroy the bottles and all material containing the image in question (including all packages, labels, and advertising material); pay damages to Diageo or pay to Diageo the profits made from the sale of its ADMIRAL NELSON’S rum. Here are some tips to remember in order to avoid conflicts and the drastic consequences that may follow: seek advice from experts before adopting visual elements similar to those of your competitors; carry out searches for the main design elements that you intend to use on your labels and packaging; protect the main design elements that distinguish your products to be in a strong position to act against competitors if need be. Prevention is better than cure! Diageo Canada Inc. v. Heaven Hill Distilleries Inc.and al 2017 FC 571

On November 24th, 2016, the Quebec government has adopted new regulations regarding the public display of non-French trade-marks in Quebec. The new regulations may be summarized as follows: trade-marks do not have to be translated into French but French language must be sufficiently present in all signs on the exterior of buildings. Here are several important points worth remembering: Scope of the new regulations: the new regulations only apply to signs on the exterior of buildings, and they are not aimed at product labels or packaging, nor are they aimed at websites or social media.   Signs on the exterior of buildings include: signs on roofs, as well as on bollards and other structures independent from buildings; signs placed outside premises, kiosks or counters located inside buildings; signs placed inside buildings or premises if they are intended to be seen from outside. Goudreau Gage Dubuc, one of the leading intellectual property firms in Canada, joins Lavery Lawyers. The two firms have integrated their operations in order to offer their clients a complete range of legal services. The integration consolidates Lavery’s multidisciplinary approach. As the largest independent law firm in Quebec, Lavery is continuing to grow by adding the expertise brought by lawyers, patent agents and trademark agents specializing in intellectual property law, who belong to one of the most respected teams in the country. To learn more, visit www.YourIPLawyers.ca. --> Sufficient presence of French: The presence of French language will be deemed sufficient if the sign includes a French generic term or descriptor of the products or services; a French slogan or any other term providing information related to the products or services, provided that such French terms are: permanently visible as the trade-mark being displayed; and legible in the same visual field as that of the trade-mark.   The presence of French shall be deemed satisfactory if the French terms are designed, lighted, and situated so that they can be easily read at the same time as the trade-mark. This does not necessarily require that the French terms be present in the same place, in the same number, in the same materials or in the same size as the trade-mark. In order to assess the legibility of the French terms, the legislator has gone so far as to provide distinct points of reference namely: from the sidewalk, for the exterior of buildings; from the middle of a corridor, for a premises in a building; and from a highway, for trade-marks visible therefrom.   The legibility of a French term will be considered insufficient if it is necessary to be within one meter of a display to read it, unless the legibility of the mark also requires such proximity. Deadline to comply with the new regulations: Since November 24, 2016, any new signs on the exterior of buildings (or any replacement signs) must respect the new regulations. Owners of signs mounted before November 24, 2016 benefit from a transitional period until November 24, 2019 to comply with the new regulations.   Please do not hesitate to contact the members of our team for any questions concerning the Charter of the French Language and its regulations.