Evidence of meeting #184 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was proposed.
A recording is available from Parliament.
5:05 p.m.
Director General, Marketplace Framework Policy Branch, Innovation, Science and Economic Development Canada
It is appropriate use, yes. It may on application require the corporation or its agent or mandatary to allow the applicant access to the registry of the corporation referred to in proposed subsection 21.1(1) during the usual business hours.
5:05 p.m.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
No personal exemption is possible for safety reasons. That's good enough. Thank you.
5:05 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Mark, who would currently have access to this information?
5:05 p.m.
Director General, Marketplace Framework Policy Branch, Innovation, Science and Economic Development Canada
Right now there are no requirements for corporations to seek out beneficial ownership information, so the obligations are for the corporation to hold a registry of shareholders. The shareholder is simply the shareholder, not the beneficial owner of that share.
That information right now is similarly available to other shareholders of the business and the director of Corporations Canada. You're allowed to know who you're in business with, the director of Corporations Canada has access to it and law authority has access to it under warrant.
5:05 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
To clarify that, you're allowed to know who you're in business with, but are you allowed to know who the actual owner is behind it?
5:05 p.m.
Director General, Marketplace Framework Policy Branch, Innovation, Science and Economic Development Canada
Right now, no, but after these provisions, then yes, you will have access to the registry of beneficial owners.
5:05 p.m.
Director General, Marketplace Framework Policy Branch, Innovation, Science and Economic Development Canada
The corporations would. That's correct.
5:05 p.m.
Liberal
The Chair Liberal Wayne Easter
Okay, I think that's it for part 4 of division 6.
Thank you all, and I believe, Mr. Schaan, you're going to be here for the next round—part 4, division 7, intellectual property strategy. There are quite a number of witnesses for this one under the Patent Act, trademarks, Copyright Act, college of patents agents and trademark agents act, etc.
We may have to get you guys to introduce yourselves. Who's leading off?
5:10 p.m.
Director General, Marketplace Framework Policy Branch, Innovation, Science and Economic Development Canada
I am.
5:10 p.m.
Liberal
The Chair Liberal Wayne Easter
Okay, Mr. Schaan.
We have quite a mixture.
Mr. Schaan was introduced before. We have Mr. Blanar, senior policy analyst, patent policy directorate; Ms. Flewelling, senior policy adviser; Ms. MacMillan, vice-president, corporate services; Mr. Johnstone, director general, national programs and business services; and Mr. Simard, director, copyright and trademark policy directorate.
The floor is yours again, Mark.
5:10 p.m.
Director General, Marketplace Framework Policy Branch, Innovation, Science and Economic Development Canada
Great. I will walk you through the various clauses related to division 7, clauses 187 to 302. They're all related to Canada's national intellectual property strategy. I'll try to walk you through each act as we go.
By a very quick way of background, budget 2017 committed the government to creating a comprehensive national intellectual property strategy within one year. Budget 2018 then provided $85 million, with $10 million ongoing for a number of programs and services related to that intellectual property strategy, and similarly committed to making amendments to the various intellectual property statutes to try to ensure that it was preventing any undue barriers to innovation and also encouraging and attracting investment and an efficient and fair economy.
I'll start with part 4, division 7, subdivision A, which is clauses 187 to 213. They relate to the Patent Act. The changes to the Patent Act essentially relate to five specific measures. The first is to establish minimum requirements for patent demand letters, to allow the recipients to assess the merits of the claims. This essentially ensures that any recipient of a patent demand letter will have sufficient information to be able to make an appropriate adjudication of its merits.
The second is to allow the court to admit patent examination history, sometimes called file wrappers, as evidence to prevent patent owners from taking different positions during litigation than that which they took before the office. The third is to codify the common law patent research exception. The fourth is to modernize prior user rights to ensure that a subsequently patented invention doesn't require a business to cease operations.
Finally, the last is to require subsequent patent owners to honour licensing commitments made by previous owners to standard-setting organizations when incorporating patented technologies into standards. This is sometimes called standard essential patents, and this simply ensures that the negotiated agreements reached between a standard essential patent owner and its users continue even when there's a transfer of ownership.
I'll pause on the Patent Act changes because that's subdivision A, and I can take any questions on that before I move to subdivision B.
5:10 p.m.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
Thank you, Mr. Vice-Chair.
Could you please explain the fourth measure, in terms of in what situation that would occur? You could lay out a typical case or an actual case.
5:15 p.m.
Director General, Marketplace Framework Policy Branch, Innovation, Science and Economic Development Canada
Under the current act right now, when prior user rights are established between an entity.... Essentially you've used a technology without any knowledge that someone else had subsequently invented it. You've been using it and it's fundamental to your business. Right now when that patent is ultimately granted, the law requires you to cease any use of that patented technology, which usually requires you to cease operation. Essentially you end the practice even though you had previously established the capacity to use it independent of knowing that someone else was subsequently patenting it. This would allow you to continue to be able to use that under your prior user rights.
The notion is that you and I are both independent business people. We both come up with the same idea. Prior user right is nullified if I actually did know, if I had been secretly googling you and finding out that you had actually also been taking this action, but it essentially prevents me from having to cease my operations, because I had established prior user rights to the technology, absent knowledge that it was patented.
5:15 p.m.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
Is this a common standard in other industrialized nations with similar patent regimes?
5:15 p.m.
Director General, Marketplace Framework Policy Branch, Innovation, Science and Economic Development Canada
Yes, and there are definitely those who have established prior user rights similar to this.
5:15 p.m.
Conservative
The Vice-Chair Conservative Pierre Poilievre
My question is about the college. Is this the right time?
5:15 p.m.
Director General, Marketplace Framework Policy Branch, Innovation, Science and Economic Development Canada
No. We'll get to that in subdivision D.
5:15 p.m.
Conservative
The Vice-Chair Conservative Pierre Poilievre
Are there any other questions? All right, we'll continue.
5:15 p.m.
Director General, Marketplace Framework Policy Branch, Innovation, Science and Economic Development Canada
Then we'll switch to the Trade-marks Act changes. This is part 4, division 7, subdivision B, clauses 214 to 242.
Just by very quick way of background, this is in part related to concerns from trademark stakeholders about the possibility for what some people call “trademark squatters”, individuals who take out trademarks with no intention of using them for the purposes of trying to shake down individuals who they believe are already using that trademark in a non-trademarked way, or likely will anticipate the need of someone for that trademark.
What this does is a number of things. First, it adds bad faith as a ground of opposition to the register of a trademark and for the invalidation of a trademark.
Second, it prevents the owner of a registered trademark from obtaining relief for acts done contrary to that trademark during the first three years after the trademark is registered, unless the trademark was in use during that period or special circumstances exist that excuse the absence of use.
Very quickly, without getting into too much of the technical details of trademark law, one of the exceptions to use in the trademark process is during the first three years of a trademark, because, in many cases, you will have trademarked a good, but you can't use it because you're just getting going.
Our concern was that it could be a trademark squatter who is hiding under that three-year exception to be able to potentially still use that three years to shake someone down for cash. What we have said is that, during those three years, you have no access to remedies, so you can't pursue damages against that individual if you're not using the trademark.
We also clarify that the prohibitions in subparagraph 9(1)(n)(iii) do not apply in section 11 of the act with respect to a badge, crest, emblem or mark that was the subject of a public notice of adoption and used as an official mark if the entity that made the request for the public notice is not a public authority or no longer exists.
Very briefly, this relates to the system of official marks in Canada. Official marks are, by and large, relegated or are subscribed to public authorities and public entities. The Canada Wordmark is a good example. There is a whole host of other badges and crests that are official marks. They're put on the registry by public authorities. There are a lot of them, and one of the challenges is that some of the people who put them on the list weren't public authorities under the definition, so when people seek to use that official mark, they're prevented from doing so because this public authority put the official mark on the registry.
The other thing is that many of them no longer exist. There are many official marks related to the 1976 Montreal Olympics. There are many related to Canada Games in most cities and provinces across the country, and many for events that took place decades ago. People are prevented from using those official marks currently, despite the fact that they can't reach an agreement with the entity to use them, because the entity doesn't exist anymore. This, essentially, will allow people to be able to use those official marks without having to seek an entity when the entity is no longer in place.
We then also modernized the conduct of various proceedings before the registrar of trademarks under the act, including by providing the registrar with additional powers in such proceedings. This is essentially to give some additional teeth to the trademarks opposition board, including the opportunity for case management and the ability to potentially levy costs in cases where people are making frivolous use of the trademarks opposition board.
Finally, we make certain housekeeping amendments to provisions of the act that are enacted by the Economic Action Plan 2014 Act, No. 1, and the Combating Counterfeit Products Act, which is essentially to bring us in line with changes in anticipation of Canada's accession to the Madrid protocol and that lay on from these provisions that I laid out earlier.
5:20 p.m.
Conservative
5:20 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
I'm going to have to admit that, if our colleague Parliamentary Secretary Lametti were here, who I understand is a former professor of this material at McGill, he would have a lot more insightful questions to ask than we would, than I would, for sure.
But I do want to ask about the Internet trademark squatters. My understanding is that the U.S. system, prior to this material being in the BIA, was more robust or is more robust than ours, and this material in the BIA should elevate our IP protection.