Draft – Cost awards in proceedings under sections 11.13, 38 and 45 of the Trademarks Act

Relevant legislation and practice notices

This draft Practice Notice makes reference to the following legislation and practice notices:

• Trademarks Act (the Act)
• Trademarks Regulations (the Regulations)
• Practice in Objection Proceedings under Section 11.13 of the Trademarks Act
• Practice in trademark opposition proceedings
• Opposition to Protocol applications and section 45 cancellation proceedings against Protocol registrations
• Practice in section 45 proceedings
• Divisional applications in opposition
• Draft - Case management in proceedings under sections 11.13, 38 and 45 of the Trademarks Act
• Appeals of the Registrar's Decisions: Service and Filing of Documents, Stays and Judgments

On this page

• I Introduction
• II Request for cost awards
  • II.1 Timing
  • II.2 Filing a request
    • II.2.a Plan ahead
    • II.2.b Procedure when the online system for filing a request for costs is down
    • II.2.c Requirement to copy the other party
  • II.3 Reasons and particulars
    • II.3.a Bad faith
    • II.3.b Divisional application
    • II.3.c Late cancellation of hearing
    • II.3.d Unreasonable conduct
• III Response
• IV Decision on costs
• V Enforcement
• VI Cost Awards in Proceedings Pending at Coming Into Force
• Schedule A (Sample form for a request for costs)

I. Introduction

The Registrar may, at the request of a party, award costs in proceedings under sections 11.13, 38 and 45 of the Act in specific circumstances. Costs may be awarded against a party that has engaged in certain circumstances during a proceeding and will help ensure that parties are incentivized to move efficiently through a proceeding before the Registrar.

Cost awards are not intended to prevent a party from participating fully in a proceeding. As such, costs will only be awarded in exceptional cases.

II. Request for Cost Awards

The Registrar will only consider awarding costs in a proceeding at the request of a party (section XX, XX or XX of the Regulations). The Registrar will not do so on its own initiative.

II.1 Timing

If neither party requests to make representations to the Registrar at a hearing under section 58, 74(1) or 93(1) of the Regulations, a party may file a request for costs within 14 days after the expiry of the one-month period for filing a hearing request (section XX, XX or XX of the Regulations).

If both parties file requests to be heard that are conditional on the other party also requesting to be heard, the file will be treated as if neither party has requested to be heard. As such, a party may file a request for costs within 14 days after the expiry of the one-month period for filing a hearing request (section XX, XX or XX of the Regulations).

If, however, one party requests to make representations at a hearing in accordance with section 58(1), 74 or 93(1) of the Regulations, a party may file a request for costs within 14 days after either the end of the hearing or after the Registrar notifies the parties that the hearing has been cancelled (section XX, XX or XX of the Regulations). This is to ensure that a party may request costs for unreasonable conduct leading up to and at the hearing.

Upon request, the Registrar will generally grant a single extension of time of up to 14 days of the deadline to file a request for costs. All requests for an extension of time pursuant to section 47(1) of the Act must be accompanied by the prescribed fee (See section X of Practice in trademark opposition proceedings).

II.2 Filing a Request

A request for costs must be filed in writing through the General Correspondence tab of the Trademarks Opposition Board (TMOB)'s online E-services (section XX, XX or XX of the Regulations). The request should be in 12 point font and not exceed one single sided, standard letter size page in length but may be accompanied by relevant supporting documentation not otherwise included in the Registrar's files.

A request for costs not filed through the General Correspondence tab of the TMOB online E-services, including any paper requests and any submissions made as part of the written representations or in the statement of opposition, will not be considered by the Registrar.

II.2.a Plan ahead

It is recommended to plan ahead. Because unexpected technological problems can occur, users should keep filing deadlines in mind and allow plenty of time to resolve any issues which may arise.

II.2.b Procedure when the on-line system for filing a request for costs is down

If the TMOB online E-services are down during CIPO's business hours, the Registrar will place an alert on CIPO's website, send a notification through the Trademarks Listserv and change the voicemail message on the general information number to advise that the system is down.

If, when filing a request for costs, outside of business hours, the TMOB online E-services are down or no confirmation that the request for costs has been received upon filing, please follow the procedure outlined below for when the TMOB online E-services are down.

When the TMOB online E-services are down or no confirmation is received outside of business hours, requests for costs must be filed by attaching the request to an email and sending it to the following address: cipotmobrec-opiccomcrec@ised-isde.gc.ca. To assist in the preparation of an offline request, the form at Schedule A should be used. Requests for costs sent to this email address at any time other than when the (i) TMOB online E-services are down or (ii) no confirmation has been sent out will not be considered by the Registrar.

II.2.c Requirement to copy the other party

The party requesting costs is required to copy the other party with its request (section 44, 69, or 80 of the Regulations).

II.3 Reasons and Particulars

A request for costs must include the reasons for the request and the particulars of the circumstances for which costs are sought (section XX, XX or XX of the Regulations). The request should be in 12 point font and not exceed 1 single sided, standard letter size page in length but may be accompanied by relevant supporting documentation which is not included in the Registrar's files.

In the case of an opposition proceeding, section XX of the Regulations provides that the Registrar may award costs:

1. if an application for the registration of a trademark is refused with respect to one or more of the goods or services on the ground that it was filed in bad faith;
2. if a divisional application was filed on or after the day on which the original application is advertised under subsection 37(1) of the Act;
3. if a party who filed a request for hearing withdraws their request for a hearing less than two weeks prior to the scheduled hearing date; or
4. if a party engages in unreasonable conduct which causes undue delay, complexity or expense in a proceeding.

In the case of a section 45 proceeding or an objection proceeding, the Registrar may only award costs if a party who filed a request for hearing withdraws their request for a hearing less than two weeks prior to the scheduled hearing date or if a party engages in unreasonable conduct which causes undue delay, complexity or expense in a proceeding (section XX and XX of the Regulations).

II.3.a Bad faith

In the case of a request for costs for the reason that an application that is the subject of an opposition proceeding was filed in bad faith, it would be sufficient for the opponent to identify the relevant ground of opposition set out in the statement of opposition. In the case where the parties are involved in multiple proceedings including a successful bad faith ground of opposition, costs will generally be awarded per application.

II.3.b Divisional application

In the case of a request for costs for the reason that an application that is the subject of an opposition proceeding is a divisional application filed on or after the day on which the original application is advertised under subsection 37(1) of the Act, the opponent should include the following:

1. the application number of the original application;
2. the date on which the original application was advertised;
3. the application numbers of all the divisional applications; and
4. the date(s) on which the divisional applications were filed.

The Registrar will generally not award costs in cases where only one divisional application was filed on or after the date of advertisement of the original application as it might assist in settlement negotiations and allow for subsequent withdrawal of an opposition against some goods or services.

Section XX of the Regulations does not provide for the award of costs for the corresponding original application.

II.3.c Late cancellation of hearing

In the case of a request for costs for the reason that a party who filed a request for hearing withdraws their request for a hearing less than two weeks prior to the scheduled hearing date, it would be sufficient for the party to identify the hearing date set and the date of the cancellation.

In the case where a party who requested a hearing withdraws their request for a hearing less than three weeks prior to the scheduled hearing date, the Registrar will generally not award costs if the other party also cancels its request less than two weeks prior to the scheduled hearing date.

In the case where a hearing concerning more than one proceeding is cancelled, costs will generally be awarded per each application, indication or registration.

II.3.d Unreasonable conduct

Costs may be used to deter or mitigate unreasonable conduct in a proceeding and to encourage parties to comply with the legislation, the TMOB's practice notices and the Registrar's orders and directions.

In the case of a request for costs for the reason that a party engaged in unreasonable conduct, the request should contain sufficient details of the alleged unreasonable conduct in question, including the dates on which it occurred, and the manner in which the conduct caused undue delay, complexity or expense to the party in the proceeding.

In determining whether there was undue delay, complexity or expense in the proceeding, the Registrar will have regard to the overall context, including the nature and purpose of the proceeding, the length and causes of the delay, the complexity of the facts and issues in the case, and the extent and causes of the expenses incurred by the party. These factors are not exhaustive, additional contextual factors can be considered in a particular case.

The following are examples of conduct that the Registrar may consider to be unreasonable causing undue delay, complexity or expense in a proceeding:

1. Failing to attend a hearing that a party has requested without informing the TMOB;
2. Failing to attend a cross-examination that a party has requested without informing the other party or cancelling a cross-examination on short notice without consent;
3. Failing to follow the directions of the decision maker or upsetting the orderly conduct of the hearing;
4. Engaging in litigation bullying in the form of abusive behaviours and tactics intended to defeat or make inordinately difficult the resolution of legitimate proceedings including "burying" the other party in needless or disproportionate paperwork;
5. Breaching a confidentiality order;
6. Lack of co-operation with the other party for scheduling of cross-examination;
7. A course of conduct necessitating unnecessary adjournments or delays;
8. Acting disrespectfully or maligning the character of another party.

The Registrar will generally not order costs for minor issues that arise during a proceeding. Even so, while a single act may not be unreasonable in and of itself, the Registrar may still award costs if a series of acts amount to a party's overall conduct being unreasonable causing undue delay, complexity or expense.

If the Registrar determines that a party has engaged in unreasonable conduct which causes undue delay, complexity or expense in a proceeding, the Registrar may award costs in accordance with the amount set out section XX of the Regulations. The Registrar will not vary the amount to reflect the severity of the conduct that took place over the course of a single proceeding. In the case where the parties are involved in multiple proceedings, costs will generally be awarded per application, indication or registration.

III. Response

The other party may file a response within 14 days after the day on which the Registrar gives notice of the costs request to the other party (section XX, XX or XX of the Regulations). The response must be filed in writing through the General Correspondence tab of the TMOB online E-services (section XX, XX or XX of the Regulations). The response should be in 12 point font and not exceed 1 single sided, standard letter size page in length but may be accompanied by relevant supporting documentation which is not included in the Registrar's files.

A response not filed through the General Correspondence tab of the TMOB online E-services including any paper response and any submissions made as part of the written representations, will not be considered by the Registrar.

IV. Decision on Costs

The Registrar will provide reasons for its decision on costs in the final disposition of the proceeding. In doing so, the Registrar may direct by which party and to which party any costs are to be paid [section XX, XX or XX of the Regulations] in accordance with the amounts for costs awards as set out in section XX of the Regulations. A party may have a costs award order against them even if the circumstances underlying the costs award were the result of conduct of a predecessor-in-title that were a party to the proceeding.

For information on appeals of the Registrar's final decisions including final decisions with respect to costs awards, please see the practice notice Appeals of the Registrar's Decisions: Service and Filing of Documents, Stays and Judgments.

V. Enforcement

A certified copy of an order for costs may be filed by a party in the Federal Court and, on being filed, the order becomes and may be enforced as an order of that Court (sections 11.13(10), 38.1(2) and 45(4.2) of the Act).

VI. Cost Awards in Proceedings Pending at Coming Into Force

The regime for costs awards begins on XXXX. Prior to this time, the Registrar has not awarded costs in proceedings. Consistent with the principle that parties must have knowledge of the law before acting, the Registrar may only award costs in proceedings pending as of XXXX as follows:

1. For a successful bad faith ground of opposition where the bad faith ground of opposition was included in a statement of opposition filed or amended on or after this date (section XX of the Regulations). With respect to oppositions where a bad faith ground of opposition is included in a statement of opposition filed or amended after this date, an applicant should consider the possibility of a costs award when deciding whether to continue with the application.
2. For divisional applications filed after the advertisement date, the request for a divisional is filed on or after this date [section XX of the Regulations].
3. For the withdrawal of hearing requests within two weeks of the scheduled hearing, for hearings scheduled to be held at least two weeks after this date [section XX, XX or XX of the Regulations].
4. For unreasonable conduct where the unreasonable conduct occurred on or after this date [section XX, XX or XX of the Regulations].

Schedule A (Sample form for a request for costs)

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