Is it Time to Dispense with Trademark Classification Systems?

Toni Polson Ashton and Andrew Ngo
Published July 10th, 2017

Many countries in the world are conditioned to apply class designations for goods and services in trademark applications. Canada is scheduled to follow suit when it accedes to the Singapore Treaty and the Madrid Protocol. Is this a good thing or not? Becoming part of an international filing procedure fits into the globalization process as Canada will become part of a larger network which may encourage regional or national Canadian businesses to expand beyond current borders. However, in joining a larger whole, one may be obligated to accept conditions unfavourable – one such condition arguably being the need for Canada to use the Nice Classification for goods and services.

Canada’s Lack of Classification

To give some historical context on the issue, Canada has only recently passed laws to adopt the Singapore Treaty and the Madrid Protocol. These laws are not yet in force. With regard to classification, the Singapore Treaty effectively mandates that Canadian registrations group goods and services according to the Nice Classification.  Under the Madrid Protocol, an applicant must provide the corresponding class or classes according to the Nice Agreement.  If the applicant does not, the International Bureau will do the classification. The coming ratifications aside, Canada has otherwise happily operated without classification since 1868, when it proclaimed its first trademark statue – the Trade Mark and Design Act.  Even today, Canada’s trademark policy only requires that trademark owners describe their goods and services in “ordinary commercial terms”.  The specificity and ordinariness of such terms are each judged with reference to the meaning conveyed by these terms alone (i.e. in the absence of any external categorization or classification system). As a result, for example, an applicant cannot simply identify its goods as “headrests”; rather, the applicant would also have to indicate if they are, for example, “headrests for vehicle seats”, “headrests for surgical operating tables”, and so forth.

History of The Nice Agreement

Canada’s current position is something of an anomaly with regard to administrative developments elsewhere. “By the middle of the nineteenth century, a number of national trademark offices had concluded that, in order to avoid congestion in their trademark registries and to make it easier to locate and review marks, it was essential to classify the goods to which trademarks could be applied in some fashion”.  (see INTA Issue Brief, June 1995).

However, it is worth keeping in mind the historical context in which this conformity was sought. In the early nineteenth century, classification “systems” varied between different countries. Some countries even sub-divided classes.  The increasing proliferation of trademark registrations being sought in multiple nations – largely assisted by the Paris Convention – threw into sharp relief the problems of this classification system tapestry. To address these problems, the Nice Agreement of 1957 established a 34-class system (today a 45-class system) that was ultimately able to achieve widespread acceptance. It is to this system that Canada will soon align itself.

Disadvantages of the Nice Classification

While Canada has no choice in the matter given its decision to join the Madrid Protocol, one wonders whether the world at large would not be better served by rethinking the concept of classification. This would be a big change, but as Nathaniel Branden has said, “the first step towards change is awareness. The second step is acceptance.”  In terms of awareness, Trademark Officers must recognize that there are a number of inherent issues with classification in general.  For example, the separation of goods and services into each of the classes in the current system gives rise to a number of surprises. For example, beer is in Class 32 while other alcoholic beverages are in Class 33. Soap could fall into either Class 3 or 5 depending upon whether it is medicated or not. Knives could be in classes 7, 8, 10 or 16 depending upon the intended use.  To complicate matters, use of the Nice Classification also seems to vary between signatories. Some countries accept broad specifications such as class headings, while others require a greater degree of specificity. Higher filing fees are sometimes associated with applications filed covering multiple classes.  Ironing out these differences will take time and political will;  however, it is worth questioning whether uniformity for uniformity’s sake is still worth pursuing.

Proposal

Since 1957, information technology has advanced significantly. Whatever menaces the Nice Classification was designed to address in its time, can be dealt with today in ways that were unimaginable 60 years ago.  Today, we have computers that can be programed to efficiently search, sort and report on any subject matter.  A few enterprising startups have even gone as far as to use computer programs to classify contract clauses and to provide Canadian tax law opinions based on existing case law.  Arguably, the resources spent on developing and working with the Nice Classification – by applicants and Offices – would be better spent on developing more sophisticated software to compare goods and services, without recourse to the monolithic Nice Classification.

As Winston Churchill stated, “to improve is to change”. Maybe it is time to let the Nice Classification go the way of the old library card catalogue.

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