CHAPTER 1

GENERAL TRADE-MARK PRACTICE IN CANADA

In Canada, the law related to trade-marks and unfair competition, including passing off, is covered by both federal statute and provincial common law. The current federal statute, the Trade-marks Act,1 which has codified much of the common law with respect to trade-marks, creates a regulatory system that encompasses registered as well as unregistered trade-marks.2 A foundational purpose of the Act and the common law is to create a regulatory system that ensures that commercial considerations and the rights acquired by way of trade-mark use and registration are protected, while contemporaneously safeguarding the public from any confusion, misrepresentations, or deceit with respect to the origin and quality of goods and services.

Trade-mark protection and enforcement is practised by way of both regulatory and non-regulatory proceedings. Regulatory proceedings consist of quasi-administrative/ quasi-judicial trade-mark opposition and cancellation proceedings, which generally serve to prevent the registration of a trade-mark and expunge the registrations of unused trade-marks, respectively. Non-regulatory proceedings are court proceedings that, in general, deal with trade-mark infringement, depreciation of goodwill, and the expungement of trade-mark registrations and with common law rights, including those associated with unfair competition and passing off.

The Supreme Court of Canada in Mattel Inc. v. 3894207 Canada Inc.3 distilled the purpose and basis of trade-marks and trade-mark law to the following:

Trade-marks are something of an anomaly in intellectual property law. Unlike the patent owner or the copyright owner, the owner of a trade-mark is not required to provide the public with some novel benefit in exchange for the monopoly. Here, the trade-mark [BARBIE] is not even an invented word like "Kodak" or "Kleenex." The appellant has merely appropriated a common child's diminutive for Barbara. By contrast, a patentee must invent something new and useful. To obtain copyright, a person must add some expressive work to the human repertoire. In each case, the public through Parliament has decided it is worth encouraging such inventions and fostering new expression in exchange for a statutory monopoly (i.e. preventing anyone else from practising the invention or exploiting the copyrighted expression without permission). The trade-mark owner, by contrast, may simply have used a common name as its "mark" to differentiate its wares from those of its competitors. Its claim to monopoly rests not on conferring a benefit on the public in the sense of patents or copyrights but on serving an important public interest in assuring consumers that they are buying from the source from whom they think they are buying and receiving the quality which they associate with that particular trade-mark. Trade-marks thus operate as a kind of shortcut to get consumers to where they want to go, and in that way perform a key function in a market economy. Trade-mark law rests on principles of fair dealing. It is sometimes said to hold the balance between free competition and fair competition.

Fairness, of course, requires consideration of the interest of the public and other merchants and the benefits of open competition as well as the interest of the trade-mark owner in protecting its investment in the mark. Care must be taken not to create a zone of exclusivity and protection that overshoots the purpose of trade-mark law.

A. THE TRADE-MARKS ACT: OVERVIEW

The Act was enacted in 1954 and arose from the dissatisfaction with its preceding legislation — namely, the Unfair Competition Act of 1932 and Canada's first "Dominion Act" dealing with trade-marks, the Trade-mark and Design Act of 1868. The Trade-mark and Design Act as well as the Unfair Competition Act were considered too narrow in scope, difficult to interpret, and contradictory.

  1. What Is a Trade-mark?

    Under section 2 of the Act, a trade-mark is defined as follows:

    "trade-mark" means

    1. a mark that is used by a person for the purpose of distinguishing or so as to distinguish wares or services manufactured, sold, leased, hired or performed by him from those manufactured, sold, leased, hired or performed by others,
    2. a certification mark,
    3. a distinguishing guise, or
    4. a proposed trade mark.

    While the term is not defined in the Act, a "mark" must be something that can be represented visually and, in association with wares at least, use of a verbal description is not use of a trade-mark within the meaning of the Act.4 As a result, sounds, scents, and holograms, for example, will not currently meet the definition of a "trade-mark" in Canada.

  2. Types of Trade-marks

    In Canada, the Act enumerates four definitions of a trade-mark. These definitions permit the registration of the following trade-mark types.

    1. Word Marks

      A word mark is represented in block letter format and generally affords the owner of a block letter trade-mark registration the broadest protection. In particular, a block letter word mark is considered to encompass acceptable use of the trade-mark whether or not the mark is used in a particular font, colour, or design. By contrast, if registration is sought and/or obtained for a particular design or font and the mark is not used in Canada in such manner, the registration is subject to cancellation on the basis of non-use.5 As an extension to simple word marks, slogans may also be registered as trade-marks.6
    2. Design Trade-marks (Logos)

      A design, alone or in conjunction with words, may be registered as a trade-mark. Notably, a composite mark (a trade-mark comprising both design and word elements), when sounded, is not registrable pursuant to section 12(1)(b) of the Act if it contains word elements that are:

      1. clearly descriptive or deceptively misdescriptive in the English or French language of the character or quality of the wares or services in association with which it is used or proposed to be used or of the conditions of or the persons employed in their production or of their place of origin; and also
      2. not the dominant feature of the mark.

    3. Special Trade-marks
      1. Distinguishing Guises

        In Canada, an owner may also secure rights in trade-marks referred to as "distinguishing guises." A distinguishing guise is a trade-mark used to identify the unique shape of wares or its package/mode of wrapping. It is necessary to provide evidence of acquired distinctiveness of these types of marks as of the date that an application for registration for the distinguishing guise was filed. As a result, an application to register a distinguishing guise can only be based on use in Canada.
      2. Certification Marks

        A trade-mark may also be a certification mark, which is used to identify wares and/ or services of a defined standard. It is owned by one entity but licensed to others to identify wares and/or services that meet the defined requirements. The purpose of such standards is to distinguish and indicate a consistency with respect to:

        • the character or quality of the wares or services,
        • the working conditions under which the wares have been manufactured/ produced or the services performed,
        • the class of persons by whom the wares have been produced or the services performed, or
        • the origin or the area within which the wares have been manufactured/ produced or the services performed.

      3. Colours, Sounds, Smells, and Holographic Images

        While it is possible to obtain a trade-mark registration in Canada for a colour, such registration is usually considered weak, difficult to protect, and may require the filing of affidavit evidence of acquired or secondary meaning.

        The Canadian Trade-marks Office takes the position that sound, smell, and holographic images represented as trade-marks are not eligible for registration. The foregoing is based on the position that a trade-mark must be represented visually in order to be registrable. Although some applicants have attempted to assert rights primarily in the category of "sound" marks, most have as yet been unsuccessful. It is likely that the Courts may need to determine whether such marks are eligible for registration under the Act as well as the nature of any evidence or other guidelines or requirements for seeking protection of the same.

    4. Does a Trade-mark Need to Be Registered?

      In Canada, trade-mark rights may be acquired for both registered and unregistered trade-marks. In particular, a trade-mark does not need to be registered to benefit from the protection and rights afforded under the Act and the common law. Notwithstanding the foregoing, a trade-mark registration provides several additional benefits over and above those attached to unregistered trade-marks, including providing:

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Footnotes

1 Trade-marks Act, R.S.C. 1985, c. T-13 ["the Act"].

2 The most salient distinction between registered and unregistered trade-marks is that more extensive rights are afforded to an owner of a registered trade-mark.

3 Mattel, Inc. v. 3894207 Canada Inc., 2006 SCC 22 at paras. 21-22.

4 Playboy Enterprises, Inc. v. Germain (1978), 43 C.P.R. (2d) 271 (F.C.A.).

5 For more information related to cancellation and expungement proceedings, please see Chapter 6.

6 Although protectable, such marks are often highly suggestive and may be more difficult to protect than a traditional trade-mark.

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