Canada: What Is The Difference Between A Common Law Trademark And A Registered Trademark Or Why It Is Important To Register Your Trademark

While common law and registered trademarks have a significant amount of similarity there are also some significant differences.

Common Law Trademarks

Common law trademarks are fairly broad in scope and can extend to business names, trademarks or the trade dress or "get-up" of specific goods, among other things. Rights are typically acquired through actual use of the common law trademark in Canada in association with goods or services. The rights are territorial and are primarily limited to the specific geographical area in which they are used. The owner can identify its common law trademark by using the designation TM on the right shoulder of the mark.

As the common law trademark becomes known and goodwill is associated with it, the owner of the mark will be able to assert claims against others who use confusing trademarks in the specific region or area where the owner of the common law trademark has built up goodwill. This type of claim is referred to as "passing-off".

Canadian courts require that three elements must be established in order for a plaintiff to succeed in an action for passing-off.

First, the plaintiff must establish the existence of goodwill or reputation attached to the goods or services in the mind of the purchasing public by association with the identifying "get-up" or name under which the particular goods or services are offered to the public. In essence, the "get-up" is recognized by the public as distinctive of the plaintiff's goods or services. The "get- up" may include a common law trademark or a business name or individual features of labeling or packaging in which goods are offered to the public.

Second, the plaintiff must demonstrate a misrepresentation by the defendant to the public (whether or not intentional), leading or likely to lead the public to believe that the goods or services offered by the defendant are the goods and services of the plaintiff. In making the assessment of whether a

misrepresentation has been made, the court looks at all of the respective "get-up" used by the parties. For example, if the plaintiff always uses the color red in the presentation of its mark but the defendant uses green in the presentation of its mark, this can be a potentially distinguishing feature.

Finally, the plaintiff must show that it has suffered or will likely suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation.

Registered Trademarks

The registration of a trademark in association with goods and services, unless shown to be invalid, gives the owner the exclusive right to the use throughout Canada of such mark in respect to those goods and services, as well as a right to assert a claim for infringement against those who use a confusing trademark. While the statute speaks in terms of an exclusive right, the right relates to the ability to stop parties from using the trademark or a confusing trademark and is not in the nature of a monopoly.A trademark owner may use the notification ® or similar legends to identify that it is the owner of a registered trademark.

One of the significant advantages of obtaining a trademark registration is that the trademark owner can bring an action for infringement. This differs from a common law action for passing-off in that:

a) Infringement under the Trademarks Act is concerned with only one method of passing-off and restricted to the use of a registered trademark and another confusing trademark;

b) In an action for infringement, once the plaintiff has shown use of the registered trademark and the confusing trademark, the defendant cannot avoid infringement by showing that added matter distinguishes its goods or services from those of the trademark owner – only the respective trademarks are considered;

c) In an action for infringement the plaintiff is entitled to rely on its registration as evidence of ownership and its rights throughout Canada, while a plaintiff in an action for passing-off must establish goodwill in the trading indicia it seeks to protect which may be limited to a specific territory; and

d) In an action for infringement a court must consider the trademark registration, according to its terms, to determine the scope of rights available to the plaintiff. In an action for passing-off a court will only consider the specific way in which the mark in issue has actually been used by the plaintiff.

Comment

As we have seen, there are significant advantages to obtaining a trademark registration for the purposes of asserting claims against third parties using confusing trademarks. However, this is not the full extent of the advantages because once a trademark registration has been obtained the registration will be searchable on an online database. In addition, in any transaction involving a trademark registration, such as a sale or a mortgage, the nature of the rights available will be clear to all. The same cannot be said with respect to common law trademarks since they depend on use.

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