What is a Trademark?
A trademark indicates to the public that the goods or services associated with it originate with a particular trader, and serves to distinguish such goods or services from those of other traders. A trademark's ability to distinguish a particular trader is referred to as the mark's "distinctiveness."
A trademark may generally consist of a word (such as PEPSI®) or words (such as KENTUCKY FRIED CHICKEN®), or a design (such as the GOLDEN ARCHES®), or a combination of such elements. A trademark may also consist of the shape of a product or its container (known as a "distinguishing guise") if that shape is distinctive of the goods of a particular trader. An example of a distinguishing guise is the well-known ROLLS ROYCE car grill. Certification marks, such as the wool symbol, are used to distinguish goods or services which are of a defined standard.
Why Register a Trademark?
The Trademarks Act is federal legislation which establishes a registration system, administered by the Canadian Intellectual Property Office (CIPO).
Trademark rights can exist in a mark irrespective of whether the mark is registered under the Trademarks Act. However, registered trademarks are easier to enforce and have a number of important advantages. First, since there is a Register maintained by CIPO, competitors can get notice of prior rights. Second, protection for the registered mark is given throughout Canada, regardless of whether the trademark is known in the area where the defendant is located. In contrast, the owner of an unregistered trademark must also establish the distinctiveness of the trademark, that is, that the public exclusively associates the trademark with the goods or services of the owner, and even if the requisite degree of distinctiveness can be shown (and this is sometimes expensive and difficult to prove), the scope of protection is limited to the geographical area in which distinctiveness is proven. Third, a registration provides prima facie evidence of the ownership of a work, and the dates of first use shown on the registration page.
Lastly, a registration may have a greater persuasive impact on a potential infringer than an allegation of rights arising through use.
How is a Trademark Different from a Trade Name?
A trade name or business name, although registered with provincial authorities, does not of itself confer any right to the name that is enforceable against third parties. Rather, registration simply enables the public to ascertain who is using a particular trade name.
A trade name may incorporate a trademark, or itself be used as a trademark (to denote the origin of goods or services, as opposed to being the name of a business) and thus be registrable and enforceable as a trademark (e.g., McDonald's is both a trade name or trade style, and a trademark for restaurant services).
Choosing a Trademark
The choice of a trademark may have a significant impact on its enforceability. Trademarks which are coined, or otherwise have no dictionary meaning in relation to the goods or services for which they are used, have strong or "inherent" distinctiveness. These marks are most easily enforced and are entitled to the widest scope of protection.
Trademarks which describe a quality or characteristic of the relevant goods or services receive a narrower scope of protection. However, marks which are clearly descriptive of the goods or services receive no protection under the Trademarks Act, because they cannot technically function as a trademark to distinguish the goods or services from those of another particular trader.
In between these two extremes are marks that are suggestive, but not clearly descriptive, of the wares or services. Some marks may be a composite of elements with some of each of these features.
Clearing a Trademark
Once a potential trademark has been selected, the next step is to determine if it is available for use and/or registration, free from any possible adverse claims. This is done by conducting a search of the trademarks Register and, to better assess availability, investigating use of trademarks by parties who may not have registered their rights, and searching corporate and business names.
The purpose of conducting a search of the Register is not just to locate trademarks which are the same as the selected mark, but also to identify potentially confusing trademarks which could pose obstacles to the use and registration of the selected mark. Given the importance of such a search, it is essential that the search be conducted under the supervision of, and the results interpreted by, an experienced trademark lawyer or agent.
Not all proprietors seek to register their trademarks, and the risk of an objection by a prior user of a trade name or of an unregistered trademark is an important consideration to bear in mind when selecting a mark. Therefore, a review of available trade directories in the relevant industry, telephone directories, and other sources of business information (known collectively as a "common law search") is often also done. Common law searching can be somewhat difficult and time-consuming because there is no comprehensive database available which may be searched.
The level of clearance searching required will depend on the situation. In some cases, a potential registrant will be content with a simple search of the records of the CIPO.
In other situations, especially where there will be a large investment in the launching of the new trademark, greater certainty is desired and so a full and thorough common law search will also be conducted. However, since comprehensive common law searching is difficult, there can be no guarantee that a trademark can be used without some risk of an adverse claim. The magnitude of such risk is a function of the scope and complexity of the search.
A trade name (including a corporate name) should also undergo a clearance procedure, similar to that for a trademark, prior to its use, especially if it is to be used to any significant extent in public.
Registering a Trademark
A trademark may be registered in Canada based on any one or more of the following grounds:
(1) actual use or proposed use in Canada by the applicant, (2) making known in Canada by the applicant, or (3) registration and use of the trademark abroad by the applicant. Use by a licensee instead of the applicant itself may also qualify. The last two grounds enable foreign applicants to obtain rights before there has been actual use in Canada. Again, an experienced trademark lawyer or agent should be consulted to determine how best to proceed.
A trademark application is subject to review by an examiner at CIPO. The examiner may approve the application for advertisement as filed, or may raise various requirements or objections. For example, there may be an objection that the mark is clearly descriptive of the relevant wares or services, that the wares or services should be defined in greater detail or that the mark is confusing with a prior application or existing registration. Applicants are given an opportunity to respond to such objections and, if appropriate, to amend the application.
Once an application is approved, a formal notice of approval is issued, and thereafter the application is advertised in the Canadian Trademarks Journal. Once advertised, the application may be opposed by one or more parties on a variety of grounds, including prior use of a confusingly similar trademark or trade name. Trademark oppositions, which are often lengthy and complex in nature, are decided by the Opposition Board, usually on the basis of evidence filed in the form of affidavits or declarations, and in some cases cross-examinations thereon, as well as written and/or oral arguments by the parties.
If no opposition is filed, or an opposition is unsuccessful or withdrawn, the application proceeds to allowance. Once allowed, in order to obtain a certificate of registration it is necessary to pay the registration fee and, if the application was filed based on proposed use, file a document entitled a Declaration of Use, stating that the mark applied for is now in use in Canada. A decision of an examiner or the Opposition Board regarding any of the above matters may be appealed to the Federal Court.
Generally, the minimum period required to obtain a trademark registration is 10 to 12 months, however this period can be substantially longer, especially where an opposition is filed. Once registered, the term of registration is 15 years from the date of issuance and is renewable for successive terms of 15 years each.
After the third anniversary of registration, failure to use a registered mark in Canada may result in the registration being vulnerable to summary expungement or amendment.
Using a Trademark Properly
Care should be taken to ensure that generic use of a trademark is strictly avoided. If a trademark becomes generic, it loses its ability to distinguish a particular trader as the source of the goods or services associated with the trademark. Such loss of distinctiveness may make a registered mark vulnerable to expungement. Therefore, trademarks should never be used as the name or function of a product, but it is permissible for the trademark to modify the name of the product, e.g. ASPIRIN® brand acetylsalicylic acid.
Even though under Canadian law it is not necessary to do so, trademarks should be denoted with the ® or TM symbol wherever they are used. Furthermore, it is advisable to identify the owner of the mark, particularly if it is used by a licensee.
Licensing a Trademark
The Canadian Trademarks Act no longer requires recordal of licensees as registered users. The Act simply requires that where a trademark owner has licensed others to use its trademark, the trademark owner must maintain direct or indirect control over the character or quality of the goods or services associated with the mark.
Also, special considerations arise regarding the proper notice to be employed in relation to the licensed goods or services when a trademark is used by a licensee.
Enforcing Trademark Rights
Actions for infringement of a registered trademark are generally brought in the Federal Court, and the Trademarks Act provides remedies including damages or profits, delivery up of all infringing goods and injunctive relief against further unauthorized use of the infringing mark.
Infringing goods may also be detained by Canada Customs at their point of entry into the country.
Where the rights to an unregistered trademark, trade name, or business name are violated, the proprietor of the mark or name is entitled to bring an action for the tort of passing-off against the party. Such tort actions must be brought in provincial superior court.
In an action for passing-off, the plaintiff must prove not only that the defendant's mark is likely to cause confusion between their respective businesses, but must also prove that the public exclusively associates the mark with the goods or services of the plaintiff.
Some of Canada's most important trademark litigation has reached successful conclusion in the hands of Bereskin & Parr LLP lawyers. Our extensive courtroom experience is not confined to major cases; simple disputes receive equal attention and concern. Before commencing any litigation, however, we carefully review all options available to the client, including negotiation and alternative dispute resolution. When litigation is necessary, we carefully plan the strategy with the client, work in a cost-effective manner, and always treat the client as an essential member of the litigation team.