We are often asked by our clients why it is important to register a trademark. After all, unregistered rights can be enforced by making a claim for passing off.
A decision very recently released by the Federal Court, Black & Decker Corporation v. Piranha Abrasives Inc., 2015 FC 185, highlights two reasons why registration can go a long way to protecting your brand.
The decision revolved around trademarks owned by two companies: the word PIRANHA and two PIRANHA logos, all registered as trademarks by Black & Decker at least 20 years ago in association with "saw blades for power saws and circular saw blades"; and a PIRANHA logo used since 2010 by Piranha Abrasives Inc. in association with "diamond abrasive cutting, polishing and grinding tools" and associated machines.
When Black & Decker became aware of Piranha Abrasives' website and activities, including use of the trade name Piranha Abrasives and a trademark application to register its logo, it brought an application for trademark infringement, passing off, and depreciation of goodwill.
A key difficulty for Black & Decker was that use of their registered marks appears to have been sporadic and declining. For example, sales of products bearing their marks declined from over $600,000 in 2004 to an estimated $9,273 in 2014.
In this light, the court concluded that Black & Decker did not have sufficient goodwill in the marks to bring a claim in passing off (para. 103). Nor was there sufficient reputation to support a claim for depreciation of goodwill (para. 109).
Without a registration, this would have been the end of Black & Decker's claim, and Piranha Abrasives would have been free to continue using its mark.
However, because Black & Decker had obtained trademark registrations for its brands, the court reviewed whether a likelihood of confusion existed between Black & Decker's registrations and Piranha Abrasives' trademark and trade name. It concluded that a likelihood of confusion did exist with Piranha Abrasives' circular saw blades, and that Piranha Abrasives had therefore infringed Black & Decker's registered trademarks. Accordingly, the court ordered an injunction against Piranha Abrasives, and awarded damages and costs to Black & Decker.
This decision is a prime illustration of the importance of registering one's trademarks in Canada, and possibly beyond. Indeed, obtaining a trademark registration may be one of the most cost effective ways of protecting your business.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
