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Basic Trademark Info: key info for people new to trademarks

November 20, 2014
goprimeconsult

 Contents

What is a trademark?

Why use a trademark?

Why register a trademark?

When to register a trademark in Canada – and when not to bother.

What is a trademark?

A trademark is a mark that distinguishes goods or services in the marketplace.

In Canada, a trademark is either a ‘wordmark’ composed of a word or words, or a ‘design mark’ which is composed of a design with or without words, or in a few rare cases, a ‘distinguishing guise’. More exotic forms of trademarks such as smells and colours (by themselves) have not yet been recognized as trademarks in Canada.

A trademark in Canada may be a name, logo, slogan, or design.

Why use a trademark? Many of the principles of trademark law are, implicitly (but rarely expressly) correlated to the good branding and marketing principles. In particular, it is usually a good idea to ‘brand’ goods (or services) with a distinctive ‘mark’ which distinguishes the source of the goods/services. Consumers frequently choose which product/service to buy on the basis of reputation – and they correlate reputation with a name, logo, slogan, design or other mark.

What is a trademark application? In Canada, a trademark application is really a ‘request’ more than ‘a thing’, but the phrase “trademark application” has two common usages:

a) It is the actual document that you file with the Government of Canada to start the process towards registering a Canadian trademark, and

b) It refers to the corresponding application in progress.

What is a trademark registration? In Canada, a trademark can be registered or unregistered. A registered trademark in Canada is one that has been formally entered onto the official register of trademarks. Trademark registration in Canada is a matter of federal jurisdiction, governed by the Trade-Marks Act.

A trademark that has not yet been registered is often marked with (TM). Only a registered trademark can be marked with (R). More information can be found on this page on proper marking of trademarks in Canada.

A registered trademark really represents a ”bundle of property rights” that can be bought, sold, licensed, and pledged as collateral for loans.

A trademark registration in Canada comes at the end of a successful application process, when the trademark is entered by the Registrar on the Register of Trademarks. Thus an applicant files an application to register a Canadian trademark and some time later (usually 12-18 months) if the the application has been successful, the trademark is ‘registered’.

View the Canadian Trademark Process Flowchart in PDF here.

Why register a trademark? No one is obliged to register a trademark in Canada. Registration of trademark is a key step in protecting and building value in your brand. The registration improves the rights of the owner of the trademark; creates an identifiable asset; provides some protection against claims of infringement or misuse by others; and, can be useful when dealing with other some other regulatory requirements (for instance, French language requirements for labelling in Quebec).

In Canada, the owner of an unregistered trademark has common law trademark rights (but these rights are quite limited). The owner of a registered trademark has much greater rights to the trademark (and to prevent others from using the trademark or confusingly similar trademarks) than the owner of an unregistered trademark.

Moreover, registration of a trademark provides some degree of protection for use of that trademark against claims of infringement from others. Accordingly, it is frequently highly advantageous to register a trademark. The more that you invest in marketing, and branding your products/services as different from those of your competitors, the more important it is to register your trademark(s).

 

What is the difference between a trademark and a trade name? In Canada, trademarks and trade names are quite different.

A trade name (or ‘business name’ or ‘corporate name’ depending on the context) is used to distinguish a business; a trademark is used to distinguish goods and services.

Registration of trade names is mandatory to meet the legal requirements for proper registration of businesses.

You are legally required to register a trade name in order to carry on business under a name other than your own in each province where you carry on business. For instance, if Jane Smith is the sole proprietor of a business known as “Joe’s Plumbing” in Toronto then Jane must register the trade name (“business name”) “Joe’s Plumbing” with the government of Ontario in order to carry on business under the “Joe’s Plumbing” name. Once she has completed this business name registration, Jane can, for instance, provide evidence of the business name registration to her bank so that she can accept cheques made out to “Joe’s Plumbing”. She can also contract with suppliers in the name of “Joe’s Plumbing” rather than having to use her name, Jane Smith.

Trademarks serve a very different purpose from trade names: they are all about distinctiveness in the marketplace. Trademarks help consumers identify the origin of goods and services, and trademarks help businesses preserve their distinctiveness in the marketplace.

Jane’s business name registration provides no protection against other people using either the identical name ‘Joe’s Plumbing’ if they don’t compete with her (even, for instance, if they are in the same province), or if they are using a confusingly similar name but are not in any way ‘passing themselves off’ as Jane. If Jane does not register her trademark, she may have some limited ‘common law trademark rights’, but if Jane really wants to try to prevent people from using Joe’s Plumbing or Joe’s Carpentry anywhere in Canada, she needs to try to register Joe’s Plumbing as a Canadian trademark.

When to register a trademark in Canada – and when not to bother.

As there is no legal requirement to register a trademark in Canada, every small business owner in Canada needs to ask themselves “should I bother to register a trademark, and if so, should I do it now or wait?”

Trademark registration costs time and money, so registration of a trademark in Canada is worthwhile if the value of the protection afforded by the registration is a reasonable return on the investment. Registration of a trademark can help create value in 2 different ways:

a) It provides a substantial level of comfort that the trademark you have chosen does not infringe the trademark rights of a third party, and thus that you will not be forced to change your trademark; and,

b) It provides substantial rights that you can enforce against third parties who might infringe on your trademark – whether direct competitors or not.

As a result, it is likely to be very worthwhile to register a trademark in Canada if:

– You intend to invest a substantial amount of money in packaging, signage, and the like;

– You intend to invest heavily in marketing the product or service;

– You intend to expand beyond one location;

– It would hurt your business if someone else adopted a similar or confusing name anywhere in Canada, whether they are a competitor or not;

– You intend to franchise or have other ‘partners’ also using the same name (for instance, if you have multiple ‘chapters’ of a charity); or,

– If it would cost a substantial amount in money or lost reputation to be forced to change your name later.

Similarly, it is not likely to be worthwhile registering a trademark if you carry on a small, personal business that is confined to one geographic area and that is closely associated with you (ie. Most sole proprietorships, and many small incorporated businesses). Generally, it is worthwhile to trademark a name on a product ‘sooner’ (ie. When the business is smaller) than for services. However, this rule of thumb is less applicable to internet-based services.

What is the deadline for filing a trademark? There is no deadline for filing a trademark. However, as your rights will be determined based on the date of your trademark application, it is important to file as soon as possible. Well managed companies usually file trademark applications based on ‘proposed use’ before they actually commence using the trademark in commerce. We recommend that you do the same if possible.

Who is a trademark agent? A registered trademark agent in Canada is an individual licensed by the Canadian Intellectual Property Office to represent trademark applicants. Only trademark agents may represent third parties before CIPO on trademark matters. While many trademark agents are also lawyers (attorneys), the two professions are quite distinct – most lawyers have little experience with trademark matters. Trademark lawyers represent trademark owners in court, in disputes, and in trademark transactions (licenses, buying/selling). There are roughly 2,000 trademark agents in Canada. Our firm is in among the top 100 firms in trademark filings.

Do you need a trademark agent? No, you do not “need” to hire a trademark agent to represent you before CIPO – you can act for yourself. But, bear in mind that you do not “need” to hire a dentist to help with your toothache either. Trademarks are complex, and the costs of making a mistake can be serious. We subscribe to the rule that ‘if it really matters, hire a professional to help, but on a reasonable (not unlimited) budget’. Applicants for Canadian trademarks who reside outside Canada must retain a ‘representative for service’ in Canada – usually this person is a registered Canadian trademark agent.