TRADE-MARK PROTECTION

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1 Lawyers, Patent & Trade-mark Agents 150 York Street, Suite 800 Toronto ON M5H 3S5 Tel: Fax: TRADE-MARK PROTECTION David Kornhauser Direct Phone: Direct Fax: The success of a franchised business is to a large degree dependant on the public s recognition of and identification with the system s trade-marks and commercial symbols. In most successful franchises, a strong association exists in the minds of consumers between a system s products or services and its trade-marks and logos. Trade-marks not only identify a business; they also represent its reputation and the quality of the products or services it offers. While the monetary worth of these commercial symbols can be difficult to ascertain, their value to a franchise system cannot be overstated. Thus, the protection of trade-marks and other intellectual property must be a priority for every franchisor. WHAT IS A TRADE-MARK? In Canada, trade-marks and their use are governed by the federal Trade-marks Act (the Act ). A trade-mark is defined in section 2 of the Act to include 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. A trade-mark can be a word, a design or a combination of both that identifies the goods and services of a person or an organization and which distinguishes those goods or services from those of others in the marketplace. RESGISTRATION OF TRADE-MARKS Trade-marks need not be registered in Canada to establish ownership or to enforce the rights of ownership. However, trade-marks can be registered under the Act in the Register of Trade-marks. The Register is a formal list of all trade-marks in Canada for which an application has been made to and accepted by the Office of the Registrar of Trade-marks. Registration gives the registered owner important rights. If a dispute arises over who owns a trade-mark, registration acts as prima facie evidence of ownership. That is, the registered holder of a trade-mark does not have to prove beyond the fact of registration that it is the owner of the mark. It is up to the challenger to disprove the registered holder s ownership. Ownership of an unregistered trade-mark can be proved through its use over time but a failure to register can expose the person asserting ownership to lengthy and costly litigation over who has the right to use it.

2 - 2 - A trade name, the name under which a business operates, can also be registered under the Act but only if it is used to identify the products or services offered by the business. In other words, a trade name can be registered if it qualifies as a trade-mark. Registration of a trade-mark gives the registered holder the exclusive right to us the trademark in Canada for a period of 15 years and is renewable for successive 15 year periods thereafter. However, use of a trade-mark is essential. A trade-mark that is not in use can be expunged from the Register in proceedings commenced by the Registrar, either on his or her own initiative or at the request of another person. Expungement proceedings cannot be commenced until at least three years after registration. Notice of any such proceedings must be given to the registered holder, who is then required to provide evidence of use. A hearing will then be held to determine whether the registration should be maintained, amended or expunged. Registration of a trade-mark is only proof of ownership in Canada. For businesses operating in other countries, registration under the laws of those jurisdictions is highly recommended. THE REGISTRATION PROCESS The registration process is commenced by the filing of an application with the Office of the Registrar of Trade-marks and the payment of the required fees. The amount of the fees will depend on the circumstances. In certain cases, a filing fee and a registration fee will have to be paid. Additional fees might also apply. Applications can be made for trade-marks that are already in use and for those based on proposed use. An application in prescribed form must be filed for each trade-mark. If the trade-mark is a design, or anything other than a word or combination of words, a formal drawing must be submitted with the application. Once filed, the Office of the Registrar will review the application to ensure that it is complete, assign a filing date and notify the applicant of receipt of the completed application. Once the application is received, the Office of the Registrar will search the register to determine whether the trade-mark conflicts with any others that have already been filed or registered. An examiner then reviews the search results to determine whether the application should be approved for advertisement or rejected. If approved, the application will be advertised in the Trade-marks Journal, which is published weekly. Any person who opposes registration must formally do so within two months of the publication date. Where there is no opposition, or an opposition is successfully defeated, the Office of the Registrar will allow the application. No other challenges will be considered once the application is allowed. If the application is for a proposed use of a trade-mark, a declaration must be filed stating that use has commenced. The Office of the Registrar will then issue a certificate of registration and enter the trade-mark on the Register. Once a trade-mark is registered, it is up to the holder to ensure that it is not used without permission. If unauthorized use is discovered, the registered owner should take legal action to have it stopped. As stated, trade-marks and other intellectual property are

3 - 3 - valuable assets. Every business should be proactive in protecting its identity in the marketplace. LIMITATIONS ON REGISTRATION In order for a trade-mark to be registered, it must satisfy all of the requirements set out in the Act and its associated regulations. The legislation, which determines what can and cannot be registered, prohibits the following enumerated types of marks from being registered: 1. Names and surnames: A name or surname in and of itself cannot be registered as a trade-mark, with certain exceptions. For example, if products or services provided by a business have become distinctive under a name and identified with it in the marketplace, the name can be registered as a trade-mark. That is, the name itself must be associated with the goods or services in the public s eye. The many examples of trademarked names in the fast food and apparel industries prove the exception to the rule. 2. Clearly descriptive marks: Words that are simply descriptive of an aspect or quality of the products or services offered cannot be registered as trade-marks. Adjectives such as best or finest fall into this category. Again, an exception to the rule exists where the descriptive word or words have become clearly associated with those goods or services in the marketplace. 3. Deceptively misdescriptive marks: Words and descriptors that are clearly misleading or deceptive in relation to products and services cannot be registered as trade-marks. 4. Place of origin: Words that commonly associate products or services with a particular geographical location or place of origin cannot be registered as trade-marks. For example, Quebec Maple Syrup would not pass the test. To allow such a mark to be registered would effectively give the holder a monopoly over the geographical descriptor, which would be unfair to others. Similarly, geographical identifiers that would mislead the public into believing that the products or services come from a particular place of origin when they do not cannot be registered as trade-marks. 5. Translations: Words that are simply the name of the product or service expressed in another language cannot be registered. 6. Confusing marks: Marks that are confusingly similar to other registered trade-marks cannot be registered. A confusing mark is one that would lead to the inference that the wares or services in question are those of another registered trade-mark owner.

4 Prohibited marks: The Act specifically prohibits the registration of any mark consisting of, or so nearly resembling as to be likely to be mistaken for certain listed types of marks, including: a) the Royal Arms, Crest or Standard; b) the arms or crest of any member of the Royal Family; c) the standard, arms or crest of His Excellency the Governor General; d) any word or symbol likely to lead to the belief that the wares or services in association with which it is used have received, or are produced, sold or performed under, royal, vice-regal or governmental patronage, approval or authority; e) the arms, crest or flag adopted and used at any time by Canada or by any province or municipal corporation in Canada; f) emblems of the Red Cross, Red Crescent or the United Nations; g) flags, crests, armorial bearings and emblems of other countries; h) any badge, crest or emblem of the armed forces or of any university; i) the name Royal Canadian Mounted Police or R.C.M.P. ; j) any scandalous, obscene or immoral word or device; k) any matter that may falsely suggest a connection with any living individual; and l) the portrait or signature of any individual who has died in the last 30 years. The Office of the Registrar will reject any trade-mark that contravenes the listed prohibitions. TRADE-MARK AGENTS Securing the registration of a trade-mark can be a complicated process. The law in this area and the practices of the Office of the Registrar are highly developed. Any business thinking of registering its trade-marks should consider retaining a registered trade-mark agent. These individuals are lawyers who have either passed a qualifying examination or practiced in the area for at least two years. The Office of the Registrar maintains a list of

5 - 5 - qualified agents. Only registered agents are authorized to represent applicants in trademark proceedings before that body. While there is no requirement that an applicant use the services of a trade-mark agent, it is recommended. An agent should be engaged early on it the process. As stated, the Office of the Registrar conducts a search of the register to determine whether the mark conflicts with any filed or registered trade-mark. If it does conflict, the application will be rejected, which can result in significant delay and wasted money. An agent can search the register before an application is submitted to determine as a preliminary matter whether your mark is confusing with another or is otherwise prohibited. In addition, a qualified and experienced agent will ensure that your application is properly prepared and filed. A registered agent can also represent your interests in the event a third party opposes your application. If you intend to register in another country, a trade-mark agent is indispensible.