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Why Should You Monitor and Police Your Trademark in Canada?

Create Time 2018-10-31 04:10    Views:1267

Trademarks, like logos and brand names, in many respects are the face of a business. Trademarks are often integral to the value and growth of a business as they allow customers to distinguish the products or services of a brand owner from those of competitors. In fact, well-known trademarks such as Google, Microsoft and Coca-Cola have billion-dollar valuations. If it's not managed properly, however, the value in a trademark can depreciate rapidly. In Canada, creating a distinctive trademark or simply registering a trademark is not enough. To maintain and strengthen your Canadian trademark rights, active steps must be taken to protect your trademark. The inability of a brand owner to monitor and police its trademark could cause could lead to unchecked infringement or counterfeit which can cause: (1) harm to brand value and (2) loss of revenue.

1. Trademark infringment causes harm to brand value

In some jurisdictions, trademark rights can be acquired through common law or statute. Under common law, trademarks are acquired through use of the mark. Brand owners acquire trade-mark rights through registration with the Canadian Intellectual Property Office (CIPO) under the Trade-marks Act. Registration of a trademark provides owners with the exclusive right to use their trademark across Canada with respect to its registered goods or services for a period of 15 years (with an option to renew indefinitely) and is direct evidence of ownership to the trademark. In effect, registration provides trademark owners with the right to restrain others from using a confusing mark anywhere in Canada. Importantly, however, registration is only one step toward securing your trademark rights. Another vital step is monitoring your trademark against potential infringement to ensure your trademark remains distinctive. "Distinctiveness" is a requirement of a valid trademark and refers to the ability of a mark to distinguish its goods and services from those of others in the marketplace.


The distinctiveness of a trademark can diminish if others use the same or similar trademarks in association with similar goods or services. Therefore, as distinctiveness is a requirement of a trademark, if trademark owners don't police their marks, they risk losing them. 


Notably, a trademark that is originally distinctive and initially registrable may, by common use, become "generic" and lose its meaning as a brand. A lack of distinctiveness opens the doors to a registered trademark being attacked and having the registration invalidated on the basis of non-distinctiveness. Countless marks such as "escalator" and "zipper" have become generic after improper use or lack of enforcement and now are commonly understood to refer to products not made by the original trademark owners. However, Canadian courts have held that if a trademark owner can show reasonable diligence in monitoring and policing their trademark, the respective trademark may remain on the register. Accordingly, it is important to monitor and police your trademark and similar trademarks used by others to ensure that your rights are not being diminished.


Policing your trademark and taking action against those who improperly use your mark mitigates the risk of the mark becoming diluted in the marketplace. A mark that lacks distinctiveness increases the risk of legal proceedings against your mark. For instance, others may commence proceedings to expunge or revoke your trademark registration, or oppose your trademark application even before your trademark is registered.

2. Loss of revenue due to confusion and little trademark recognition

Policing your trademark will help mitigate against the risk of customers confusing another similar trademark with yours. If a competitor uses your trademark without your permission to make use of the goodwill you established in the market, you could directly lose sales. For example, customers may purchase products believing them to be associated with your company when in fact they are the products of your competitor because of a similar logo or word mark. 


Trademark infringement also occurs when others use a trademark resembling yours in an inappropriate manner, for example, by selling lower quality goods/services, having poor customer service or promoting ideas that are negatively received by your customers. Such activity can cause your brand reputation to suffer. A watchful eye and legal action is an important safeguard to the maintenance of any brand portfolio. There are a number of ways you can monitor your trademark for confusingly similar marks in the marketplace, such as periodically monitoring the Canadian Trademark Database and other publications, or conducting web searches.


Brand owners should ensure that others are not using their trademark without permission in a misleading or improper way. To maintain the ability to hold others accountable for infringement, brand owners also need to take action if they come across others using their trademark or a brand in a manner that is confusing with or imitating their mark. Canadian courts have held that brand owners may lose their trade-mark rights unless they take reasonable efforts to protect and enforce their trademark rights. Examples of how a brand owner may deal with a confusingly similar trademark include a simple cease and desist letter, negotiating trademark license agreements or commencing litigation (such as opposition proceedings or trademark infringement actions). 


Interestingly, the current proposed Regulations to the Trade-mark Act (which are expected to come into force in 2019) will provide for letters of protest for pending applications. This would allow brand owners to raise issues against a trademark registration while conflicting marks are still in examination. Taking appropriate action early on is also important in helping brand owners avoid unnecessary conflicts with other entities and limiting legal costs.


Conclusion


It is important for brand owners to review their brand portfolios in Canada regularly to ensure that their brands are effectively and proactively being monitored and policed. For more information on trademark protection or trademark registration, please contact our experts who are always happy to help.

Disclaimer:  This website is not intended to offer legal advice or to be a substitute for a consultation on a case by case basis with an attorney.  The information provided above is meant for informational purposes only and may be subject to change. 

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