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Common Law Trademark Rights in Canada

By: Christopher Heer, Dominic Cerilli, Malcolm Harvey, Nikita Munjal | Last updated: June 14, 2023
Trademark rights in Canada can be obtained in two ways: through registration under the Trademarks Act or through use of a mark in Canada over time.

Registration provides proof of trademark ownership and a presumption of validity until proven otherwise - that is, an adverse party could bring a claim challenging the validity of your registration as long as certain conditions are met under the Trademarks Act. Registration also provides nationwide protection against trademark infringement and lasts for as long as the registration is renewed. Finally, registered trademarks are also protected against depreciation of goodwill – this permits an owner of a registered mark to take legal action against an adverse party that is using the registrant’s mark in a way that is likely to damage the goodwill attaching to the same. Reproducing your competitor's registered trademark for the purpose of comparing your product with theirs, for example, could leave you vulnerable to claims of depreciating your competitor’s goodwill.

In contrast, unregistered marks are afforded a narrower scope of protection, and a party asserting ownership of an unregistered mark must meet several criteria to successfully enforce its rights.

What Legal Rights Do Unregistered Trademarks Confer?

Unregistered trademarks receive protection if certain conditions are met – this protection is in the form of the tort of passing off, which arises from the common law (i.e., from court decisions) and is also codified in the Trademarks Act.

Broadly, passing off arises where a party

  • directs attention to its goods, services or business – typically through the use of a confusingly similar trademark – in a manner that creates source confusion with the goods, services or business of an unregistered trademark owner;
  • substitutes goods or services ordered or requested by a consumer with those of another source; or
  • describes its goods or services in a manner likely to mislead the public as to the character, quality, quantity, composition, geographical origin or mode of manufacture, production or performance of those goods or services.

While the scope of protection for unregistered trademarks is significantly less than that of registered marks, the remedies available to successful claimants are similar – a successful plaintiff in a passing off case may obtain compensatory damages or an accounting of the defendant’s profits, injunctive relief and/or delivery up or destruction of offending physical items.

How do I Protect an Unregistered Trademark?

Common law passing off requires proof of three elements:

First, the party asserting unregistered trademark rights must possess reputation or goodwill in its mark. More particularly, the owner of an unregistered mark must furnish evidence (e.g., in the form of surveys and/or sales and advertising data) that demonstrates an association in the minds of consumers between its unregistered trademark and the goods or services in association with which the trademark is used.

Keep in mind that, while you’re likely to have trademark rights in your logo and trade name, your unregistered mark can also be, for example, your product’s get-up (e.g., unique packaging). If, for example, you sell coffee in a custom-made bottle design, and you can furnish evidence that customers associate that custom-made bottle design with your coffee, then you can prevent others from selling their coffee in similar shaped bottle designs provided that the other elements for passing off are met.

Importantly, the scope of market reputation defines the scope of protection afforded to the unregistered mark. For example, if the unregistered mark is only known within a specific geographic area, the scope of protection afforded to that mark will be limited to that same geographic area.

Second, the unregistered mark owner must prove there has been deception of the public due to a misrepresentation. To prove this element, the unregistered mark owner must show that the public was exposed to a misrepresentation likely to cause confusion. That is, consumers must be led to believe that the goods, services or business of the adverse party are those of the unregistered mark owner or are otherwise associated with the unregistered mark owner.

Third, the owner of an unregistered mark must prove that it has suffered actual harm or is likely to suffer actual harm as a result of the passing off. This requires the unregistered mark owner to furnish evidence showing that the adverse party’s activity poses a threat to the unregistered mark owner’s business or presents a real prospect of loss. Losing control over the message conveyed by your mark, through the consumer's belief that the goods, services or business of the adverse party are those of the unregistered mark owner, can be a recognizable harm in its own right.

Finally, claimants asserting this form of passing off as codified in the Trademarks Act must also meet an initial “threshold” requirement – they must prove possession of a valid and enforceable trademark at the time the adverse party first began directing attention to its own goods, services or business. In other words, a claimant must show that it had used its mark for the purpose of distinguishing its goods or services from those of others as of the beginning of the adverse party’s allegedly unlawful conduct.

While this imposes an additional burden on litigants pursuing passing off claims under the Trademarks Act, note that claims under the Trademarks Act may be brought in provincial court or in Federal Court – in many cases, it may be preferable to pursue trademark litigation in the latter. For further discussion of this topic, please see our resource on enforcement of intellectual property rights.

Considerations for Protecting Unregistered Trademarks

If the above test is met, unregistered marks are afforded protection against the tort of passing off by use of confusingly similar trademarks. However, enforcing unregistered trademark rights is often a complicated exercise, as gathering the required supporting documentation can involve significant time and effort, and that evidence may still be insufficient to support a successful claim. When contemplating a dispute involving unregistered trademarks, you should review records and data in your possession regarding the nature and extent of your use of your unregistered trademark and consider the short- and long-term impact of the would-be defendant’s activity. You should also consider whether there may be bona fide users of similar marks.

Legal counsel can help unregistered trademark owners conduct a cost-benefit analysis to understand the strength of their claim, compile evidence in support of their unregistered trademark rights and calculate the costs they will be facing if they choose to pursue legal action against an infringing party.

Generally, your claim will be stronger where:

  1. you have used your mark to a significant extent and for a long period of time,
  2. your mark is highly distinctive,
  3. your mark and that of the would-be defendant share a high degree of similarity, and
  4. the nature of your goods, services and channels of trade is similar to that of the would-be defendant.

Note, however, that unregistered trademarks are typically not protected against depreciation of goodwill. As such, unauthorized use of your unregistered trademark that devalues your brand but does not result in confusion may not give rise to legal recourse.

Unregistered trademark owners must be careful when confronting an adverse party with legal action. Even if there are multiple similarities between the trademarks at issue, the adverse party will likely argue that the differences between the marks are sufficient to distinguish its mark from yours and dispel any likelihood of confusion amongst consumers.

Thus, robust evidence in support of the scope of your mark’s reputation, the presence of deception due to misrepresentation, and harm or the potential for harm are important to successfully enforce unregistered trademark rights.

Being Proactive versus Reactive

While at first glance the expense of trademark registration may appear avoidable, the costs associated with pursuing or defending against a trademark dispute with no registered trademark rights are vastly greater than the costs of trademark registration. Asserting legal rights associated with an unregistered mark typically requires furnishing multiple types of evidence to prove your reputation or goodwill in the mark. Registration avoids many of these costs by providing an evidentiary presumption of trademark validity and ownership, thereby simplifying the enforcement process.

If you believe that your trademark is distinctive and has commercial potential, trademark registration and/or speaking with a trademark professional about trademark strategy are worthwhile investments.

To learn more about the steps necessary to apply for trademark registration in Canada or to resolve a trademark dispute, contact us now for a complimentary and confidential initial telephone appointment.