Why Register Your Trademark?
We are often asked whether a business should register its trademark. Most people have not encountered problems with competing businesses and, as such, do not consider the registration of their trademarks as being necessary. It is only when a problem arises that people address this issue. By that point, it may be too late.
The common law has developed to protect trademarks in the absence of registration. Most people are unaware that trademark rights arise simply from use. In fact, formal registration is not permitted until proof of use is shown. Therefore, by using your trademark, you may have established some rights which you can enforce. However, those rights are often inadequate in the event of a marketing attack from a competitor and ownership of those rights may be disputed by companies involved in business together.
The common law permits an owner of a mark to bring an action for "passing off". Passing off requires proof that a trader has attracted custom by using a mark that is similar to another's mark in such a way that customers who purchase the trader's goods believe them to be the goods of the other. A problem with passing off is that you only acquire rights to your mark in those geographical areas of the country where you can prove that your mark has a reputation for indicating source. This can be very difficult and costly to prove. Even when a reputation is shown, actual harm from the passing off must be shown in order to recover damages. It follows that, if the trader is using his similar mark in an area where you have never used your mark, you may have no recourse to stop him.
On the other hand, rights which arise from registration extend this common law right. First of all, a registration provides national protection to the registered owner, even where there has only been regional use. This means that you do not need to prove your trademark's reputation and that your rights extend to areas in which you may have never used your trademark. The scope of the protection is also broadened. An owner of a registered mark will be able to stop others from passing off, not only the specific wares or services, but also similar and related wares and services. In this way, for example, you could prevent a trader in Vancouver from using a similar trademark in association with similar wares or services to those associated with your registered trademark, even when you have only used your registered trademark in St. John's.
A registered owner is afforded two causes of action in addition to passing off: (i) Infringement; and (ii) Depreciation of Goodwill. Infringement is the use of a mark that is likely to cause confusion as to the source of the wares or services with which it is associated. This can be used to prevent a person from selling, distributing or advertising his wares or services with a mark that is confusingly similar to your registered mark, even where there is no intent to pass off. Unlike the common law action for passing off, in an infringement action the registered trademark owner does not need to prove that the trademark has acquired a reputation, nor does it need to prove actual harm, since infringement per se constitutes harm.
Depreciation of Goodwill involves the use of a mark in such a way as to cause damage to the reputation attaching to the mark. One example of such a use is called dilution. One can deal with a mark without "using" the mark as defined under the Trademarks Act, thus avoiding infringement. Comparative advertising is an example of this kind of use. A trader can use a mark for comparative advertising and not "infringe" the mark. However, if the trader causes a depreciation of the goodwill attaching to the mark, he may be stopped by a registered owner. This type of broad protection is not afforded at common law.
Other benefits arising from registration are more procedural in nature. For example, there is a presumption of the validity of a registration. This presumption shifts the onus onto the defendant to prove that the registration is invalid. This means that your rights are less likely to be attacked if you have a registration than if you merely rely on your common law rights.
Additionally, registration may be required in order to license your trademark. There is the risk in licensing a common law trademark that the mark may no longer indicate one source (i.e. the licensor), but may also indicate a source as being the licensee. If this occurs, the trademark will no longer function as a trademark and all rights may be lost.
Finally, a registration provides you with the right to apply for corresponding foreign registrations using the first filed date as your priority date, if filed within the applicable period. This can be used for easy multi-national filing for companies operating on an international scale.
Apart from the substantive and procedural benefits of registration, having your mark appear on the register has some practical benefits. For example, it helps stop potential innocent infringers early. Often, the register is the first and only place people look to see if a proposed trademark or trade-name is available. If your mark is found on the register, those people will choose a different mark. It is always better to prevent the problem than to try to deal with once it arises.
An often overlooked aspect of trademark protection is the notation applied to the mark. While anyone can apply the notation "TM" or "MC" (marque de commerce) to indicate that their unregistered mark is being used as a trademark, the ® symbol can only be used in association with registered marks. The ® symbol is an internationally recognized symbol that affords instant credibility to companies whose trademarks possess such a notation. It is also a stern warning to those who may be thinking that your mark is an easy target. There is no mistaking that a trademark noted with ® symbol will be vigorously enforced.
The benefits of registering a trademark cannot be overlooked. While the common law does provide some protection, it does not equal the level afforded by registration under the Trademarks Act. The earlier a mark is registered, the earlier an owner can begin to reap the full benefits of the use and exploitation of its intellectual property.