Trademarks in Canada – Overview Trademarks – Initial Hurdles and Scope

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  Protect goodwill (reputation; ability to attract custom) embodied in the TM
  
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    CONSUMERS: TMs help consumers to ID a product easily and tell those consumers that it is from the same source and of the same quality as it was the last time they bought it.
    
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    PRODUCERS: protection encourages producers to make quality products, to keep the quality high, and to invest in marks that help to identify the products.
    
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  This justification informs scope of the right (as is evident in Schecter’s article)  stronger protection to fanciful or “coined” marks than to commonplace or semi-descriptive ones, because these have more “selling power”; i.e. more ability to attract and retain custom.
  

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  Traditionally, fn of TM was to identify origin or ownership of goods to which it is affixed. Owing to modern trade and product distribution, this description of fn is no longer accurate – actual source is seldom known to consumer.
  
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  FN of TM is not to indicate that product comes from a particular source, but to indicate that the goods emanate from the same source as certain other goods that have already satisfied the consumer and which bore that same mark. True functions of the TM are to identify a product as satisfactory and thereby to stimulate further purchases by the consuming public; i.e. to create and retain custom
  
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  The TM is thus not merely a symbol of good will but also a very effective agent for the creation of goodwill. The mark imprints guarantee of satisfaction upon public mind, thus creating a desire for further satisfaction. THE MARK ACTUALLY SELLS THE GOODS.
  
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  Further, the more distinctive and unique the mark, the more effective is its selling power. [thus if we are protecting selling power, must give broader scope of protection to unique marks]
  
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  Schecter points out that traditionally, courts have not found infringement where mark is used in association with non-related goods. He argues that this is not consistent with the function of TM. Value of a TM depends on its uniqueness and distinctiveness, and the more it is used, the less unique, and therefore valuable it becomes. Its ability to attract and retain custom is thereby diluted. The more unique the mark, the more it is tied to the actual identity of the goods with which it originated. Thus, any use of it will result in loss of identity of goods and company which made them.
  
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  Schecter advocates differential treatment of fanciful/coined marks and common/semi-descriptive marks. The former should be more strongly protected than the latter b/c they have come to be associated in the public’s mind with the excellence of one particular product.
  
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  Schecter concludes by outlining the following principles:
  
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    The value of the modern TM lies in its selling power;
    
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    This selling power depends for its psychological hold upon the public, not merely upon the merit of the goods upon which it is used, but equally upon its own uniqueness and singularity
    
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    Such uniqueness and singularity is impaired by its used upon either related or non-related goods
    
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    The degree of its protection depends in turn upon the extent to which, through the efforts or ingenuity of its owner, it is actually unique and different from other marks.
    
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    In sum, the preservation of uniqueness of a TM should constitute the only rational basis for its protection.
    

1. 
   Mark must be a TM (see def’n in s. 2)
   
   1. 
      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 mfd, sold, leased, hired, or performed by others,
      
   2. 
      A certification mark, (see def’n at s. 2 and rules at s. 23)
      
   3. 
      A distinguishing guise (i.e. s. 2 (i) a shaping of wares or their containers, or (ii) a mode of wrapping or packaging wares the appearance of which is used to distinguish wares or services from those of others), or
      
   4. 
      A proposed trademark [anticipatory protection]
      
2. 
   Mark must be distinctive: i.e. a TM that actually distinguishes the wares or services in association with which it is used by its owner from the wares or services of others or is adapted so to distinguish them.
   
   1. 
      Cannot be a word that is “primarily merely the name or surname…” [s. 12(1)(a)]
      
   2. 
      Cannot be “clearly descriptive or misdescriptive” [s. 12(1)(b)]
      
   3. 
      Exception to a. and b.  SECONDARY MEANING [s. 12(2): A TM that is not registrable by reason of (1)(a) or (b) is registrable if it has been so used in Canada…as to have become distinctive at the date of filing an application for its registration].
      
   4. 
      Cannot be the name of the wares or services [s. 12(1)(c)]
      
   5. 
      Cannot be confusing with another registered mark [s. 12(1)(d)] (also test for infringement)
      

*Note that under passing off, the name of the wares can become distinctive (e.g. Reddaway)

3. 
   Distinguishing guise cannot be functional (LEGO, Reckitt v. Borden). **Functionality protected by patent. [s. 13: can only register a distinguishing guise if it (a) has become so used in Canada to have become distinctive at date of filing; …; (c) the registration does not interfere with the use of any utilitarian feature embodied in the distinguishing guse]
   
4. 
   S. 9 TM Act: certain marks are excluded for public policy reasons (e.g. Red Cross)
   
5. 
   Generic marks are excluded [s. 10]
   

1. 
   S. 19 – literal infringement (exact mark on exact goods or services for which the TM is reg’d)
   
2. 
   S. 20 – non-literal infringement  confusion analysis (same wares, slightly different mark; different wares, same mark)
   
   1. 
      Use – s. 4 + s. 2 = need use as a trademark (for the purpose of distinguishing wares or services), not merely use OF the trademark [Clairol/Michelin]
      
   2. 
      Once use is established  must show confusion [s. 6(5), Pink Panther]
      

**Less protection = competition is encouraged

3. 
   S. 22 – depreciation/dilution
   
   1. 
      Use – s. 2 only (+ specific section 4 criteria) = only need use OF the trademark (i.e. use in association with wares or services as per def’ns in s. 4), not AS a trademark (i.e. for purpose of distinguishing).
      
   2. 
      Only triggered by commercial uses [s. 4(1) – in the “ordinary course of trade” (wares) or (2) “advertising of services”] (Clairol but not Michelin or BCAA) [SH: BCAA says straight up that only applies in commercial contexts, even if can be construed as advertising…]
      
   3. 
      Depreciation – what is the standard? Is mere diversion of custom sufficient?
      
   4. 
      Critical: Beebe; Litman
      

1. 
   Non use: s. 45(3). Where the registered trademark, either with respect to all of the wares or services specified in the registration or with respect to any of those wares or services, was not used in Canada at any time during the three year period preceding the date of notice…registration of TM is liable to be expunged or amended accordingly.
   
2. 
   Abandonment: s. 18(1)(c) – register and never use = abandoned
   
3. 
   TM becomes generic: s. 18(1)(b) – registration of TM is invalid if (b) the TM is not distinctive at the time proceedings bringing the validity of the registration into question are commenced. [i.e. so popular that it is no longer distinctive of the source but rather of the product itself]
   

Protecting customers from deception (and persuasion?)

Desert

Incentives – to invest in quality and to invest in marks