Yesterday, I attended a Franchise Show in Vancouver.
It was a great event, even though less populated than expected due to good weather.
One thing I could not help but notice was the use by many franchisors and potential franchisors of the ™ sign next to their trademarks.
In context of franchising, this is a symptom of one of two very problematic scenarios.
In the first scenario, the franchisor actually has obtained the registration of its trademark, but continues to use the ™ sign in its marketing materials instead of the ® sign. Not only does this substantially depreciate the perceived value of the franchisor’s brand in the eyes of potential franchisees, such use is also confusing.
In the second scenario, the franchisor has not even applied for registration of its trademark. Granted, there are many businesses for which a registered trademark is an unnecessary luxury. This is the case where the trademark is not something that causes customers to buy from the business. Things are very different, however, in case of franchising. It is the brand that is the franchisor’s product, not what the brand offers to end customers. If a franchisor hopes to build a Canada-wide net of franchisees, it cannot rely on the notoriety of its trademark in one Province. Without a federally registered trademark, the value of the franchisor’s offering is questionable.
To recap, these are some of the benefits that a registered trademark (®) has over an unregistered trademark (™) in Canada:
– The right of exclusive use of the trade-mark across Canada with goods and services covered in the registration, with no geographical limitation to the area where reputation and goodwill has been established;
– No one can register a trademark that is the same as or confusingly similar with your registered trademark;
– The registration is prima facie evidence of your ownership and in a dispute involving a registered trademark, you do not have to prove ownership, the burden of proof is on the challenger;
– Registrar of Trade-marks will notify the owner of a registered trademark of the advertisement of somebody else’s trademark application if the Registrar is in doubt whether that other trademark is registrable;
– The right to sue for trademark infringement pursuant to Sections 19 and 20 of the Trade-marks Act;
– The right to sue for depreciation of the value of the goodwill pursuant to Section 22 of the Trade-marks Act;
– A registered trademark becomes incontestable after being registered for five years: a person who relies on common law rights may be unable to protect and register its trademark if another party registers a confusingly similar trademark and that mark is on the register for more than five years.
If you run a business that uses or sees franchising as its business model, wait no longer – Register your trademark in Canada now!
One of the most common misconceptions surrounding the law of trademarks in Canada is how trademarks relate to trade names. This misconception can have very costly consequences.
Trade names are used to identify a business or a company. Trade names are the “who” of the business. Customers do business with a business bearing the trade name.
Trademarks are used to identify products or services. Trademarks are the “what” of the business. Customers buy products and services bearing the trademark.
In very simplistic terms, customers buy trademarks from trade names.
Every business registered with the Registrar of Companies or incorporated (provincially or federally) has a trade name. But neither the reservation of a corporate name nor the formation of a corporation create a right to use the business name of the corporation in that jurisdiction.
How can that be? The government registers my business name and I can’t use it? Yes. Unfortunately, corporate registries don’t really check if the name submitted for the registration violates any prior rights. In other words, just because a provincial corporate registry approved your name for registration does not mean that you don’t violate someone else’s prior right (in a trade name or a trademark) and that you will not be compelled to change it in the future.
Rights in corporate names are treated like rights in unregistered trademarks, which means that they are nonexistent outside the geographical areas where the business is actually making use of and it known for its name.
Even if you register a corporate name that no one else had thought of before, it does not give you the right to stop others from using it, unless you can prove that other person’s use of the name creates confusion.
Just because you came up with a fancy company name that helps you attract customers for whatever products or services you are offering does not mean that your name, or brand, is a trademark. If you are not using your trade name as a trademark, your don’t have trademark protection for your trade name.
Trade name can be registered as a trademark, but only if you use it as such, that is, to identify products or services. This is often referred to as using the trade name as an adjective, as opposed to a noun.
Let’s say, your company is called Awesome Software Inc. and you make software. If you phrase your marketing materials to say that “Awesome Software Inc. offers such great titles as Text, Calculator and Presentations”, you are using “Awesome Software” as a trade name. If you phrase them to say “We offer Awesome Software™ Text, Awesome Software™ Calculator and Awesome Software™ Presentations”, then you are using “Awesome Software” as a trademark.
The classic example is, of course, Microsoft® Windows®. We don’t buy Microsoft, we buy from Microsoft. But because “Microsoft” is a part of the name of the product we buy (and part of the reason why we buy it), it is also protected as a trademark in its own standing.
If you believe that a substantial number of your customers are attracted to your business because of your trade name, you should consider using the trade name as a trademark and getting it registered as a trademark.
In other words, if you consider your trade name a factor that gives you a competitive advantage, you should not rely merely on registration of the company name with the Registrar of companies. You should accord the asset that you care about the protection that it deserves, and the only way to do it is through registering it as a trademark.
CIPO offers a very sophisticated trademarks search on its website.
Unfortunately, as with most government websites, the interface is less than user-friendly.
This is why I created my own script that allows you to search for registered trademarks and trademark applications and displays information in a much more visually pleasing way.
Unfortunately, because of how CIPO’s database is designed, my search can only be used for the basic search, not the advanced search.
Feel free to use it. And if you do – please don’t forget to tweet about it!
Canada is not an active participant in international treaties on intellectual property. It is currently a party to only 7 out of 25 treaties administered by the World Intellectual Property Organization: Convention establishing the World Intellectual Property Organization, Paris Convention for the Protection of Industrial Property, Berne Convention for the Protection of Literary and Artistic Works, Patent Cooperation Treaty, Rome Convention (International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations), Strasbourg Agreement Concerning the International Patent Classification, and Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure.
Below is the list of countries that are a party to 7 or less treaties: Afghanistan, Andorra, Angola, Antigua and Barbuda, Bahamas, Bangladesh, Belize, Bhutan, Bolivia, Brunei Darussalam, Burundi, Cambodia, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Congo, Côte d’Ivoire, Democratic Republic of the Congo, Djibouti, Dominica, Equatorial Guinea, Eritrea, Ethiopia, Fiji, Gambia, Grenada, Guinea-Bissau, Guyana, Haiti, Holy See, India, Indonesia, Iran, Iraq, Kiribati, Kuwait, Lao People’s Democratic Republic, Lebanon, Lesotho, Libya, Madagascar, Malawi, Malaysia, Maldives, Malta, Marshall Islands, Mauritania, Mauritius, Micronesia, Mozambique, Myanmar, Nauru, Nepal,
New Zealand, Niger, Nigeria, Pakistan, Palau, Papua New Guinea, Paraguay, Qatar, Rwanda, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Samoa, San Marino, Sao Tome and Principe, Saudi Arabia, Seychelles, Sierra Leone, Solomon Islands, Somalia, South Africa, South Sudan, Sri Lanka, Sudan, Suriname, Swaziland, Thailand, Timor-Leste, Tonga, Tuvalu, Uganda, United Arab Emirates, Tanzania, Vanuatu, Venezuela, Yemen, Zambia, and Zimbabwe.
With all due respect to India,
New Zealand, South Africa, and the other sovereign states on this list – am I the only one who is not overly impressed by the company of the countries that Canada finds itself in?
Of course, there are many underdeveloped countries that have joined many IP-related treaties, so the correlation may not be perfect. But still, does anybody else see the problem with Canada’s participation in intellectual property treaties equal of that of Rwanda?
PS. On September 10, 2012 New Zealand acceded to the Madrid Protocol and the Singapore Treaty on the Law of Trademarks, so it should be removed from this list.
Some coincidences are nothing short of ironic.
On April 26, 2012, RCMP proudly reported on mass seizures of counterfeit goods on World Intellectual Property Day. According to RCMP’s report, the Mounties participated in an INTERPOL-coordinated operation aimed at IP crime. In just two weeks from March 1, 2012 to March 15, 2012, over a thousand interventions were made by police, custom officials, investigators and Intellectual Property crime experts at key locations on land, sea and airport border control points. During the same time, interventions in markets, shops and street vendors were made. In total, over a million items were recovered, and over 200 arrests were made. The total value of the seized counterfeit goods was over CA$7,100,000. The counterfeits included perfume, headphones, apparel, jewelry, handbags, cellular phones and machinery.
At about the same time, USTR (United States Trade Representative) released its 2012 Special 301 Report, where Canada remained on the Priority Watch List along with Algeria, Argentina, Chile, China, India, Indonesia, Israel, Pakistan, Russian federation, Thailand, Ukraine, and Venezuela. The findings in the Report regarding Canada are as follows:
Canada remains on the Priority Watch List in 2012, subject to review if Canada enacts longawaited copyright legislation. The Government of Canada has given priority to that legislation. The United States welcomes that prioritization and looks forward to studying the legislation once it is finalized, and will consider, among other things, whether it fully implements the WIPO Internet Treaties, and whether it fully addresses the challenges of piracy over the Internet. The United States also continues to urge Canada to strengthen its border enforcement efforts, including by providing customs officials with ex officio authority to take action against the importation, exportation, and transshipment of pirated or counterfeit goods. The United States 26 remains concerned about the availability of rights of appeal in Canadaâ€™s administrative process for reviewing the regulatory approval of pharmaceutical products, as well as limitations in Canadaâ€™s trademark regime. The United States looks forward to continuing its close cooperation with Canada on IPR issues, and will continue to work with the Government of Canada to resolve these and other matters.
Not surprisingly, Michael Geist has condemned the report, stating that “[t]he inclusion of Canada on the priority watch list is so lacking in objective analysis as to completely undermine the credibility of the report.” He quotes his submission with Public Knowledge, where he wrote, among other things: “Consequently, rates of infringement in Canada are low and the markets for creative works are expanding.”
The rates of infringement cannot be calculated in isolation from two important factors: what constitutes an infringement and how economically viable it is to enforce copyright in every case. In other words, if every unauthorized use of another’s works falls under one or the other form of exception, then it is only natural that infringement rates will be low. If there is no legal authority allowing copyright owners to go against ISPs for knowingly hosting infringing works, it is only natural that copyright owners do not waste their resources going against each and every individual who downloads these works, thus also contributing to the pink-glasses statistics.
Another reason for lack of the objective standards is the absence of clearly defined philosophy of why we have copyright protection at all. I wrote about it in much detail in my review of William Patry’s book “How to Fix Copyright”. If assessment of IP laws is guided by an elusive “balance” paradigm, then any conclusions may be drawn. It is equally plausible to claim that Canada’s IP laws are fully adequate or that they are completely inadequate.
Going back to the coincidence between the timing of the 301 Report and the RCMP report. One thing is clear. Border measures are crucial in today’s world for efficient enforcement of intellectual property. In this regard, the 301 Report makes perfect sense.
Are there countries where intellectual property is in greater disrespect compared to Canada? Of course! Is this sufficiently good reason to celebrate? Absolutely not!
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Tags:Small BusinessNew Copyright ActFair DealingCollectivismPhilosophy