Written by Johnathan Hinman
Perhaps more than anything else, a trademark is what makes a business instantly recognizable in the marketplace. The most successful corporations on the planet have trademarks that are known from coast to coast to coast: Coca-Cola with its curvy-cursive namesake, Nike’s game-winning checkmark, and Canadian Tire’s big red triangle are just a few examples we are all familiar with. Given the importance of trademarks to brand recognition, it is no wonder that an expansive body of law has come to permeate this aspect of business.
So, what are trademarks exactly? Trademarks were once exclusive symbols found on wares that identified the source of a particular product with a particular artisan or manufacturer. Such marks could not be copied except by the manufacturer to which they were assigned. Today, trademark operates in much the same way, but the rules have evolved in pace with industry and society. Trademark law is a branch of property law conceptualized within the field of “boundaries of intangible resources”, which encompasses other business law concepts such as patents, copyright, and intellectual property (“IP”) law more broadly. The area of law surrounding IP rights has come a long way from its humble origins. IP matters can be so complicated that many business owners don’t know how to safely create and protect their own brand elements. Indeed, many general practice lawyers often refer trademark matters to specialists. This blog is to help clarify some essential divisions of intellectual property rights, and the law governing trademarks in Canada.
Patent is the monopoly or exclusive right to profit from an invention, which an inventor obtains upon registering their invention or product. Copyright is the exclusive right an author of an artistic work has in their unique artistic creation. A trademark is “a combination of letters, words, sounds or designs that distinguishes one company’s goods or services from those of others in the marketplace.” Whereas copyright and patent may be essential to product development, trademarks are integral to brand development. Trademarks allow consumers to make quick connections between a particular image or other identifying feature and the reputation for quality that your brand is known for. Thus, the power of a trademark isn’t just in its eye (or ear) catching appeal, but the reputation for quality which it represents. A unique and readily recognizable logo, jingle or slogan coupled with a solid reputation for quality will set a business apart in the market place and help power the brand to success. But in order to do so properly, it is crucial to be aware of some important legal rules.
Trademarks are protected by federal statute in Canada. The Trademarks Act R.S.C., 1985, c. T-13 outlines the rules governing trademarks, and provides for a registry whereby businesses can register their particular trademarks so that no other businesses may use them. Registering a trademark involves submitting a particular mark for approval by a designated panel. Among other things, the panel makes their decision based on whether or not a particular trademark is already in use, and how similar it is to existing trademarks. Once approved, a registered trademark is protected against infringement in the marketplace. Trademark differs from other intellectual property concepts like copyright and patents in very important ways. The key differences were articulated by the Supreme Court of Canada in Mattel Inc v 3894207 Canada Inc  1 SCR 772:
“Unlike other forms of intellectual property, the gravamen of trademark entitlement is actual use. By contrast, a Canadian inventor is entitled to his or her patent even if no commercial use is made. A playwright retains copyright even if the play remains unperformed. But in trademarks, the watch word is “use it or lose it”. In the absence of use, a registered trademark can be expunged (s. 45(3) [of the Trademarks Act]).”
Whereas copyright is inherent (meaning that it is automatic at the moment an artistic work is created by an author and persists thereafter), trademark is only effective so long as it is registered and in use by the business. Moreover, a defining feature of trademark is that it must avoid “confusion in the marketplace”, meaning that it must be sufficiently unique so as to distinguish it from other brands’ products and services. Ensuring that one’s trademark is unique is an important part of maintaining one’s business’ image. A mark that is too similar to ones already in use by other businesses can lead to legal trouble.
Business owners who make use of a logo or other trademark (assuming it to be all their own) without first registering their mark assume serious risks. If someone is found to be in breach of another trademark registrant’s rights because their mark is too similar to another registered trademark, they could be sued for damages – or worse yet, may be prevented from using their particular logo of catchphrase, potentially erasing an important element of the brand. It is not necessary to have any intention to copy another business’ trademark in order to be sued. No one can be expected to be aware of all trademarks in use by all businesses at all times. Therefore, it is always sound advice to have one’s trademark reviewed and registered before operating their business.
But what exactly constitutes “confusion in the marketplace”? Is mere similarity enough? This question was answered in Mattel, mentioned previously. In that case, a well-known doll maker sued a chain of Montreal restaurants for their use of the name “Barbie’s” for their bar and grill houses. For their part, Mattel argued that the restaurant chain was unduly “pirating” Mattel’s well-known brand name to attract business, by possibly fooling consumers that there was some connection between the well-known toys and the grill houses. The restaurant contended that although the name was identical, the difference in the goods and services provided and the target market sought was sufficient to avoid any confusion. The Court provided:
“The respondent is not entitled to registration of its trademark unless it can demonstrate that use of both trademarks in the same geographic area will not create the likelihood of confusion, i.e. mistaken inferences in the marketplace. If, on a balance of probabilities, the Board is left in doubt, the application must be rejected.”
The Court in that case agreed with the position of the restaurant chain, finding that because the target market of each product was so dissimilar, no confusion was found, despite the similarities in each trademark. Barbie’s restaurant was allowed to keep its name. If, however, the chain had lost its case, the restaurant would have had to go through the arduous process of rebranding all of its locations and advertisements – a multi-million-dollar prospect.
This case and others show the importance of taking diligent steps towards ensuring that a trademark is established in accordance with all the proper legal precautions. After all, the most successful brands we know and love today did so at some point.
 Bruce Ziff et al, A Property Law Reader: Cases Questions and Commentary (Toronto: Thomson Reuters, 2019) at 267.
 Government of Canada, “What are Trademarks?” (3 July, 2019), online: <https://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr03718.html>
 Mattel Inc v 3894207 Canada Inc  1 SCR 772 at para 5.
 Ibid at para 31.
The views and opinions expressed in the blogs and case reporter are the views of their authors, and do not represent the views of the Desautels Centre for Private Enterprise and the Law, the Faculty of Law, or the University of Manitoba. Academic Members of the University of Manitoba are entitled to academic freedom in the context of a respectful working and learning environment.