They are perhaps the most important assets of your business. Your business name, the name of a key product or service, your logo, your slogan…these are your trademarks. They identify your business in the eyes of your customers and distinguish it from those of your competitors. They are lasting symbols which serve to seal and protect the goodwill in the business which you have worked so hard to develop. It is not surprising then that you spend considerable time and effort in selecting the right trademarks for your business.
In doing so, however, are you taking the legal steps necessary to ensure that: (i) your proposed trademarks are available for use; and (ii) you will be in a position to stop others from infringing them in the future? The first step is “defensive” in nature and consists of obtaining advice as to the availability of your proposed trademark. The second step is an “offensive” one which comprises the filing of applications to register your trademark in those countries where it is found to be available.
The Need for Defensive Measures
Imagine the scenario. Your business has just begun to establish a presence in the North American market following six months of sales in both Canada and the United States when the cease and desist letter arrives. It is from a New York law firm and it demands that sales of your product immediately cease in both countries due to alleged trademark infringement. After seeking legal advice, you are told that the claim is valid. The name of your new product has infringed the registered trademark in Canada and the U.S. of a multinational corporation. You are faced with the prospect of: (a) withdrawing your product from the market and removing reference to the trademark from all advertising and promotional materials; (b) making a payment to the registered trademark owner in response to a claim for damages; and (c) selecting and implementing a new product name after having spent the last year developing the previous name.
How can this scenario be avoided? Before adopting a trademark (whether the name of your business, product or service), a trademark availability search should be conducted and legal opinion obtained confirming that the proposed trademark is available for use in each of those countries in which you intend to do business. For most businesses, this means starting with Canada and the United States. Preliminary searches (brief searches of the internet and the relevant trademark databases) are often useful in identifying any initial direct hits. If they are clear, however, comprehensive trademark availability searches are highly recommended in each relevant country prior to adopting your trademark. This generally includes a more thorough search of the trademark database, as well as searches of similar product, business and domain names (all of which can pose a block to the adoption of your trademark even though they may not have been applied for or registered as a trademark). The determination of whether the rights of the owner of a prior trademark, business or domain name would be infringed by your proposed trademark depends on whether their simultaneous use would result in confusion when taking into account such factors as their visual and/or phonetic similarity and the similarity between the goods, services, channels of trade and customers connected to their respective businesses.
Shifting to the Offensive
Searches have been completed and your proposed trademark appears to be available in your desired countries. You decide to begin using your trademark. You are now ready to shift to the offensive. Applications to register your trademark should be filed in those countries where it has been confirmed to be available as soon as possible. In fact, in many countries it is the first to apply to register a trademark, not the first user of that trademark, who is entitled to its registration. Unless you have a business establishment outside of Canada and can otherwise qualify for the Madrid international filing system, you must file your trademark applications on a country by country basis with the exception of the European Community where one application (if unopposed) can result in a registration covering the entire Community. If your business is based in Canada, remember to file your first application in Canada because by doing so you will automatically preserve the right to file a corresponding application (with the same effective filing date as the original Canadian application) for the same trademark in relation to the same goods and services in most other key countries of the world (provided you file the corresponding application(s) within 6 months of your Canadian application).
In Canada and the United States (where the use of your trademark itself gives rise to certain rights), the importance of the registration remains clear. It provides you with: (i) the exclusive right to use your trademark throughout the country; and (ii) evidence to facilitate the enforcement of your trademark against subsequent infringers. Assuming there are no significant objections or formal oppositions by third parties to your application, it generally takes 10 to 14 months between the filing of an application and the receipt of a registration in Canada and the United States. During that process, the application must be examined (to confirm that it meets legal registrability requirements and does not conflict with any prior trademarks), approved, published and subsequently allowed by the Trademark Office after interested third parties have been given an opportunity to oppose it.
The next time you contemplate the adoption of a new trademark and wish to make sure that you have taken the proper legal steps in doing so, remember to follow the simple rule: "Defense first; then Offence".
Reprinted from Exchange Magazine for Business, Vol. 23, No. 2.