This post was written prior to our January 2017 merger, under our previous firm name, MacPherson Leslie & Tyerman LLP.
“We just launched a new product and want to get the name protected.” We get this a lot. While it is always great to see businesses being proactive about getting their trademarks registered, waiting until the product or service is already on the market to address the legal aspects of a brand means an important step has already been missed: making sure the new trademark was available in the first place.
What are the Risks of Adopting a New Trademark without Searches?
When you start using a trademark that you believe is new but which actually belongs to someone else (or which is perceived as being confusingly similar to an existing trademark), the risks include:
- Having to rebrand your goods / services
- Being ordered to pay your profits to the owner of the trademark
- A resource-intensive legal dispute (which you may win, lose or settle)
- Not being able to get your trademark registered
If someone has a valid trademark registration and you start using their trademark (or a confusingly similar variation of their trademark), they may be in a position to sue you for trademark infringement. In fact, they may be put in a position where they must do so in order to stop you from diluting their rights. This means that they can get an injunction to prevent you from using it. If they act quickly, a court may even order you to turn your profits over to the owner. Even if the owner decides not to pursue you, the Trademarks Office will not let you register your trademark, leaving you without the benefits of a registered trademark (which benefits we will discuss in the next Trademarks 101 post).
If someone has been using a trademark but has neglected to register it and you start using their mark, the dispute is a bit more complicated. However, you will still be at a disadvantage. If you are in the same geographic region as they are, they may be able to sue you for common law passing off, thereby getting an injunction to stop you from using the mark and, possibly, obtaining an order for your profits. However, if you are not in the same location, the prior user has a more complicated process. For starters, they can apply to register their trademark, wait for a registration, and then sue you for trademark infringement.
If you beat a prior user to the Trademarks Office and apply to register the mark, the prior user can oppose your registration. If you manage to get a registration before you come to the attention of the prior user, they can apply to the Federal Court to have your registration cancelled (at least, for a period of five years following the registration).
The good news is that you can easily avoid disputes with a prior user and make sure you can register your new trademark by conducting searches.
When should I Conduct a Search?
There are several circumstances that may call for a trademark search:
- Starting a new Business. If you plan to use your business name as a trademark (i.e. to identify your goods / services), the basic corporate name search that may be conducted is likely insufficient. You are adopting a new trademark and a search should be conducted.
- Launching a new Product or Service. If you plan to use a new trademark for a new product or service, then a search is a must. However, if you are using your existing trademark but are offering goods / services outside the scope of your typical offerings, a search may still be appropriate.
- Entering a New Market. Searches are advisable when bringing your goods and / or services to another country. Searches may also be available when you are moving to a different market in Canada, particularly if you have yet to register your trademark. A third party may have common law rights in your potential market.
What Search Options are Available?
There are a range of different search options available and a trademark professional can help you select the right search option. We’ll use the remainder of this article to go over some of the most popular options.
1. Knock-Out Search.
A Knockout Search is a quick and economical way to determine if your trademark merits more rigorous consideration. The search involves looking for “direct hits” and very similar trademarks. If you are considering a short list of potential trademarks, a Knockout Search can help indicate which marks are high risk and which merit further research.
2. Registry Search.
A Registry Search determines if there are any pending or registered trademarks that will be a barrier to the successful registration of your trademark. The search is broad and finds trademarks with similar connotations, spelling variations, synonyms and similar root and constituent elements, all within the channels of trade of your goods / services. A Registry Search opinion also typically includes an analysis of the registrability of your trademark against the absolute grounds contained in the Trademarks Act (e.g. is not descriptive of your goods / services, is not immoral or scandalous, etc.).
3. Comprehensive Search.
A Comprehensive Search is the broadest and most sophisticated type of search. It includes a Registry Search and a search of various other databases and sources. It covers unregistered trademarks by searching various databases, including registered web domains, business names, news releases, telephone directories, and even search engines. In addition to determining if a trademark is registrable, it should also find any common law trademarks ensuring you do not adopt a new trademark that some third party already has rights in.
Key Takeaway: Before Adopting a new Trademark, have a Proper Availability Search Conducted
Legal disputes over trademarks can be long, costly, and damaging to your goodwill. Trademark searches are comparatively quick and inexpensive.
About the Trademarks 101 Series
MLT’s Trademarks 101 is a series of posts about trademark law designed to provide a plain-language overview of trademark law for businesses, marketing and adverting professionals, and in-house counsel. Trademarks 101 comes from MLT’s trademarks team: Chris Woodland and Kursty Peterson. These posts are intended to be a supplement to – not a replacement for – the advice of an experienced trademark professional.
The five posts in this series include: