In Canada, trademark rights are acquired first and foremost through use. So what are the benefits of applying to register each of your trademarks?
1. A Canada-wide exclusive right
The rights conferred by the use of a trademark are limited to those places where the owner can prove such use. However, registration of a trademark grants the owner the right to the exclusive use of the mark in association with the goods and services included in the application for registration. This exclusive right extends throughout Canada, regardless of where the mark has actually been used. For instance, a furniture manufacturer that sells its products only in the Montréal area will not be able to take action against a competitor that uses the same mark in the Calgary area unless it holds a registration.
Trademark registration is valid for ten years and is renewable indefinitely upon payment of government fees. Therefore, the exclusive right conferred by registration can extend indefinitely, as long as the registration remains in force.
2. Facilitate defence of the mark
The certificate issued by the registrar when an application proceeds to registration confers a presumption of ownership and validity on the owner. Thus, a person claiming that the owner has no rights in the mark would first have to invalidate the registration.
In practice, a demand letter sent by an owner to a competitor to cease illegal use of its trademark will be more effective if the owner references the registration certificate. Without a certificate, the plaintiff will have the burden of demonstrating how, where, and since when the mark has been used in order to defend its rights.
3. Maximize the value of your business
Ownership of registrations or applications makes it much easier to value a company’s intangible assets. In the eyes of a potential buyer or investor, a registration provides assurance that the company’s intellectual property rights are adequately protected. The underlying risk associated with unregistered marks makes it much more difficult to value a company’s trademark portfolio.
Therefore, it can be cost-effective to protect your company’s trademarks from the outset by filing applications for registration. These upfront efforts will be rewarded during the company’s growth phase when it starts to look for potential investors or buyers.
4. Block subsequent applications
The registrar routinely conducts a confusion analysis when reviewing a trademark application. If in the registrar’s opinion, a mark previously filed in the register could be confused with the application under analysis, the registrar will issue an objection. If the applicant cannot convince the registrar of the absence of confusion, the application will ultimately be deemed abandoned, and the mark will not be registered.
In this way, the simple act of applying to register your mark allows you to block potential competitors without lifting a finger.
By contrast, the owner of an unregistered trademark will have to proactively monitor the register and oppose applications that could be confused with their trademark.
Some e-commerce sites (e.g., Amazon®) require proof that the mark associated with the products you want to sell on the platform is registered or is the subject of an application for registration. In many cases, this is a prerequisite of permission to display products on the site.
In short, even if the process may seem tedious, filing applications for registration each time a new trademark is launched remains an important tool to position your company relative to competitors as well as with potential investors and buyers.