Waiting to Protect a Trade-mark is Always the Most Expensive Option

March, 2016

 

We can generally appreciate the fact that it is better to have protection than have no protection.  In Trade-mark law, it stands that it is better to have a registered trade-mark than no registration.  However, for many new businesses and even some established businesses, except for what the common law provides, they have no protection for their brand.  When the times comes to assert the legal rights they have in their trade-mark without a registration, they quickly realize the battle will be a lot longer, more uncertain, expensive, and waged on multiple fronts.

 

There are two categories of other parties whose rights can impair and prevent the exercise of trade-mark rights.

 

1.         The Earlier Adopter

 

Maybe someone got to the trade-mark before your client.  Assuming that person obtained rights in the trade-mark in good faith and assuming your client’s use of its trade-mark at the same time would likely cause confusion in the marketplace, then your client would be better off picking a new trade-mark.

 

Without a comprehensive search of the Trade-mark Register along with any other use of the trade-mark in the marketplace, in business names, in corporate names, in domain names, online, etc., your client really does not have enough knowledge about whether another party has superior rights in the trade-mark your client wishes to adopt.

 

If your client were to use a trade-mark without searching for or becoming aware of trade-marks that may be confusing, then after years of use later, your client may receive a cease and desist letter from a registered trade-mark owner with superior rights.  When your client’s only options are a legal fight to the finish or changing its trade-mark (assuming no arrangement can be reached), these are painful pills for a client to swallow, especially when it could have been averted at the outset through a proper search and filing.

 

Filing delay can also be expensive when your client has superior rights.  Not protecting a trade-mark with a filing leaves open the door for, we’ll assume, an ignorant party to file a trade-mark application for the same or similar trade-mark as your client.  In certain cases, even though your client may have used the trade-mark for a longer period of time, they may have no legal rights to attack the trade-mark registration of the other party and consequently may be forced to stop using their trade-mark all together.

 

2.         The Infringer     

 

Some parties have less than your client’s best interests in mind.  Some will file trade-mark applications for established brands knowing full well that others have used the trade-mark before them.  If your client has not filed an application for its own trade-mark, and a party with less than noble aims does, your client will be placed on the defensive, compelled to battle legally for the right to its trade-mark.  If your client becomes aware of the trade-mark application before it is registered, it may be able to stop the application through the Opposition procedure.  If the trade-mark is already registered, your client will be forced to attempt to invalidate the trade-mark in the Federal Court.

 

It goes without saying that an Opposition procedure and a court application to invalidate a registered trade-mark involve uncertain results, time, and expense.  All could have been avoided had the client filed their own trade-mark application when it first began to adopt and use its trade-mark.

 

Lastly, when and if a party is infringing your client’s trade-mark in the marketplace, without a registration, you’ll be forced to bring a passing-off action instead of an infringement action.  Generally, for passing-off you have to prove a reputation, confusion, and damages, whereas in an infringement action you need only prove confusion and damages.  Establishing that your client had a reputation in its trade-mark is time-consuming and costly and could have been avoided were your client’s trade-mark registered.

 

Conclusion

 

Getting the best protection possible for your client’s trade-marks will undoubtedly save time and money in the years that follow.  Continuing to do business with no trade-mark registration will sooner or later either result in a protracted and expensive legal battle or the loss of any enforceable rights in the trade-mark as it becomes generic.

 

 

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Ryan K. Smith is a Lawyer and Trade-mark Agent at Feltmate Delibato Heagle LLP.  He is a corporate and commercial lawyer with expertise in all manner of intellectual property matters including trade-marks, copyrights, domain names, and confidential information.  You can reach Mr. Smith at (905) 287-2215 and rsmith@fdhlawyers.com.