Legal Commentary

Use it, prove it, or lose it the law on trade-marks

By David Canton

for the London Free Press - October 27, 2008

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Many businesses rely on the branding of their products to increase profitability and secure a place in highly competitive markets.

A recent Federal Court, Trial Division, decision illustrates how important it is for a business to be able to prove it has used its trade-marks properly.

In Grapha-Holding AG versus Illinois Tool Works Inc., the court allowed an appeal of a decision of the Registrar of Trade-marks, and held that the registrar did not have sufficient evidence to find that the trade-mark in question had been in use. As a result, the trade-mark registration was expunged.

Companies go to great lengths to ensure their trade-marks are properly registered. However, once the trade-mark has been obtained, many businesses fail to appreciate the importance of using trade-marks properly and keeping evidence of that use.

The Trade-marks Act is based on trade-mark rights arising from use of the trade-mark. Proper ongoing use of the trade-mark is crucial to protecting the trademark. Failure to use the trade-mark as defined at law may lead to all rights associated with the trade-mark being lost.

A trade-mark must be used consistently and without alteration from the way it has been registered. When dealing with wares, the trade-mark must be on the goods themselves or its packaging. For services, the trade-mark must be used when the services are being delivered or advertised.

If the trade-mark is called into question, one must be able to provide evidence to prove it has been used as required by the Trade-marks Act.

The act provides a mechanism for anyone to start a proceeding to require a trade-mark registrant to prove they used the trade-mark within the last three years. If the registrant can’t provide the required proof, the mark is expunged.

It also may be necessary to prove use if a business challenges another entity’s right to use a mark that the business feels is confusing with its mark, or if someone else registers a domain name that is similar to the mark.

To be able to provide the required proof, samples should be kept of use of the trade-mark over time, along with precise details of when and how the trade-mark has been used.

Also record volumes of the product sold annually, and details such as the number of brochures printed and distributed containing the marks.

The more precise this information is, the better, and the more third-party proof (such as an invoice showing the number of brochures printed), the better.

Though this information is easy to collect and retain along the way, many businesses don’t, as they don’t understand its importance. If one fails to keep adequate records, the consequences to one’s trade-mark and brand can be significant.

Businesses invest a lot of money in their brands and the goodwill and recognition that goes along with it.

There’s too much at stake to risk losing the rights to a trade-mark just because the owner failed to keep adequate records of its use.

The steps required to maintain the protection of a registered trademark may be simple, but the consequences of failing to take these steps can be devastating.

Full post as published by eLegal Canton on October 29, 2008 (boomark / email).