Maintain your Trademarks, At your own Peril
Updated: May 19
In consumer facing, brand centric industries, trademarks are a valuable corporate asset. Formalizing protection of that intangible asset by obtaining trademark registrations is a key strategic move. Owning trademark registrations is beneficial for a multitude of reasons. However, simply obtaining the trademark registration is not sufficient. Care must be exercised even after the trademark has registered because there are a myriad of ways in which trademark rights can be lost by way of invalidation procedures. Below is a summary of how trademark rights can be lost:
1. Improper Use of the Trademark: Genericized
Trademark rights are based on use, which means that how a trademark is used carries a lot of weight. Allowing the trademark to become genericized means that the trademark and the product itself become synonymous with each other. For example, plasticine used to be a trademark that was registered in association with molding clay. However, the product and the trademark become one and the same, which led to plasticine becoming a genericized dictionary defined term. Thus, the trademark rights, which were likely very valuable as a corporate asset, were lost.
2. Unpoliced Use of the Trademark: Lack of Distinctiveness
Brand owners have to be their own police watchdog. It is up to the brand owners to enforce their rights, even once they obtain trademark registrations. By failing to enforce against unauthorized 3rd party uses, the brand owners’ own trademarks lose their distinctiveness. This can jeopardize the trademark rights and the enforceability of those rights.
3. Unmanaged Licensed Rights
Canadian trademarks law allows brand owners to license their trademark rights to 3rd parties. This happens in a myriad of different business settings: franchise, distribution, collaboration, manufacturing, brand partnerships etc. However, the Trademarks Act clearly stipulates that the brand owner must exhibit sufficient control over the character and/or quality of the wares and services in order for the brand owner to avoid diluting their rights to the trademarks. Lose of such control can enable third parties to invalidate the brand owners’ trademark rights. In fact, earlier this year, the Federal Court confirmed that a franchisor brand owner lost its trademark rights because it failed to exhibit sufficient control over the licensed rights, even in a scenario where it was licensing to franchisees, seemingly within its own corporate family.
4. Inconsistent Use of Trademarks
As previously advised, use of a trademark is an important concept in trademarks law. In order to maintain trademark rights, the brand owner must consistently use the trademarks in Canada. Any significant periods of non-use of the trademark in Canada that cannot be justified, may be grounds for any interested party to invalidate the trademark registration.
5. Varying Use of Trademarks
Trademarks that are registered are protected in the version in which they are registered. If the trademark begins to be used by the brand owner in a way that varies from how the trademark was registered, it is possible for any interested party to invalidate the trademark for non-use. Thus, it is important to ensure that the brand owner’s trademark portfolio matches how the trademark is used.
A brand owner’s trademark portfolio is a living and ever evolving corporate asset. Obtaining registrations alone is not sufficient. Care must be taken to ensure that the trademarks are properly used, licensed and enforced in order to ensure that the brand owner maintains its rights to the trademark. Canadian trademark laws enable 3rd parties with legal mechanisms that enable them to invalidate brand owners’ trademark rights, which could be detrimental to their business.
If you would like strategies on how to best maintain and protect your trademark rights, reach out to us at Froese Law.