The Importance of a Trademark

By Ellen Muir & Alisha Burney

Trademarks are signs, words or other indicators used by individuals to distinguish goods and services from others [1]. The first known trademark law came into force when King Henry III passed the Bakers Marking Law in 1266, requiring bakers to draw a specific mark on the bread they sold to avoid fraud [2]. Since then, trademark laws have developed and changed as property and society have grown more complex. Today, trademarks are integral to creating and protecting individual brands. A brand is a business's image and reputation as its customers recognize it [3]. A trademark allows businesses to build brand recognition, connect consumers with their specific identity and reputation, and make informed decisions about the goods and services they are using.

There are two types of trademarks: ordinary marks and certification marks. Ordinary marks can include words, designs, tastes, textures, moving images, modes of packaging, holograms, sounds, scents, 3-dimensional shapes, colours or a combination of these used to distinguish goods or services[4]. In contrast, certification marks are used to identify whether certain goods or services meet a defined standard. They can be licensed to more than one person or company, whereas ordinary marks cannot [5].

Trademarks are important because they distinguish a business's brand from others in the marketplace [7]. A recent case, Subway IP LLC v, Budway, Cannabis & Wellness Store, 2021 FC 583, highlights the importance of choosing a unique and distinct trademark. In this case, the court found BUDWAY's cannabis retailing brand constituted passing off under s 7(b) and the depreciation of goodwill under s 22 of the Trademarks Act, 1985 [8]. The court found that BUDWAY's letters, pronunciation, colour scheme, design, and submarine sandwich mascot were sufficiently similar to SUBWAY to evoke an association between the trademarks [9].

The court ordered an injunction prohibiting the use of BUDWAY as a trademark and the destruction of all materials bearing the trademark [10]. This case demonstrates that Courts may prevent the use of a trademark if it is found to be sufficiently similar to a pre-existing trademark. A business should make its trademark sufficiently unique to avoid potential confusion and conflict with existing trademarks.

While it is possible to protect unregistered trademarks, it is beneficial to register a trademark as it provides brands with many advantages, such as protection across Canada and the ability to block the registration of confusingly similar marks. Registration also allows for proof of ownership which is essential to build brand value and licensing opportunities to maximize the trademark's commercial potential[11]. As Subway IP LLC indicates, creating a unique and distinctive trademark is important to build a reputation in the marketplace. From a legal perspective, the more distinctive a mark, the more likely it will receive registration from the Canadian Intellectual Property Office.

As seen in Loblaws Inc. v. Columbia Insurance Company, 2021 FCA 29, two companies used an acronym "PC" on their products [12]. The defendant, Pampered Chef, had a logo with a spoon between the "P" and "C" compared to Loblaws' PC trademark. The court dismissed this appeal as the spoon design "diminished the degree of resemblance" [13]. This reinforces the importance of creating a unique and distinct trademark to allow for separation in the marketplace and the legal sphere. While there are many different ways to create unique trademarks, "coin" terms are simply words with no dictionary meaning and are readily usable as a trademark. In contrast, a clearly descriptive term will only be registered if it can be shown to hold acquired distinctiveness through use.

These decisions indicate that a business may benefit by registering a unique trademark because it is likely to distinguish and protect its brand in the marketplace.

[1] "Trademarks - Learn the Basics. Protect your brand. Learn why trademarks matter," (December 18, 2020), Canadian Intellectual Property Office; https://ised-isde.canada.ca/site/canadian-intellectual-property-office/en/trademark-learn-basic/trademarks-learn-basics-protect-your-brand-learn-why-trademarks-matter

[2] "The Evolution of Trademarks - From Ancient Egypt to Modern Times," (December 10, 2019), Dennemeyer Group; https://www.mondaq.com/trademark/873224/the-evolution-of-trademarks--from-ancient-egypt-to-modern-times

[3] "What's in a Name?," (June 01, 2015), Canadian Intellectual Property Office; https://ised-isde.canada.ca/site/canadian-intellectual-property-office/en/trademarks/whats-name.

[4] Supra note 1

[5] Ibid.

[7] Ibid.

[8] Trademarks Act, R.S.C., 1985, c. T-13

https://laws-lois.justice.gc.ca/eng/acts/T-13/

[9] "2021 Year in Review: Key Trademark Cases in Canada," (January 18, 2022), Keri S J., MacKendrick S R., and Robbins M L.; (https://www.bereskinparr.com/doc/2021-year-in-review-key-trademark-cases-in-canada

[10] Ibid.

[11] https://ised-isde.canada.ca/site/canadian-intellectual-property-office/en/trademarks/whats-name

[12] "2021 Year in Review: Key Trademark Cases in Canada," (January 18, 2022), Keri S J., MacKendrick S R., and Robbins M L.; https://www.bereskinparr.com/doc/2021-year-in-review-key-trademark-cases-in-canada

[13] Ibid.