Summary
This article will provide a brief overview of Canada’s trademark litigation procedure including the types of trademarks, causes of action, the choice of forum, the available defences, and potential remedies.
Discussion
In Canada, trademarks either can be registered pursuant to the provisions of the Trademarks Act, or unregistered (also known as common law trademarks) as there is no registration requirement. The common law confers rights to those who use a trademark over a period of time and acquire goodwill or reputation in that trademark. Owners of unregistered trademarks have the burden of proving the validity and scope of their rights against potential infringers. Additionally, common law trademark rights may be only regional in territorial scope, and confusingly similar marks may still be registered.
Alternatively, registration of a trademark provides more certainty in the scope of the rights. Registering trademarks under the Trademarks Act provides the owner exclusive rights to the use of the trademark across Canada in association with the specified goods and services. Moreover, validity is presumed for registered trademarks and, as a result, the initial burden of proof shifts to any opponents.
Section 7 of the Trademarks Act outlines the prohibitions regarding trademarks. Stemming from these prohibitions are at least three common causes of action for trademark litigation: making false or misleading statements discrediting a competitor, directing attention in a manner likely to cause confusion, and passing off. These causes of action can apply to unregistered and registered trademarks.
Section 19 of the Trademarks Act confers on the owner of a registration the exclusive right to the use of the trademark throughout Canada with respect to the goods and services listed in the registration. Section 20 of the Trademarks Act provides a cause of action for owners of registered marks for the selling, distribution, and manufacturing of goods or services in association with either the infringed trademark or a confusingly similar trademark. Furthermore, section 22 of the Trademarks Act provides an additional cause of action for the depreciation of goodwill in a registered trademark.
Once the causes of action have been identified, the next step is to determine in which court the proceeding will take place. The available options are either in the Federal Court or in a provincial/territorial superior court. The Federal Court is generally the preferred forum because it is a court of federal jurisdiction that sits across Canada, whereas superior courts are limited in jurisdiction to their respective province or territory. The majority of IP cases, including trademark proceedings, are heard by the Federal Court because Federal Court judges have experience in IP and because their judgements are enforceable across Canada, which is especially important for injunctions. Additionally, proceedings to expunge a trademark registration can be brought in the Federal Court only.
A proceeding for trademark infringement can be commenced as either an action or an application. An action is a more involved option consisting of detailed pleadings, documentaries and examinations for the discovery stage, and a trial with live witnesses. On the other hand, an application is a more streamlined and less costly alternative. In an application, evidence is presented in written form via affidavits and transcripts from cross-examinations on the affidavits, rather than by live witnesses at trial.
All the trademark infringement causes of action must be proven on a balance of probabilities by the plaintiff/applicant. As a result, a defendant can successfully defend by asserting that the plaintiff has not met the necessary burden of proof or by providing sufficient evidence of their own to show the contrary. A practical and popular example of this method for defence is showing the absence of likelihood of confusion. Another prominent method for defence is to assert that the plaintiff’s trademark is invalid and thus cannot be afforded the protections of a registered trademark or common law rights. Section 18 of the Trademarks Act dictates when a trademark registration is invalid, and it includes that the trademark was not registrable at the date of registration, lack of distinctiveness, abandonment, that the applicant was not the person entitled to secure the registration, and that the applicant filed the application in bad faith.
A successful plaintiff/applicant is generally entitled to an injunction forbidding the defendant from using the trademark. Ancillary to the injunction, the court may also order the delivery or destruction of infringing materials, documents, etc. With respect to monetary remedies, a successful plaintiff may be able to elect between recovering the damages it has suffered and an accounting of the defendant’s profits. The award of damages comes as of right and stems from the losses that the plaintiff sustained from the infringing sales. An accounting of profits, on the other hand, is an equitable remedy and thus it is awarded at the court’s discretion. Lastly, a portion of legal costs are generally awarded to a successful party in trademark litigation.