Passing Off Under the Trademarks Act

The Codification

The Act contains a statutory codification of the tort of passing off. The subsections provide that no person shall:

7(b) direct public attention to his goods, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his goods, services or business, and the goods, services or business of another;

7(c) pass off other goods or services as and for those ordered or requested.

It has been said that paragraph 7(b) of the Act is a codification of the common law of passing-off, and there are no longer any “significant differences” between the Act and the common law.

The Elements to be Shown

To succeed with a claim under subsection 7(b) a plaintiff must show a) the existence of goodwill, b) confusion due to a misrepresentation and c) damage linked to a valid and enforceable trademark that the plaintiff possesses.

Directing public attention to goods, services or a business in such a way as to cause or be likely to cause confusion appears to equate, in general terms, to the deception of the public due to a misrepresentation.

The Federal Court of Appeal has said that to obtain trademark rights a trademark must be “used” as required by the Act, including compliance with section 4 of the Act. This is essential.

 Goodwill

In assessing whether goodwill exists a court should consider factors such as the degree of recognition of the mark within the relevant universe of consumers, the volume of sales and the depth of market penetration of products associated with the claimant’s mark, the extent and duration of advertising and publicity accorded the claimant’s mark, the geographic reach of the claimant’s mark, its degree of inherent or acquired distinctiveness, whether products associated with the claimant’s mark are confined to a narrow or specialized channel of trade, or move in multiple channels, and the extent to which the mark is identified with a particular quality. For an applicant to succeed it must establish that its trademark is distinctive. The plaintiff’s rights are territorial in nature. 

Confusion

The test for the confusion analysis where there is no intentional deception, is whether there is a likelihood of confusion between the marks at issue under subsection 6(5) of the Act. Where the mark includes a family name, it is necessary to consider whether the defendant activities were intended to increase the risk of confusion – to drive business to the defendant.

Under section 7(b) of the Act, there is no requirement that the plaintiff and defendant be competitors, confusion alone is sufficient.

Damage 

There is an obligation on the plaintiff to show that it has suffered damage.

Constitutional Validity

Subsection 7(b) has been found to be constitutionally valid federal legislation by the Federal Court of Appeal, in that it is said to round out the regulatory scheme prescribed by parliament in the exercise of its legislative power in relation to patents, copyrights, trademarks and trade names. Subsection 7(c) should be treated in the same fashion as subsection 7(b). In an action brought in the Federal Court under section 7 of the Act the misrepresentation must be in relation to a registered or unregistered trademark. The Court only has jurisdiction when this occurs.

To safeguard your brand and ensure your rights are fully protected, reach out to us for a detailed review of your trademark use and potential remedies. 

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If you have questions, please contact me at  jmckeown@LN.Law

John McKeown

Loopstra Nixon LLP.  

130 Adelaide St W Suite 2800Toronto, Ontario, M5H 3P5Canada

 jmckeown@LN.Law

437 290-5960

This article is of general nature and is not intended to provide specific legal advice as individual situations will differ. Specialist advice should be sought about your specific circumstances. Copyright ©  John Mckeown, All rights reserved. To unsubscribe to the IP Update, please send me an email at jmckeown@Ln.Law