IP Legal Iteration Blog

This is the second article in the trade-mark series. Check out the first article in the series: What's a Trade-mark?

"Passing off" is considered a "tort" in intellectual property and in litigation. It helps protect the proprietary right in a trade-mark. Passing off is both a common law action and a statutory action, which means it protects both unregistered and registered trademarks. A registered trademark has access to both the common law and the statutory right of action, but an unregistered trademark only has access to common law protections.

The common law right of passing off is codified in section 7 of the Trade-marks Act. A reproduction of section 7 is below:

7 No person shall

  • (a) make a false or misleading statement tending to discredit the business, goods or services of a competitor;

  • (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;

  • (c) pass off other goods or services as and for those ordered or requested; or

  • (d) make use, in association with goods or services, of any description that is false in a material respect and likely to mislead the public as to

  • (i) the character, quality, quantity or composition,

  • (ii) the geographical origin, or

  • (iii) the mode of the manufacture, production or performance of the goods or services.

7(b) refers to the "classic" conception of passing off. Passing off occurs when a person directs public attention to his goods in such as way as to cause confusion between his goods and another goods. For example, I cannot start a business selling shoes with a logo that bears a striking similarity to the Nike Swoosh because it would certainly lead a consumer to think that my shoes were manufactured by Nike.

7(d) is a statutory enactment of the "extended form" of passing off. It protects against misrepresentations as to the innate qualities of the wares or services. An example of this would be that certain wines or spirits can be only labeled as such (Bordeaux, Scotch Whiskey) if they originated from a specific geographical origin. I cannot market my brand of wine as "Bordeaux wine" if it's manufactured in Calgary.

The common law passing off action has three general elements: the existence of goodwill or proof of reputation, a deception of the public due to the misrepresentation, and damage to the Plaintiff.

The reputation or goodwill must occur within a trade-mark that the public understands as belonging to the business. As a result, the business must have operated long enough in that market, so that it has established some goodwill or reputation. If a start-up develops some type of trade-mark and has not yet developed a reputation within the industry, there may be no goodwill or reputation for that trademark. On the other hand, the Nike Swoosh clearly has goodwill or reputation in its market.

The misrepresentation is a factual question and one must establish that the defendant led the public to believe it had some connection to the plaintiff's goods or services. This factual analysis looks at the market or trade and the type of competition within that market or trade. Intention is not necessary for this element.

The threshold for damages is the plaintiff must establish a likelihood or probability of incurring damage through lost profits or damage to the value of the trade-mark. One does not need to establish actual financial loss.

Passing off is a valuable right of action for both unregistered and registered trademarks, and it must be considered when dealing with trade-mark litigation.

Do you have questions about your unregistered trademark? Has another business used your trade-mark or trade-name without your permission? Contact us today, and we will protect your rights. Andrew Roy Legal offers free 30 minute Zoom consultations. Book with us today.

Updated: Dec 28, 2021

A trade-mark protects a "mark." Not all marks are a trademark and not all trade-marks are registerable under the Trade-marks Act, nor protected under the common law doctrine of passing off. A right in a trade-mark is only acquired through adoption or use and is only maintained through use.

Unlike a patent, which protects products and processes, a trademark relates to the distinctiveness of its marketing. Trademark seeks to indicate the source of a product, so that consumers know what they are buying and from whom.

The Trade-marks Act, which is a federal statue and applies throughout Canada, provides a definition of a trademark:

(a) a mark that is used by a person for the purpose of distinguishing or so as to

distinguish wares or services manufactured, sold, leased, hired or performed by him from

those manufactured, sold, leased, hired or performed by others,

(b) a certification mark,

(c) a distinguishing guise, or

(d) a proposed trade mark.

Let's focus on the first definition as it is the most common one. A trademark must be a mark and it must be used to distinguish one's wares from those of another. While Canadian case law has provided a comprehensive discussion of "mark" and "distinguishing," we will provide a more concise explanation. A "mark" must be something that is represented visually. It can be associated both with products and with services. A trade-mark is some type of visual mark that a person uses in a public situation to identify his goods that he makes for sale in such a market (or services performed by him). The owner of the marks must use the trademark for distinguishing his wares or services from those of others, or, if the owner is not using the trademark to distinguish his wares, that marks does and in fact actually distinguish his wares.

We can apply this legalistic definition to a common situation. The Nike Swoosh is a registered trademark. It's a visual mark, located on all Nike products, and it distinguishes a Nike shoe from that of another brand (say, Adidas). In this situation, it does not matter whether Nike developed the Swoosh specifically to distinguish it from other brands. The mere fact that it so clearly does distinguish itself from other brands is enough to classify the Swoosh as a trademark.

When a consumer goes to a sports store, he sees the Swoosh on a pair of shoes. He does not need to independently verify the manufacturer or the quality of the shoe. He knows, based solely on that mark, that Nike manufactures the shoe. For Nike, that Swoosh is often enough to have a consumer purchase their product. One can imagine the value associated with that simple design!

Are you a business owner or content creator that may have a trade-mark, but has not registered it yet? Contact us today, and we can help you protect it!

Are you a business owner or content creator that has either a registered or unregistered trade-mark, and another individual or corporation is using your trade-mark without your consent? Contact us today, and we will help fight for you!

Updated: Dec 28, 2021

Andrew Roy, who owns and operates IP Legal Iteration, is both a legal research professional and a lawyer. This unique skill set has allowed him to develop an efficient, practical, and complex understanding of what types of information people need. He has read and digested numerous texts on intellectual property, technology law, and civil litigation and has identified what concepts and areas need discussion.

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