The owner of Vancouver's Salt Tasting Room, which opened in July 2006, waited until May 2009 to file Canadian Trademark Applications for the trademarks SALT and SALT TASTING ROOM in connection with the operation of a restaurant. These trademark applications remain pending and, in the summer of 2010, a restaurant called Salt Wine Bar opened in Toronto.
Despite instances of actual confusion, including Salt Tasting Room receiving resumes and phone calls for reservations intended for the Toronto location, attempts by the owner of Salt Tasting Room to convince the owner of Salt Wine Bar to change its name were quickly dismissed in light of the geographic separation (the "Salt dispute").
In an age of easy travel and increased likelihood of chefs opening restaurants in multiple geographic locations, competing restaurant names have become a greater impediment to the maintenance of distinctiveness in the marketplace and the protection of overall business interests.
Although an unregistered trademark may be enforceable at common law in an action for passing off, had the trademarks SALT and SALT TASTING ROOM been registered, restraining the use of Salt Wine Bar in Toronto would have been significantly easier as a result of the greater protection afforded to registered trademarks under the Canadian Trademarks Act compared to the common law.
In particular, there are several significant advantages available to owners of trademarks that have been registered with the Canadian Trademarks Office. These include:
Exclusive Right. First, and most importantly, registration of a trademark gives the trademark owner the exclusive right to use the mark throughout Canada. This exclusive right is infringed by anyone who uses the same or a confusingly similar trademark or trade name anywhere in Canada.
Without a trademark registration, the only remedy available to the owner of an unregistered trademark against someone who subsequently begins using the same or a confusingly similar trademark or trade name is an action for passing off. To be successful in a passing off action, the owner of the unregistered trademark or trade name must establish that it has a reputation in its mark or name in the same geographic area where the other party is doing business. The owner of a registered mark does not need to establish such a reputation and can simply rely on its registration.
As a result, had SALT and SALT TASTING ROOM been registered trademarks, the owner of Salt Tasting Room, who does business in Vancouver only, may have been successful in convincing the owner of Salt Wine Bar to change its name, despite not having a location in, or an ability to prove that the marks had developed a reputation in Toronto. The owner of Salt Tasting Room could have simply relied upon its exclusive rights obtained through registration and argue that there is a reasonable likelihood of confusion between Salt Tasting Room and Salt Wine Bar, both used in association with restaurant services; the problem raised by the geographical separation between the two restaurants would not have been an issue. In view of the foregoing, it is easy to see how the "exclusive right to use across Canada" obtained by registration under the Canadian Trademarks Act can provide a significant advantage in protecting one's business interests and distinctiveness in the marketplace.
Notice. Second, trademark registration may potentially reduce the chances of infringement or passing off occurring in the first place. Specifically, applications and registered trademarks are recorded in the public records of the Canadian Trademarks Office. They therefore have a greater chance of coming to the attention of any other party who is considering the adoption of a new trademark or trade name and conducts a search of the records of the Canadian Trademarks Office to determine whether the new trademark or trade name has already been adopted by someone else. While not everyone will conduct a search of the records of the Canadian Trademarks Office prior to adopting a new trademark or trade name, the public notice provided by applying for trademark registration may nevertheless dissuade some from adopting a confusingly similar trademark or trade name.
As a result, had the applications to register the SALT and SALT TASTING ROOM trademarks been filed when the restaurant name was first devised, presumably in 2005 or early 2006, they potentially could have come to the attention of the owner of Salt Wine Bar well in advance of selecting Salt Wine Bar as a restaurant name, and this dispute may have been avoided.
Ownership. Third, the owner of a registered trademark is granted a prima facie right of ownership, and as such, it is incumbent on the alleged infringer to assume the burden of proving prior use. In contrast, an action for passing off may lead to a lengthy and expensive legal battle over (i) who actually has the right to use the mark, (ii) whether the defendant has in fact made a "misrepresentation" leading the public to believe that the goods or services are those of, or authorized by, the claimant (whether intentional or not), (iii) whether the claimant's mark has indeed developed a reputation in the geographic area of relevance, and (iv) damages.
Validity. Fourth, the Canadian Trademarks Act affords a registered trademark a presumption of validity. In contrast, in an action for passing off, a claimant is required to prove the existence and extent of the reputation of its unregistered trademark each time an action for passing off is brought forward.
Scope. Finally, Canada is a member of the International Convention for the Protection of Industrial Property, under which registration of a trademark in Canada facilitates the ability to obtain a corresponding registration in other countries adhering to the Convention. The International Convention also provides that, in the event corresponding foreign trademark applications are filed within six months of the date of filing of the Canadian trademark application, the foreign trademark applications will be treated as having been filed on the same day as the corresponding Canadian trademark application.
Unfortunately, such trademark and trade name disputes are not uncommon in the restaurant industry, as few fail to realize that in today's jet-set society, the operation of a restaurant, or any other business for that matter, in a different geographic location can ultimately have a negative impact on a business, and its reputation and goodwill. However, as highlighted by the Salt dispute, a registered trademark can prove to be an unexpectedly valuable business asset for restaurants and other businesses alike. Thus, the Salt dispute not only serves as a cautionary tale about failing to register one's trademark with the Canadian Trademarks Office, or waiting too long to do so, but also as a reminder that trademark registration may be worth its salt.
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