The topic of "trademark bullying" has generated a lot of interest in recent times. Internet sites that draw attention to purported "trademark bullies" and sites that claim to help the "bullied" are prevalent.
Typing the term "trademark bully" into a search engine returns links to articles such as "The 10 Biggest Brand Bullies in the United States," and the like. Websites purporting to "expose" and "shame" trademark bullies abound. A brief survey of these links suggests that, not surprisingly, those branded as "trademark bullies" tend to be large corporations that aggressively assert their trademark rights against smaller entities. Trademark assertions or complaints are not new and in fact can be necessary for an entity of any size, including a large corporation, to preserve its trademark rights. What is new, however, is how the internet has affected the manner in which parties on the receiving end of trademark complaints react.
A trademark serves to identify to consumers the source of products or services in association with which the trademark is used. A trademark is considered "distinctive" if it distinguishes the products or services in association with which it is used by its owner from those of others. The owner of a registered trademark has the exclusive right to the use of the trademark throughout Canada in association with the products or services listed in the registration.
Once obtained, a trademark registration is not, however, unassailable. The Trademarks Act provides a number of grounds upon which a trademark registration may be attacked. One such ground is that the trademark lacks distinctiveness. A trademark could lose distinctiveness if, for example, unauthorized parties begin using either the registered trademark or a confusing mark or trade name in such a way that the trademark no longer distinguishes the products or services of its owner from those of the unauthorized users.
Furthermore, the Canadian Trademarks Act establishes a right of action against a person who uses a registered trademark "in a manner that is likely to have the effect of depreciating the value of the goodwill attaching thereto." Unauthorized use of a registered trademark, or of a mark or trade name that is confusing with a registered trademark, is a classic scenario that could result in depreciation of goodwill or good reputation associated with the trademark.
Therefore, in order to preserve the distinctiveness of a trademark and also to prevent depreciation of the associated goodwill, an owner is well served to be vigilant in attempting to stop unauthorized uses of its trademark and of confusing marks or trade names.
It has long been the practice that an initial step following the discovery by a trademark owner of an unauthorized use of its trademark or a confusing mark or trade name is to dispatch a cease & desist ("C&D") letter to the offending party. A typical C&D letter notifies the offending party of the trademark owner's rights and demands that the offending party cease using the objectionable mark or trade name.
Until recently, the recipient of a C&D letter had little recourse but to comply with the letter or engage a lawyer. Now, easy access to the internet has provided a new way for recipients of C&D letters, especially small entities, to band together and fight back. Some recipients of C&D letters have even posted copies of the letters on blogs and other social media sites, presumably in an attempt to obtain advice, draw attention to, and embarrass the trademark owners.
Public interest law groups have taken note and are collaborating to provide legal resources to help small entities deal with trademark complaints. For example, the www.chillingeffects.org website ("Chilling Effects"), a joint initiative by the Electronic Frontier Foundation and a number of U.S. law school clinics, provides such legal information as "Frequently Asked Questions (and Answers) about Trademark – What to Expect When You're Expecting to Be Sued for Trademark Infringement." Interestingly, Chilling Effects is compiling a searchable database of C&D notices and is inviting members of the public to submit copies of C&D notices. In return, Chilling Effects "will respond by linking the legalese in the letters to FAQs that explain the allegations in plain English."
It is unclear whether trademark owners have in fact become more aggressive in asserting their rights or whether it is simply the case that more attention has been drawn to the issue as a result of social media sites and online initiatives such as the Chilling Effects website. In either case, the internet has provided purported infringers with a new tool for resisting allegations made against them. It is therefore a good idea to keep the following in mind. While C&D letters are often drafted by trademark counsel, a complaining party should be comfortable with the tone of the letter since a copy of the letter could very well end up on the internet. Positions taken by trademark counsel have the potential to reflect directly on the trademark owner. Conversely, as a recipient of a C&D letter, the internet can be a good starting point for assessing how aggressive or litigious the complaining party has been in the past.
Of course, it bears mentioning that while websites such as Chilling Effects can be a useful resource, they cannot substitute for the advice of qualified trademark counsel.
Cheryl M. Ng, Toronto
The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.