Trade-marks
| Author | David Vaver |
| Profession | Professor of Law. Osgoode Hall Law School, York University |
| Pages | 173-236 |
CHAPTER
TRADE-MARKS
Trade-marks and trade-names are protected both at common law and
under the Trade-marks
Act.[
This chapter focuses on trade-mark protec-
tion under the Act, but also mentions available common law protection.
A. INTRODUCTION
Lrade-marks are commonly classified as intellectual property, but there
is nothing intellectual about them at all. Despite the blandishments of
Madison Avenue and its Canadian counterparts, the law does not treat
trade-mark production as intellectual. A mark may be a prosaic word or
device. It may be thought of independently, or it may be someone else's
idea. None of this matters. Nor do any rights to a mark flow from mere
creation: the EXXON trade-mark was denied a copyright despite the
enormous time and money proved to have been spent in selecting and
securing it worldwide.2 Only use or its surrogates — public recognition
or an intention to use — create rights, and then not in the creator but
in the person behind the use, intent, or creation of public recognition.
Of course, later creativity may give rise to other rights — making a fancy
R.S.C. 1985, c.
T-13
[T
Act], including the Trade-mark Regulations, 1995,
SOR/96-
195
[TRl;
in this chapter it
is
called the
"Act."
Exxon Corp. v. Exxon Insurance Consultants International Ltd. (1981),
[1982]
Ch.
119 (C.A.). See section C(l), "Originality,"
in
chapter
2
173
174 INTELLECTUAL PROPERTY LAW
design involving the word or producing a television commercial featur-
ing it may attract copyright — but this is a separate issue.
Those uncomfortable with the "intellectual" epithet sometimes more
aptly call these assets industrial property. This term signals their essen-
tially commercial and profit-making character. But the property part of
industrial property can still seriously mislead. True, trade-marks may be
sold or licensed, pass in bankruptcy, or be "interests" under bulk sales
laws;
even innocent infringers can be enjoined. But they are not property
in the full legal sense. An "owner" does not and should not have the right
to exclude others from all or even most uses. The EXXON mark owner
cannot stop the use of the word in this book or in other media. It cannot
stop Shell saying its products are "cheaper than
EXXON"
(if they are). Nor
has this property the stability associated with other property rights.
Indeed, it is precisely when an owner starts treating its trade-marks as its
property that it runs into trouble. Rights in EXXON may in law disappear
if the mark is unused, if it is licensed without its owner controlling what
products it is marked on, if it changes in character (e.g., from a manufac-
turer's mark to a distributor's mark), or if it becomes generic (perhaps
"an exxon" to signify a massive marine pollution disaster?).3
Descriptively, therefore, trade-marks are not fully property; at com-
mon law, they cannot be saved from misappropriation or the ravages of
some amorphous unfair competition. This has been a deliberate policy
choice. The Supreme Court, for one, has cautioned against curtailing
the "perceived benefits to the community from free and fair competi-
tion" by expanding the common law (particularly the passing-off
action) beyond the protection of "the community from the consequen-
tial damage of unfair competition or . . . [trade]." But "unfair competi-
tion or trade" was no catch-all for any activity a judge thought distaste-
ful:
only misrepresentations that would likely cause public deception or
confusion were covered.4 Yet "misappropriation" and "unfair competi-
tion" continually crop up as magic solvents in legal and judicial dis-
course, whatever the Supreme Court says. Some judges have distin-
guished common law policy from that of the Trade-marks Act: the latter
is there precisely "to prevent unfair competition and the misappropria-
tion of intellectual property."5 From this incantation it is seen as no leap
3 See section B(2)(b), "Distinctiveness," in this chapter.
4
Consumer's
Distributing
Co.
v. Seiko Time
Canada
Ltd.,
(1981),
34 O.R. (2d) 481 (C.A.) [Seiko],
5 Lin
Trading
Co.
v. CBM
Kabushiki
Kaisha,
[1987]
2
FC.
352 at 357 (T.D.), aff'd on
other grounds (1988),
[1989]
1 FC. 620 (C.A.)
[Lin].
Trade-marks 175
whatsoever to ban the parallel import of genuinely branded goods,6 an
activity the Supreme Court previously legitimated at common law7 and
one that the Trade-marks Act does not expressly prohibit.8
In fact, the Trade-marks Act does not, any more than the common
law, set out "to prevent unfair competition and the misappropriation of
intellectual property." The one explicit provision in the Act that did that
was ruled unconstitutional by the Supreme Court in
1976.9
Instead, the
Act presupposes that effective national trade and commerce based largely
on private enterprise depends on the regulation of a number of specific
practices. Just as competition itself requires the balancing of interests
between and among competitors and the public, so does an Act that reg-
ulates defined practices relating to branding. The Supreme Court said all
this a half century ago when speaking of the Act's predecessor (then
grandly called the Unfair Competition Act). General Motors complained
that another firm was using FROZENAIRE for the refrigerator it was selling
and that buyers would confuse this brand of product for GM's
FRIGID-
AIRE.
The Court said that "in fixing the limits of legislative protection the
courts must balance the conflicting interests and avoid placing legitimate
competition at an undue disadvantage in relation to language that is
common to all."10 GM's attempts to warn off the entire refrigerator trade
from using any mark with a similar connotation to FRIGIDA1RE were also
pointedly rebuffed: GM evidently "deems itself to have the equivalent of
a copyright in the word mark and in each component; but that is not so;
the trade mark monopoly is to protect the business of . . . [General
Motors],
not a proprietorship of the word
itself.""
The same approach applies to today's Trade-marks Act, enacted just
four years after the FRIGIDAIRE decision. The question, "What kind and
degree of protection should be extended in this situation?" is not
answered by overblown sentiments about "unfair competition" and
misappropriation of "intellectual property." Protection both at common
law and under the Trade-marks Act requires a careful balancing of
com-
6 Mattel Canada Ltd. v. GTS Acquisitions Ltd. (1989), [1990] 1 EC. 462 (T.D.)
[Mattel],
disapproved in Smith
&
Nephew Inc.
v.
Glen Oak Inc. (1996), 68 C.RR.
(3d) 153 (Fed. C.A.) [Smith & Nephew].
7 Seiko, above note 4.
8 This tendency was recently partly checked in Smith
&
Nephew,
above note 6,
denying the power of a registered trade-mark owner or licensee to halt parallel
imports. See section G(2), "Imports," in this chapter.
9
MacDonaldv.
T
Act,
above note 1.
10 General Motors Corp. v. Bellows, [1949]
S.C.R.
678 at 688
[Bellows].
11
Ibid,
at
689.
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