Infringement or Passing Off?
Clients often ask me whether it is a good idea to register a trade-mark, since the common law action of passing off is available to them anyways. The answer is absolutely yes.
While passing off is an action available to all individuals or businesses trading in wares or services under a trade-mark (whether registered or not), the additional right of infringement is one of the biggest advantages of registration. Infringement is governed by section 20 of the Trade-Marks Act, and grants the owner of a registered trade-mark the right to sue for an infringing use of an identical or confusing trade-mark merely by its use and display in association with those identical wares and services. The biggest advantage of section 20 is that it does not require proof of damages, as they are deemed to have been caused by the infringing use of the trade-mark.
This is contrary to the right of passing off under the Trade-Marks Act or at common law. The right of passing off is similar to infringement, but applies with two main differences: (1) the subject trade-mark can be identical or similar, registered or non-registered, and (2) the applicant must prove damages or the likelihood of damages linked to the use of the subject trade-mark. The second point is often the most difficult thing to prove in a passing off action, that of actual damage caused by the use of the subject trade-mark. It must be shown that the use of that mark has caused loss of profits, loss of good-will, or some similar type of damage to the owner’s business.
Some other benefits of registration are that infringement governs all of Canada whereas passing off may only be available as a local or geographic right of action. Infringement also bypasses the defenses to passing off of honesty and disavowal, meaning that infringement is more a more powerful tool to stop even those innocent and unknowing users of your registered trade-marks.
Infringement is easier to prove and is an easy right to acquire through registration. The cost of registration also far outweighs the potential cost of developing a case on an accounting for profits and proof of damages.
Contact me today to discuss further.