In a previous post, we explored trademarks. The Canadian Intellectual Property Office (CIPO) defines a trademark as a “sign or combination of signs used or proposed to be used by a person to distinguish their goods or services from those of others.” Perhaps at first the trademarks simply represent the good or services that a business provides; however, over time, trademarks have the potential to carry the reputation of a business. Therefore, they are valuable and worth thinking about if your business doesn’t have one already. 

Note that the term ‘infringement’ is only applied to those who have registered trademarks. However, some individuals opt to not register their trademarks. When perceived ‘infringement’ occurs, the unregistered trademark owner is protected under the common law action of “passing off.” To keep learning about passing off, keep reading below!

What is Passing Off?

So, what exactly does passing off mean? Passing off refers to when an individual introduces its products or services in such a way that the public believes it to come from another source. In general, there are two kinds of passing off:

  1. The plaintiff and defendant are competitors in the same industry.
  2. The defendant promotes its business in such a way that the public believes that it has been endorsed by the plaintiff.

In addition, for an action to be considered as passing off, it must meet the following criteria:

  1. The existence of goodwill or reputation in the trademark;
  2. Deception of the public due to misrepresentation; and
  3. Actual or potential damage to the plaintiff.

Goodwill or Reputation

Goodwill refers to the positive association that draws customers to a product, service, or company as opposed to its competitors.

Deception due to Misrepresentation

Misrepresentation can be established if the plaintiff can prove that the defendant’s product can be confused with its own. The test of confusion begins with one’s first impression. Then, the degree of resemblance is determined based on a series of factors that, depending on the product or service, may include the following:

  • Inherent distinctiveness of the trademarks
  • Extent to which they’ve become known
  • Length of time the trademarks have been in use
  • Nature of the goods, services, or business
  • Nature of the trade
  • Degree of resemblance between the trademarks in appearance, sound, or in the ideas suggested by them

Damages

When assessing a passing off claim, the defendant will be liable for the losses experienced by the plaintiff. However, they must be a direct consequence of the passing off committed by the defendant. Therefore, any loss of business, reputation, goodwill, or trade due to the misrepresentation will be the responsibility of the defendant.

At Sodagar & Co., we help our clients tackle any trademark misrepresentations or breaches whether or not they’re registered. The team understands the importance of trademarks and its impact on the success and reputation of a business. Thus, we take this into consideration when guiding our clients throughout any trademark-related processes.

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