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What are Trademark Rights?

November 19, 2019

Tax Question:

What are trademark rights?


Trademark rights arise from two sources:

  1. common law rights; and
  2. registration rights.


What are “common law” trademark rights?

The actual use of a trademark in commerce creates a priority right to continue to use that mark in association with the goods or services, to the exclusion of others. The rights stemming from the use of a mark are referred to as “common law” rights. However, common law rights are limited to the geographic region where the mark has been used. Unfortunately, these common law rights can be quite difficult and costly to enforce against an infringer. Likewise, common law rights are not much of a deterrent to stop others from using similar branding. Registration of your trademark provides more comprehensive and substantially stronger protection against others using similar branding as yours.

What are trademark registration rights?

A trademark registered in a federal trademark office such as the Canadian Intellectual Property Office (CIPO) or the United States Patent and Trademark Office (USPTO) is afforded rights beyond the common law rights. These statutory rights are of significant and practical benefit to the trademark owner. The filing date of your trademark application establishes priority to your trademark, even if you have not begun to use your trademark. This means that only someone with prior common law rights could claim they have priority to use their mark, and then only within the limited geographic region of use and for the exact goods and services that prior use can be established. Therefore, the first to file for registration of a mark gains a considerable advantage in securing their rights to that trademark (and any similar mark). For this reason, it is critical to start the registration process very early in your marketing plan. The key benefits of registration include:

  • Nationwide protection to use your mark at the exclusion of other similar marks (even without prior use in every region of the country).
  • The right to stop competitors from using confusingly similar marks.
  • Statutory damages against infringers without having to prove actual financial damage.
  • Right to use the circle R symbol (¨).
  • Deters would-be infringers from using similar branding.
  • Enables you to expand throughout the country and expand the product lines associated with your brand without fear of infringing on another’s trademark rights.
  • The assistance of Customs and Border Protection in enforcing your trademark rights against the importation of counterfeit goods.

Registered trademark owners can force anyone else to stop using similar marks in association with similar goods or services. Seeking legal guidance on the selection of your trademarks early in your branding strategy helps avoid having to forfeit a brand that you spent time and money developing. By registering your trademark early in your marketing campaign, you will secure the right to use your brand to the exclusion of competitors.

If you would like more information on this topic, please contact a member of the Empire CPA team by filling out the contact form below.

Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.

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