Charities should protect their trademark asset

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An essential part of every charity, trade-marks can be lost if they are not properly protected. If your organization wants to avoid the possibility of losing its trade-marks or trade-mark rights by default, it must be proactive. In fact, contrary to the belief of many, registration of a corporate name or a business or trade name by itself does not give trade-mark protection.

While trade-mark rights do exist in common law, they should be protected by trade-mark registration under the Trade-marks Act. In addition, charities have access to enhanced protection for their "Official Marks", as "Public Authorities" under the Act. Unfortunately, however, your trade-marks should also be registered separately in each country in which your charity operates.

It is crucial that you use your trade-marks properly, and license them, rather than allowing them to be used by others informally. You should also move quickly to stop even unintentional trade-mark infringements by others, and your staff and board members should be kept well-informed of the importance of the organization's trade-mark rights. Finally, in addition to registering its trade-mark, your charity should register an Internet domain name as soon as possible, using its trade-mark as part of the domain name.

Basic nature of a charity trade-mark

Any mark used to distinguish wares or services manufactured, sold, leased, hired or performed is a trade-mark. It identifies the source of goods and services associated with a particular mark on a commercial basis, and represents the goodwill of a business - or charity. It can be a single word, such as "Lego"; a combination of words, such as "Foster Parents Plan"; a logo or symbol, such as McDonalds' big "M"; a slogan - "You deserve a break today", "The pause that refreshes"; a package or container design, such as the Coca-Cola bottle; or even a telephone number - "967-1111".

Many elements of a charity's name or identification may become a trade-mark. The ABC Relief Agency of Canada, for example, could trade-mark its entire name; part of it, such as the ABC Relief Agency or simply ABC Relief; a division, such as the ABC Children's Club; its logo; its crest; or even its slogan, "Here's life".

There's no question that a great deal can hang on the question of trade-mark ownership. Trade-marks in fact represent the good will of a charity by becoming the focal point for its overall reputation, for donations from regular supporters and estate gifts, and for its future expansion. They distinguish one charity from another - an especially important factor in fields such as AIDS, cancer, and diabetes in which many charities are operating - and, on the other hand, can help identify the relationship of associated charities.

Fragile, valuable assets that can be lost

Trade-marks can affect the present and future success of marketing efforts involving books, tapes, videos, television shows and the Internet, and have licensing value in other countries and/or with local or associated charities and other partners. As fragile and valuable assets that can be lost or seriously eroded by both acts of commission and omission, they must be properly registered and used to enhance and protect, rather than diminish, their worth to the organization and all of its stakeholders.

While a trade-mark and a trade name may be one and the same, they are often different. The trade name is the name under which a business operates, and can only be registered under the Trade-marks Act if it is also a trade-mark. Trade names are registered as corporate or business names solely for public information purposes, and not for trade-mark protection, but even the use of the name without registration gives some limited protection. For example, an unregistered trade name that is in use can be used under some circumstances to stop someone from registering or using a trade-mark that is too similar.

Trade-marks are neither copyrights, the sole right to reproduce an original work of art, music, drama, literature, photography, software, etc., nor patent rights, a statutory protection given an inventor to make, use and sell an invention they have created. They also exclude registered industrial designs, which are limited to the ornamental appearance of an article, and which provide their owner with the exclusive right to apply the design to an article of manufacture for up to ten years. Finally, they do not apply to either trade secrets, such as the formula for Coca-Cola, or registered topography, the three-dimensional design of integrated circuits, or microchips.

Protect your legitimate trade-mark rights

If your trade-mark can be easily confused with pre-existing trade-marks or trade names, if you effectively abandon it through lack of use, if you fail to control its licensing carefully, or if you use it inconsistently, its value can and will be diluted. Similar corporate or charity names, similar logos and similar Internet domain names can erode the distinctiveness of unprotected trade-names, and even cause confusion in the naming of estate beneficiaries. The worst-case scenario, in the case of inadequate protection, can be the loss of legitimate trade-mark rights as a result of a trade-mark registration by others.

So, aside from the cost of trade-mark registration, what protection is available for Canadian charities? Common law provides some protection to restrain a competitor from passing off its goods or services under the trade-mark of another, even without registration of the mark. Without registration, however, these common law rights are more difficult, time-consuming and expensive to establish and maintain in court. Registration, on the other hand, establishes legal title and validity of the mark, a required pre-condition for enforcement, and expands its range of application from local (in common law) to national.

Once registered, your trade-mark gives you exclusive rights to its use for 15 years, and is renewable indefinitely. It will appear in trade-mark searches and deter others from using it, and after five years, can become incontestable. Your domain name will be harder to challenge (as long as the trade-mark registration is identical to the second-level domain name), and speeds and facilitates registration in other trade-mark Convention countries.

In our next issue, we will cover acquisition of trade-mark rights, barriers to registration, selection of trade-marks and the value of searches.

Terrance Carter is a partner in Wardlaw, Mullin, Carter & Thwaites, 235 Broadway Ave., Orangeville, Ontario L9W 2Z5. Telephone (519) 941-1760, fax (519) 941-3688.

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