The Downsides to Having An Unregistered Trademark

Businesses are often faced with the decision of whether they should register their trademarks or leave them unregistered. In some cases, it is best to keep the trademark unregistered, especially if it is not of direct economic relevance to your business. But, if a protected trademark can have a positive impact on yearly sales or provide intrinsic value to a business, registration may be the best course of action.

Both choices have their own set of advantages and disadvantages. Consulting with a trademark agent or lawyer before you apply for trademark registration may be beneficial.

To help you gain some perspective, here are a few downsides of having an unregistered trademark in Canada:

Proving the Mark’s Validity

One of the major pitfalls of not having your trademark registered is that in the event of litigation, you (the owner) will have to prove that there is goodwill and reputation attached to your unregistered trademark that is used to sell goods or offer services. You will also have to show that the mark has a reputation to the extent that it signifies the distinctiveness of the trademark. In other words, you must show that the public can easily identify or connect the mark with the related goods or services. Sufficient goodwill and reputation attached to the mark is a prerequisite for unregistered trademarks in Canada to seek protection under Common law.

Change of Governing Law

As mentioned above, unregistered trademarks in Canada are protected by the Common law, whereas registered trademarks come under the purview of the Trade-marks Act in Canada. There are certain specified rights that registered trademarks have that are set out in the Trade-marks Act. With these rights you have a stronger foothold over your trademark and can protect it from being infringed. This is not the case with unregistered trademarks in Canada.

Burden of Proof

The owner of an unregistered trademark has to bear the brunt of not having legal evidence of ownership for their intellectual property. So, the burden of proof falls on the owner when the ownership of the trademark is challenged. And, the legal process involved can be time consuming and costly. With a registered trademark, you do not have to bear the burden of proving your ownership of the trademark. This is by far the biggest difference between registered and unregistered trademarks in Canada.

Costly Litigation

Making the decision to not register your trademark may seem like a big-save for your business, but in the long run this might not be a smart move. This depends solely on the nature of your trademark. The reason why unregistered trademarks can be costly and time consuming is because of lack of legal ownership. Initiating a legal action against infringement can cost you a fortune because of the lack of proof of ownership. If there is the possibility that your trademark could attract infingers, obtaining a registration may be a wise option over leaving it unregistered.

These were some of the downsides to having an unregistered trademark in Canada. If you wish to seek advice on trademark registration to safeguard your intellectual property, don’t hesitate to get in touch with our team.