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LEGAL CONSIDERATIONS IN EXPORTING:
CHOOSING A TRADE-MARK AND PROTECTING THE RIGHTS

By Isabelle Deshaies

Exporting businesses must take into consideration the trade-mark their product is bearing, and this must be done very early in the exporting plan. Choosing the right mark, the right language, having its trademark rights secured and planning the right budget are the things to think of.

CHOOSING THE RIGHT MARK

Availability
To ensure that the chosen mark is available in all countries, including Canada, availability searches must be performed. If the mark is not available in one or several countries, it becomes a marketing decision to change the mark for all the countries or only for the ones in which the mark is unavailable. The availability search should be performed by a registered trademark agent, the professional known to have the required knowledge to analyse and evaluate the availability of the mark according to the applicable law. 1

Registrability
To be considered as a trademark and used as such, the mark is subject to criteria such as not being a name or surname, not being descriptive, etc. or not otherwise be prohibited according to the country’s law. For example, a scandalous word is not registrable as a trademark. However, a word may or may not be considered scandalous, depending the country in which it is to be used. Therefore, the country, culture and language must be considered when a trademark is to be used worldwide. This must also be taken into consideration at the time of adoption of the trademark. Here again, the trademark agent is the best qualified professional to guide the exporter on the registrability of a trademark according to the applicable law.

Linguistic considerations
It is vital to consider in which language the mark will be used in each country. The exporter may see a commercial advantage in exporting his mark in its original language, while there might be a better commercial impact to adopt the local transcript in some countries. Therefore, double checking availability of the mark in both languages, and registering it in both languages, may be advisable.

RECOGNITION OF TRADEMARK RIGHTS

The owner of a registered trademark is recognised to be the owner of same. The certificate of registration is a prima facie evidence of ownership on the mark. This evidence is reputed to be almost incontestable. If someone wishes to challenge the rightful ownership on the mark, proceedings must be undertaken with the Courts. Complexity and costs related to such procedure vary for each country.

Some countries recognize Common Law Rights, i.e. the first user of a trade-mark is the one who owns the rights on it. There must be evidence of prior use to stop the use of the adverse mark. However, it might be more difficult in some countries to have prior rights recognised based on use, where the rights on the mark belong to the first deponent / registered owner.

Although unlawful ownership on a trademark may be challenged before the Courts, the costs and the delays are often dissuasive and rightful owners will rather choose to change their mark.

These are good reasons to begin the registration proceedings after the searches have been performed, but before marketing the mark and starting negotiations with business partners. 2 Advertising the mark during commercial missions and international expositions is also risky if the registration proceedings have not yet begun.

REGISTRATION PROCEEDINGS

Registration proceedings are similar in every country. Essentially, the first to file is the first to be eligible to register the mark unless registration is opposed at the advertisement stage. After the application form is filed, it is examined, advertised, allowed and finally registered. The time frame varies according to each country. 3

Registration of the mark may be refused at the examination stage or further to an opposition after advertisement. Furthermore, registration of the mark may be expunged if the owner ceases to use it or if it is shown that it was granted on the wrong basis.

BUDGET

An appropriate budget must be planned to search the mark and further secure the rights in each target country. The costs vary depending on the country and on the exchange rate. It is advisable to discuss that question with your trademark agent before the proceedings are engaged in order to ensure that they will mature into registration. Otherwise, stopping the registration process may leave the applicant without any right at all and the money spent may not be recovered.

Where the exporter does not have the entire necessary budget at the beginning of the process, it may be advisable to wait to introduce the product in the country until the registration process may start.

OTHER LEGAL CONSIDERATIONS

All the above is even more important when relationships are to be developed with foreign business partners. Indeed, before the exporter even reveals itself in foreign countries, it should file a trademark application to protect itself and avoid that the mark be stolen further to commercial missions or negotiation with potential business partners. Furthermore, every potential business partner should be clearly advised, in writing, that the trademark is the exporter’s and that he may not attempt to secure same.

Furthermore, where the mark is not registered, ownership on same is not confirmed, which may affect negotiations with potential business partners. Indeed, some of them are well aware of trademark rights and will not put in the market a trademark which is not properly registered. For example, distributors, licensees, franchises and other business partners are likely to be sued, in the same manner as the owner, if the trademark infringes a prior owner’s rights.

Finally, registration of the trademark enables the registered owner to register it with custom registers to limit the transit of wares bearing counterfeit trademarks.

This article does not constitute a legal opinion. Ask your registered trademark agent for more information.

© Isabelle Deshaies
November 2009

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1. Trademark agents have a similar expertise all around the world. In Canada, trademark agents must have acquired a consecutive two year active working experience in trademarks before being allowed to write the qualification exam. Lawyers and notaries who combine the trademark agent title have also acquired a consecutive two year active working experience in trademarks. Starting 2010, lawyers and notaries will need to meet the two obligations of a consecutive two year active working experience and successfully write the trademark agent exam to become registered trademark agents..

2. It is noteworthy that some kinds of trademarks may not be applied for if they have not been previously used, such as distinguishing guises and certification marks.

3. In Canada, it takes between 18 to 24 months from the filing date to obtain registration of the mark. The delay may be longer if formalities or objections are raised or if the mark is opposed.

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