Q: I am the regional manager for a relatively small implement manufacturer. I recently discovered that a competitor was producing a machine similar to ours, using a name and logo that was almost identical. I think they’re trying to “cash in” on our invention. Can we do something about this?
A: There are two potential legal issues here. One has to do with your implement’s design. Is it patented? If so, is the design and function of the competitor’s unit so similar that it infringes on your patent rights? If the answer to these two questions is “yes” then you may have a breach of patent claim.
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A patent is a deal with the government and the public. In exchange for disclosing your technology and explaining how your invention works, you get a monopoly to manufacture and sell that item for a set period of time. No one else can make or sell the item without your consent. If they don’t have your consent, you can sue.
Even if your invention or technology is not patented or patentable, you may have legal recourse against your competitor. This is based on the fact that he is using a brand name and logo similar to yours. If this brand or logo amounts to your trademark, then you have the ability to enforce your intellectual property rights.
Marks have two purposes. One is often emphasized in the media and to the public. You are entitled to protect your marketing efforts through the use of a trademark, a name and symbol that readily identify your goods to the public. Kleenex is an example of a mark so widely known that the product itself is called by that name even if it has been manufactured by someone else. Think of John Deere with its leaping deer on a green background. Its machines are instantly identifiable. This allows a manufacturer certain advantages within the marketplace.
The second purpose, often forgotten, is one of consumer protection. The use of a trademark gives a consumer comfort that he is buying a product made by a particular person and of a certain kind and quality. The law prevents others from infringing on this reputation through use of the trademark.
For example, Heinz ketchup is widely known to be of a certain taste and high health quality standards. The law prevents me from brewing up some ketchup in my bathtub, slapping the Heinz label on it and selling my substandard product as if it was Heinz’s product. In this way members of the public, as buyers, are protected against unscrupulous sellers.
If a competitor is using your name or logo, you can sue to prevent this. Your best scenario is if you have actually registered your mark with the federal government. The federal Trade Marks Act gives you certain rights and protections. However, those rights are in addition to and not in substitution for your rights that have developed under the common law, over hundreds of years. So even if you’re not registered, you may be able to sue to protect your position.
One basis of doing so is called a suit for “passing off.” This is where some competitor uses your identifying material to pass off his products as yours. One major test is whether its use of your name or logo will result in confusion among consumers in the marketplace. If so, you have a good chance at obtaining redress against the competitor.
The remedies you can get vary. Often an injunction is obtained. This is a court order that prohibits the other side from engaging in this conduct in the future. Also, you can ask for an accounting so the competitor has to open its books to you and show what profits it has made as a result of infringing on your trademark. You can then claim damages or compensation in this amount.
Finally, like most intellectual property matters, there is an element of use it or lose it with trademarks. If you do not actively protect your mark, it can be weakened to the point where you can no longer claim exclusive use of it. This means you have a duty to chase anyone who is infringing on your mark if you want to keep it strong.
Rick Danyliuk is a practising lawyer in Saskatoon with McDougall Gauley LLP. He also has experience in teaching and writing about legal issues. His columns are intended as general advice only. Individuals are encouraged to seek other opinions and/or personal counsel when dealing with legal matters.
