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Trade-mark Issues for Real Estate Developers

By Neil Melliship                                         December 14, 2006

What would happen if you started earnestly marketing a real estate development and then received a letter from a lawyer demanding that you stop, because the name youíve chosen has already been registered or used as a trademark by one of your competitors? This scenario occurs often enough that you need to be concerned about it. The new projectís name and the related marketing and advertising materials may be clever, creative and appropriate for the project, but they will be of little value if someone else is already using the trademark.

This predicament can normally be avoided by conducting due diligence through comprehensive trade-mark searches before committing to a particular mark for a new project. Developers may overlook the defensive side of trade-mark searches and registrations. They may take the view that a project will have a relatively short marketing life-span and therefore think trade-mark protection is unnecessary. This thinking can lead to unnecessary disputes.

Developers and others involved in the marketing and sales of a real estate project need to appreciate that trade-mark registrations and the clearance process are valuable for more protection than just stopping another company from using that trade-mark. These processes are also a simple way to avoid expensive and time-consuming disputes with competitors.

The federal Trade-marks Act provides that the owner of a registered trade-mark has the exclusive right to use that mark throughout Canada in association with the wares and services that are claimed in registration. This exclusivity extends to confusingly similar trademarks or wares. If a registered mark used to market a commercial development in Toronto is similar to that used to market a residential development in Vancouver, it may be disputed by the Toronto developer.

Without a registration under the Trade-marks Act, the Toronto developer will be left to its common law rights. These rights typically extend only throughout the geographic area where the developer or the project has a reputation and goodwill (translation: if the Toronto project is only advertised and known in Toronto and the mark is not registered, the Vancouver developer may be free to use that mark for a project in Vancouver).

Whatís the solution? Most prior registered marks that are likely to be problematic will turn up in a relatively simple search of the federal Trade-marks Register. A more extensive search of other databases may disclose prior common law uses of a proposed mark. Prior common law use is important to know about because it identifies possible passing off issues (Ďpassing offí is an unauthorized attempt to pass off your product or service with that of another party, or to falsely suggest an association, affiliation or sponsorship). Itís also important because it may affect a developerís ability to register the mark under the Trade-marks Act.

Developers thinking about changing their name or re-branding should also consider trade-mark issues. A company or business name (i.e. the name by which a business is known as opposed to the name of a particular development owned by that business) can also function as a trade-mark. The company or business name will almost always have a much longer shelf life than a trade-mark used for a particular project, and the same clearance and protection measures described above should be conducted. A cautionary tale of what can go wrong when protective measures arenít taken can be found in the Greystone Properties decision of the BC Supreme Court.

Copyright issues are often found in conjunction with trade-mark issues for graphic designs or logos. Developers need to be sure that they either own the rights to the design or that they have a license to use the design on terms that are as unrestrictive as possible. Further, developers need to ensure that the particular design isnít copied from some other design in order to avoid infringement of someone elseís copyright. Assuming ownership is not an issue, itís advisable for developers to protect themselves by registering copyright for any designs - this will allow the developer to take advantage of the statutory presumption of ownership in the event of a dispute.

Readers of this article may be interested to view, on our Canadian Trademark Blog (November 23, 2006 posting), a list of property development trade-marks that are currently registered or applied for in Canada.

For information on trade-mark, copyright and other intellectual property rights and issues, please contact Neil Melliship, Chair of the Technology and IP Group of Clark Wilson LLP Ė direct line 604.643.3154 or npm@cwilson.com

- Neil Melliship    

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