Moogsi / Wikipedia

Many websites use numerous brand names to compare pricing of each company’s products. Issues may arise when such ‘price-comparison’ websites are using other companies’ trademark names or designs.

How is a trademark protected?

A trademark is a registered word name or design that is legally owned by a business entity or an individual. An individual or business can register a trademark through a jurisdiction’s intellectual property office. The receipt of approval for a trademark from an intellectual property office, such as the Canadian Intellectual Property Office (CIPO), means that any other third party that tries to use the trademark by either:

(i) displaying it as its own trademark;

(ii) depreciating the value of goodwill attributed with the trademark (s. 22 of the Trademarks Act); or

(iii) providing false or misleading advertising

will be infringing upon the intellectual property of the registered trademark owner.

A website using another company’s trademark word names or design may be liable for intellectual property infringement based on the last two breaches mentioned above.

Depreciating the value of goodwill

A website using a registered trademark in a negative light may be in breach of intellectual property laws which prohibit depreciating the goodwill of a brand. A brand’s goodwill can be decreased by providing negative comparisons to detract customers away from the brand (for example, implying higher prices of a certain brand, or implying that low prices equals low quality).

In Future Shop Ltd. v. A.& B. Sound Ltd. (1994) (BCSC) both parties accused one another of misleading comparative advertising. The BC Supreme Court judge stated comparative pricing strategies that compare similarities between trademarked competition is more likely to contravene s. 22 of the Trademark Act compared to comparative advertising displaying the differences between trademarked competition.

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Walter Lim / Flickr

False and Misleading Advertising

Section 7(a) of the Trademarks Act prohibits any person from making a “false or misleading statement tending to discredit the business, goods or services of a competitor.” Furthermore, Section 52(1) of the Competition Act prohibits a party from “knowingly or recklessly make a representation to the public that is false or misleading in a material respect.” Price comparison companies that use other trademark names or designs must be careful to ensure that they are not misleading customers with respect to the information they provide on behalf of those marks.

Conclusion

Price comparison websites may be permitted to use trademark names or design of a third party company without claiming ownership of the mark, provided that they do not decrease the goodwill of the mark or provide false or misleading advertising of the mark.

To see examples of a variety of standard contracts, visit our Small Business Law Library!

 

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