CharityVillage® Research: Be proactive to protect your trade-mark

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Be Proactive To Protect Your Trade Mark
by Terrance S. Carter
October 29, 1997; Canadian FundRaiser
If your charity is setting up local chapters or expanding to other countries, and you want to maintain the ownership and control of your trade-marks, you will have to consider licensing the mark. The same concerns will apply if your trade-mark is being used for a fundraising event conducted on your behalf by others, or if it is designed to be used by other groups as an indication of quality control or attainment of standards.
Ideally, you should have a written agreement covering such situations, in which the license is granted by the trade-mark owner, which also retains at least indirect control over the character, quality and use of the mark. It's also important to remember that any use of the mark by the licensee will be considered by the courts to be use by the owner, which makes it crucial not only that you maintain liability insurance, but also that you have full confidence in the integrity and judgment of the licensee. In fact, no matter how successful your working relationship with the licensee may be, they should be prohibited from assigning, transferring or sub-licensing the trade-mark.
Any public use of your mark by a licensee should include a clear statement that the mark is being used under a licensing agreement, and you should set up and monitor standards for its use. Among other things you should prescribe geographic boundaries, define the list of goods and services with which it may be used, and include in the agreement a clause making the licensee liable for any misuse of the mark.
Most good things will end of course, eventually, and your licensing agreement should include both a specific termination date and the right to terminate early if the agreement is breached in any way. The ultimate effect of the termination should be that the licensee ceases all use of the trade-mark and returns everything that has the mark on it, and that both licensor and licensee issue a joint public statement announcing the end of the use of the mark by the licensee.
Marking your mark
Before you have registered your trade-mark, use the ^TM symbol, as in CharityVillage^TM; after registration, switch to CharityVillage®. You should identify both the ownership of the trade-mark, i.e." CharityVillage is a registered trade-mark of CharityVillage Ltd....", and the license arrangement, "... used under license by Canadian FundRaiser." Finally, you should ensure that the markings are used every time the trade-mark is used, whether it is simply on letterhead and envelopes, or in publications, tapes, videos, ads and marketing materials.
Always show your trade-mark in a consistent way, and to distinguish it as much as possible from descriptive or generic words, use distinctive, bold type, and/or capitalization, and put it in a prominent position on your letterhead. Use it as an adjective, rather than as a noun, i.e. "Jello gelatin" or "Xerox copiers" rather than "Escalator", since trade-marks used as nouns will become unenforceable. For the same reason, avoid the use of your mark in the plural form or as a possessive, to eliminate any possible implied conclusion that it is used as a noun.
Aside from ensuring that your trade-mark is properly registered under the Trade-marks Act and elsewhere when appropriate, you should arrange for proper monitoring of other competing marks to identify any infringements as quickly as possible. Be proactive in stopping any infringements, with written notices of infringement, formal letters of complaint, licensing agreements, and when all else fails, litigation.
When it comes to unregistered trade-marks, some protection is available. Under various corporate law statutes you can force someone who is using a name that is confusingly similar to yours to change it, but to do so you will have to complain to the appropriate government department. In addition, if someone successfully registers a competing trade-mark, you can have it expunged if it hasn't been used for three years or if, within five years of its registration, you can prove that you were using your unregistered trade-mark before they began using their mark.
Finally, the saying "Use it or lose it" definitely applies in the case of trade-marks, because any trade-mark not used for three years is subject to expungement under Section 45 of the Trade-marks Act. Even under common law, your trade-mark may be deemed abandoned, with the resulting loss of all trade-mark rights, if it can be proven that not only have you discontinued its use, but also that you intended to abandon the rights.
Nonprofit managers should never lose sight of the fact that trade-mark rights can be acquired or lost without the organization being aware of it. These rights should be recognized as valuable property assets, and charities should become much more proactive in identifying their trade-mark rights and protecting them, ideally by registration.
Terrance Carter is a partner in Wardlaw, Mullin, Carter & Thwaites, 235 Broadway Ave., Orangeville, Ontario L9W 2Z5. Telephone (519) 941-1760, fax (519) 941-3688.