Passing off

How BC law treats it

To succeed in common law passing off, the claimant must prove three things: goodwill or reputation attached to its name, mark, get-up or trade dress; a misrepresentation by the defendant, intentional or not, that leads or is likely to lead the public to believe the defendant's goods or services are the claimant's or connected with it; and actual or likely damage (Ciba-Geigy Canada Ltd v Apotex Inc, [1992] 3 SCR 120). Registration is not required, which is why passing off is the main remedy for unregistered brands. Statutory passing off is found in the Trademarks Act, RSC 1985, c T-13, s. 7(b) and (c), which prohibits directing public attention to one's goods, services or business in a way likely to cause confusion with another's, and passing off goods or services as those of another. The Supreme Court of Canada confirmed s. 7(b) is valid federal law and that it largely codifies the common law tort (Kirkbi AG v Ritvik Holdings Inc, 2005 SCC 65). Claims can be brought in the BC Supreme Court or the Federal Court. Remedies include an injunction, damages or an accounting of profits, and delivery up of infringing goods. Canada has no general tort of "unfair competition". Tough competition that hurts a rival is lawful unless it fits a recognized cause of action, such as passing off, trademark infringement or depreciation of goodwill, breach of confidence, inducing breach of contract, or the unlawful means tort, which is narrowly defined (A.I. Enterprises Ltd v Bram Enterprises Ltd, 2014 SCC 12). A competitor harmed by false or misleading advertising may also sue for damages under Competition Act, RSC 1985, c C-34, s. 36, for conduct contrary to the criminal provision in s. 52. The BC Business Practices and Consumer Protection Act protects consumers and does not give competitors a cause of action.

What it means for your business

Many BC businesses never register their trademarks, so passing off is often the only tool against a copycat name, logo or packaging. It is harder to prove than registered trademark infringement because the claimant must show goodwill and confusion with evidence, which costs time and money. Registering key marks makes enforcement simpler. Before launching a new brand, businesses should search for existing names in use, not just registered ones, to avoid being sued. Example: A Vancouver bakery has used a distinctive name and pink box design for ten years without registering them. When a new competitor opens nearby with a near-identical name and box, the bakery sues for passing off and seeks an interim injunction.

Risks and common mistakes

Assuming an unregistered brand has no legal protection. Suing for "unfair competition" without pleading a recognized cause of action. Waiting months to act, which weakens an injunction application. Gathering no evidence of reputation or actual customer confusion. Relying on consumer protection law to sue a competitor.