Common-Law (Unregistered) Trademark in Canada

Under the Trademarks Act, a trademark is a sign or combination of signs used or proposed to be used to distinguish a person's goods or services from those of others. A common-law trademark is one that is in use but has not been registered with the Canadian Intellectual Property Office (CIPO). Owners often signal the claim with the ™ symbol.

Rights arise from use, not from filing. A mark is used for goods when it appears on the goods or their packaging, or is otherwise associated with them, when they are sold or delivered in the normal course of trade. It is used for services when it is used or displayed in performing or advertising them. Over time, that use builds goodwill: customers come to recognize the sign as identifying one particular business. The goodwill is what the law protects.

A business name, product name, logo, slogan or distinctive packaging can all work this way. How to turn those rights into a registration is covered in our guide on how to trademark a business name in Canada; this entry explains what an unregistered owner has, and does not have, before that step.

An unregistered owner enforces its rights in two overlapping ways. The first is the common-law tort of passing off. In Ciba-Geigy Canada Ltd. v. Apotex Inc., [1992] 3 S.C.R. 120, the Supreme Court of Canada confirmed its three elements:

1. the existence of goodwill;
2. deception of the public due to a misrepresentation; and
3. actual or potential damage to the plaintiff.

The second is section 7(b) of the Trademarks Act, which prohibits directing public attention to goods, services or a business in a way that causes or is likely to cause confusion in Canada with the goods, services or business of another. In Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65, the Supreme Court treated section 7(b) as essentially a statutory version of passing off that does not depend on registration. A section 7(b) claim can be brought in the Federal Court, which section 55 gives jurisdiction over claims under the Act, or in a provincial superior court; a claim for common-law passing off alone belongs in a provincial superior court, such as the Ontario Superior Court of Justice.

The misrepresentation need not be deliberate; careless imitation can be enough. Remedies include an injunction and damages or an accounting of the defendant's profits.

Goodwill is the hardest element, because it has to be proved with evidence each time. Useful evidence includes the date of first use and continuous use since, sales figures and customer locations, advertising spend and online reach, media coverage and reviews, and instances of actual confusion such as misdirected calls, orders or reviews. Goodwill is also local. A café with a loyal following in Peel Region may have little reputation in Ottawa, and the further a defendant's products are from its own, the harder confusion is to show. A name that merely describes what the business sells is hard to protect without long and extensive use.

Prior use still counts against a later registration. Under section 16, an applicant is not entitled to register a trademark that was confusing, at the earlier of its filing date and its date of first use in Canada, with a trademark or trade name previously used in Canada by someone else, and a prior user can file a statement of opposition within two months after the application is advertised.

Timing matters. Under section 17(2), once a registration is five years old it can no longer be invalidated on the ground of previous use unless the registrant adopted its mark knowing of that use. After that, a good-faith earlier user may be limited to asking the Federal Court, under section 21, to let it keep using its mark in a defined area, with an adequate distinction from the registered mark. Watching the CIPO database for confusing applications is cheap insurance.

Registering a name is not the same as owning a brand. CIPO states that registering a domain name or incorporating a business does not give any trademark rights. A registration under Ontario's Business Names Act records who is carrying on business under a name; it does not make the name exclusive. A NUANS report lists similar corporate names, business names and trademarks so an incorporator can assess risk, but a clean report is not trademark clearance and does not reserve exclusive rights to the name. The same is true whether the company is named or numbered.

What creates rights is using the name as a brand, on signage, packaging, invoices, a website and advertising. Before adopting a name, run a free preliminary screen with Lamba Law's business name search tool, then a full trademark search before investing in the brand.

Unregistered marks are routinely licensed, franchised and sold, and each transaction raises the same question: can the owner prove what it owns?

• Licensing. Under section 50 of the Act, a licensee's use counts as the owner's use only if the owner controls, directly or indirectly, the character or quality of the goods or services. A licence agreement without quality control can weaken the mark's distinctiveness and the owner's claim to it.
• Franchising. Ontario's Arthur Wishart Act (Franchise Disclosure), 2000 defines a franchise partly by reference to goods or services substantially associated with the franchisor's trademark, trade name, logo or other commercial symbol. A system built on an unregistered mark offers franchisees a brand that may be enforceable only where the franchisor can prove goodwill, which prospective franchisees should check.
• Acquisitions. Section 48 makes unregistered trademarks transferable, with or without the goodwill of the business. A buyer's diligence should confirm which entity actually used the mark, whether a founder or holding company claims it, whether others use confusing names, and whether the seller's evidence of use would support a passing off claim or a registration. Gaps are usually closed with assignments, representations and a registration application.

Yasmin Barakat has run Rye Lantern Bakehouse in Oakville since 2019, with a second location in Burlington since 2022. She registered the business name in Ontario and operates through a numbered company, but never applied to register a trademark. Annual sales reached $1.6 million, and the bakery has 18,000 Instagram followers, many in Mississauga.

In 2024 a Toronto company applied to register RYE LANTERN for baked goods and café services, and in 2025 it opened a Rye Lantern Café in Mississauga. Within weeks, Yasmin received misdirected catering orders and reviews meant for the café.

Her lawyer assembled evidence of first use in 2019, sales by postal code, advertising spend and the misdirected messages, and sent a demand letter alleging passing off and a breach of section 7(b). When the application was advertised in 2026, Yasmin filed a statement of opposition within the two-month window, relying on her prior use. Faced with evidence of goodwill reaching into Mississauga and actual confusion, the café rebranded and abandoned its application. Yasmin then filed her own application so that, once it is registered, her rights will extend across Canada rather than only where she could prove a reputation.