Avoiding False-Marking Claims With Global Brands

For about a week last month, my Internet browser thought I was in Canada. And, like a friend who returns with an accent after a week-long vacation in London, this was more a source of curiosity than frustration. I first realized the quirk upon a visit to Google. Instead of finding myself at the familiar .com, I was redirected to a .ca site. Upon entering my query – “donuts” – Canadian Google thought I’d be most interested in visiting Tim Hortons. Eh? Unfamiliar, I scanned the Tim Hortons website to learn the tale of a small Ontario donut shop that quickly spread throughout Canada and much of the Northern United States. With ®s and ™s littered across the page, the intellectual property nerd in me was buzzing. How was I to interpret these symbols?

Generally, the purpose of a trademark notice symbol is to notify the public that the words or designs they accompany should be interpreted as identifiers of the source of particular goods or services. More specifically, the ® signals that a mark is registered, and the ™ (or its service mark counterpart, SM) signals a more general (e.g., common law) claim to a mark. In an infringement suit, a successful plaintiff may only recover lost profits if the plaintiff can show that the infringer had actual notice of the existence of a prior trademark registration, and is typically only rewarded an injunction. However, a trademark registrant who consistently posts the ® alongside the relevant mark is deemed to have provided constructive notice of registration, and is therefore relieved of the burden of having to establish actual notice. This effectively increases the damages available to registrants in an infringement suit. On the other side of the coin, false marking — i.e., improperly using the ® to signal that an unregistered mark is registered — is tantamount to fraud and can open the “false marker” up to civil, and sometimes even criminal, liabilities. For example, in Japan, false marking can be penalized with up to three years’ imprisonment. While often not enforced, false marking is to be avoided. Thus, properly marking trademarks is fundamental to smart trademark practice, as it not only increases the potential damages available in the event of infringement, but it also prevents liabilities for false marking. But how did all of this apply to Tim Hortons, whose donut empire straddles borders and whose website is globally accessible? What was “proper marking” in this context? To the credit of Tim Hortons, and its clearly vigilant trademark counsel, my quick search of the Canadian and U.S. trademark databases revealed that all of the marks accompanied by a ® on the website were registered in both Canada and the United States. My worries for Tim Hortons allayed, I moved on to the underlying issues.