Tariff Issues and New Marketing Strategy: Don’t Forget the Impact on Your Trademarks

Faced with the uncertainty of exactly when U.S. tariffs on Canadian products will come into force, some Québec businesses and other Canadian companies are considering diversifying their markets and/or export markets in order to limit the impact of these measures. 

Others are getting ready to set up operations directly in the United States. Naturally, the strategy adopted by each company will depend on the strategic vision of its leaders, the particularities of its business sector and its financial resources. Whatever the strategy chosen, careful planning will be vital to its success.

Evaluation and Optimization of Your Trademark Portfolio

Assessing and optimizing your company’s trademark portfolio is a key step in this planning. It’s important to ensure that your trademark protection strategy is in line with your new marketing strategy. Therefore, if you haven’t already done so, you need to protect your trademarks in new countries of interest by registering them in those countries. 

Checking Trademark Availability

What’s more, before marketing in countries of interest, it’s essential to check the availability of your trademarks by conducting the appropriate availability searches in these new markets. These availability searches are important to ensure that the planned use and registration of the trademarks in question (words, logos, slogans) do not infringe on the prior rights of third parties. Neglecting to carry out these searches could result in administrative and/or legal proceedings, claims for damages, or even tarnish your company’s image.   

It’s strongly recommended not to limit your efforts to a simple search for identical trademarks on trademark databases or to a simple consultation of search engines or social networks, as these won’t guarantee the absence of confusingly similar prior trademarks. Instead, conducting a proper availability search covering phonetic, visual and conceptual similarities is advisable in order to identify and manage any risks.  

Companies are strongly advised not to neglect this research in targeted countries as part of their new business strategy to limit the impact of the announced tariffs. These availability searches should be an integral part of the planning process before implementing that strategy, as obtaining trademark rights in one or more countries—Canada and the U.S., for instance—doesn’t mean that the trademark can be used in the European Union or Mexico. The right to use a trademark in any new country must be assessed in relation to the prior rights of third parties in that country. 

Geographic Expansion and Unregistered Trademarks in Canada

If you use a trademark in Canada without having registered it, be aware that the rights arising from its use are limited to the geographical territory where you sell your goods and services under that trademark. So, if local use and the trademark rights arising from that use have been sufficient until now, any expansion into another Canadian territory (such as Western Canada) will require that you check the availability of your trademark in this new territory and secure its registration in Canada if it’s available. In other words, the rights arising from using your unregistered trademark for many years in the province of Québec, or in the Greater Montréal, for example, are no guarantee that you can extend your market to Ontario or Drummondville without the risk of infringing on the rights of third parties who may also hold rights to their unregistered trademark in those regions. 

 

U.S. Licensing Opportunities

Another opportunity in light of the current situation with the U.S. is to grant local American companies the right to use your trademarks by manufacturing your goods on their premises in return for royalties. If importing becomes too costly due to rising tariffs, manufacture under licence in the U.S. could generate attractive revenues while avoiding customs duties. If you’re interested in this business model, it’s crucial to clearly define this use under licence in a licensing agreement, the terms of which must ensure you exercise control over the nature and characteristics of the goods manufactured and sold under the trademark. 

Our team of trademark specialists will be pleased to guide you in your trademark protection strategy, both Canadian and international, including verifying the availability of a trademark for use and registration, and licensing agreements.