Provincial Law

Where someone makes a misrepresentation in the course of trade to prospective customers or ultimate consumers of goods or services which is calculated to injure the business or goodwill of another trader in the sense that it is a reasonably foreseeable consequence, and which causes, or is likely to cause, actual damage to a business or goodwill of the trader by whom the action is brought, such activity may be restrained by an action for passing off at common law. A similar cause of action is available pursuant to the Civil Code of Quebec.

To succeed in a passing off action, it is not necessary that the plaintiff conduct business in Canada, provided that the plaintiff has a reputation in its trade-mark in association with which the goods or services are offered.

2.2 Business Names

Business names, being the names (other than a corporate name) by which a business is known, are regulated by provincial law. By way of example, the Business Names Act of Ontario requires registration by every business operating in Ontario that uses a name other than its corporate name, or in the case of individuals, the names of the owners. Business is defined very broadly to include "every trade, occupation, profession, service or venture carried on with a view to profit".

A person who has not registered the name of a business cannot maintain a proceeding in a court in Ontario in connection with that business except with leave of the court. The court may grant leave if the person in contravention of the Act satisfies the court that: (i) the failure to register was inadvertent; (ii) there is no evidence that the public has been deceived or misled; and (iii) at the time of the application, the person is no longer in contravention.

2.3 Personality Rights

The provinces of British Columbia, Manitoba, Newfoundland, Quebec and Saskatchewan have legislation dealing with personality rights. At common law, which applies in all Canadian jurisdictions other than Quebec, an individual generally has the right to restrain activities which suggest unauthorized endorsement, sanction or other involvement by him or her. Such involvement may be suggested through the misappropriation of a name, likeness or other recognizable indicia of the personality.

2.4 Confidential Information and Trade Secrets

The possessor of confidential information, which is of commercial or other value, can generally require another party who obtains that information to maintain it in confidence. The existence of this legal right depends on whether there is a contractual or other relationship imposing an obligation of confidentiality. The concept of proprietary information does not apply to information generally known or obtainable. It may apply to information obtained in the course of negotiating a business relationship, such as a joint venture.

The remedies for the unauthorized use or disclosure of confidential information include: (i) temporary and permanent injunctive relief; (ii) an order prohibiting use or disclosure; (iii) either the damages suffered by the possessor or the profits earned by the violator; and (iv) punitive damages. As well, other benefits gained from the unauthorized use of confidential information may in some circumstances be recoverable by the party from whom the information was obtained.

2.5 Licensing

All types of intellectual property may be licensed. The licensing of trade-mark rights must be handled carefully (see 1.2.4 above). The law of licensing is governed by the law of the contract. No approvals are necessary, although recordal in the Canadian Intellectual Property Office is advisable for some intellectual property rights. Licence agreements are subject to federal competition law and to other laws of general application.