How to Effectively Implement a Co-branding Strategy

There have been relatively few cases which have considered situations involving co-branding although co-branding is fairly common. In the United States, there is some authority for the proposition that a product may be associated with multiple marks owned by different firms. A common example is a familiar manufacturer’s mark and a merchant’s mark appearing at the same time on a product, with one mark identifying the manufacturer and the other mark identifying the retail merchant. The use of multiple marks is appropriate so long as the separate identifying function of each mark is made apparent to consumers.

The leading case is Yardman, Inc. v. Getz Exterminators Inc., 157 U.S.P.Q. 100 (TTAB 1968), where a lawnmower was manufactured by Yardman, Inc. and sold exclusively by Sears Roebucks & Co. The YARD-MAN trademark and the Sears trademark CRAFTSMAN were used on the mowers and their packaging. However, each machine bore a nameplate indicating that Yardman Inc. was the source of the mowers. This was accomplished by using the legend “Product of Yard-Man, Inc. … for Sears, Roebuck & Co.”.

There have been very few reported cases in Canada dealing with the issues associated with co-branding. Relying on the United States jurisprudence and principles established under the Canadian Trademarks Act, it appears that co-branding should not be objectionable by itself as long as the following steps are taken:

(a) Each participant should be licensed to use the trademarks which are used in the co-branded initiative. The licensing arrangements must satisfy the requirements of the Trademarks Act dealing with control of the character or quality of the goods or services. In addition, the licence should specify how the respective marks will be physically used, particularly in relation to each other; and

(b) The co-branded trademarks must be used in such a fashion as to maintain the distinctiveness of each mark. For example, if a manufacturer’s and distributor’s marks are used the manufacturer’s mark must be identified with the manufacturer and the distributor’s mark must be identified with the distributor. An appropriate trademark legend similar to that used in the Yardman case should be developed and used. The message to the public is vital.

There will, of course, be numerous other issues to consider for inclusion in the licences but the above represents the bare minimum from a trademark point of view.

John McKeown
Goldman Sloan Nash & Haber LLP

480 University Avenue, Suite 1600
Toronto, Ontario M5G 1V2
Direct Line: (416) 597-3371
Fax: (416) 597-3370
Email: mckeown@gsnh.com

These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.