The court concluded that the true basis of the action was to protect a proprietor right to the goodwill of his business. The Supreme Court of Canada has since repeatedly affirmed that the Trade marks Act [the Act] and the law of passing off have a dual function to protect both the manufacturer of wares (or provider of a service) and the respective customers of the wares or service.Section 10 of the Act has expressly recognized and preserved the common law action, giving protection to unregistered marks established by ordinary commercial use.Where any mark has by ordinary and bona fide commercial usage become recognized in Canada as designating the kind, quality, quantity, destination, value, place of origin or date of production of any wares or services, no person shall adopt it as a trade mark in association with such wares or services or others of the same general class or use it in a way likely to mislead, nor shall any person so adopt or so use any mark so nearly resembling that mark as to be likely to be mistaken therefore.The protection of an unregistered mark at common law or under the Act will be limited to geographic territory where goodwill has been established. Generally this will be at a local level, but, importantly for franchisors, this can be at a national or even international level and there is no requirement for business activity to take place in the area where goodwill is asserted.
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