Trademark rights in Canada belong to whoever used the mark first, not whoever registered it first or operates on a larger scale. Sea Tow Services International, Inc. v. C-Tow Marine Assistance Ltd., 2025 FC 27, is a clean illustration of that principle, decided in favour of the smaller, regional operator.
A Familiar Name Meets an Earlier User
Sea Tow, a well-known American marine assistance brand, held Canadian trademark registrations and sought to enforce them against C-Tow, a British Columbia boat-towing company using a similar mark. C-Tow's defence was not that the marks were different enough to avoid confusion; it was that Sea Tow was never entitled to register its marks in Canada in the first place, because C-Tow's own use of the C-Tow marks predated Sea Tow's adoption of its Canadian marks.
Proving a Chain of Title Back to 1985
C-Tow traced its chain of title to the C-Tow marks back to 1985, through a series of business transfers, well before Sea Tow adopted its Canadian marks in 2010. The Federal Court accepted that chain even though C-Tow could not establish every precise mechanical detail of an intermediate transfer, holding it was prepared to infer the necessary chain of title where the surrounding evidence, including successive owners who received the business's operating essentials, the C-Tow logo and trademark among them, supported that inference.
The Outcome: Sea Tow's Marks Struck From the Register
Because C-Tow's use predated Sea Tow's Canadian filings, the Court held that Sea Tow was never the person entitled to secure the registrations it obtained, and declared the Sea Tow marks invalid, ordering them struck from the register. C-Tow was separately reported to have been awarded a substantial damages figure in the broader dispute, underscoring that the win was not merely declaratory.
Why Chain of Title Diligence Matters Before Filing
The case is a caution for any business, particularly one entering a market where a similar name is already in local use, to investigate prior use carefully before filing, not simply search the trademark register and assume a clear result means a clear field. It is equally a lesson for a smaller regional business: well-documented use history, even where the paper trail is imperfect, can defeat a much larger competitor's registered rights.
We conduct prior-use and chain-of-title diligence before filing, and we represent both larger entrants and established regional users when an existing registration is challenged on exactly this basis.