Canada: Trademark Basics For Start-Ups

A big part of establishing a successful start-up business is developing a meaningful brand. To many, this simply means using an online service to create a catchy name and graphic for your business, and marketing it from there. 

But did you know you can also get exclusive rights to use your brand if you register it as a trademark? Did you also know that if you do not check to see what else is out there, there is a risk your newly developed brand could be infringing on another entity's existing trademark rights? 

In addition, there are other issues to consider in developing a brand that qualifies for trademark protection. The article below sets out in detail what a trademark is, what trademark rights consist of, what trademarks are registrable, and the process for applying to register a trademark. 

What is a Trademark?

A trademark, broadly speaking, is any word, symbol, design, slogan, sound or combination of these elements that distinguishes your business' goods or services from those of others in the marketplace.1

A trademark allows a consumer to link a good or service with its source.  It also can be a badge of quality based on the goodwill and reputation a source has acquired.  A trademark, particularly a registered trademark, can add value to a business and help leverage goodwill for new product lines or services.

Trademark Rights

Simply by using a trademark, under Canadian law trademark owners are generally considered to acquire certain rights in the trademark.  These are often referred to as "common law" trademark rights.  These rights are often geographically limited in scope and can be difficult to enforce.

Registering a trademark gives you more robust rights and protections, meaning it is easier to enforce. If you obtain a trademark registration in Canada, you have the right to exclusive use of the trademark throughout Canada for a period of 15 years.2 This means you can stop other people anywhere in Canada from using a trademark that is the same as or that is confusingly similar to your trademark, even if you have not established a local reputation for your trademark in the specific area of Canada where the other party is using its mark.
You must apply to the Canadian Intellectual Property Office to register a trademark.  The application process in Canada can take approximately 1-2 years.  You can also file concurrent applications to register your trademark in other countries and jurisdictions, where you will get similar protection according to the laws of those other countries and jurisdictions.

Trademark Registrability

Not all trademarks are registrable.  If there is another trademark on the Trademarks Register that is the same as or confusingly similar to your trademark, taking into account all relevant considerations, including whether the earlier mark is applied for in association with goods and services that are the same as or similar to yours, your trademark will not likely be registrable.  Similarly, if someone is using a trademark that is the same or similar to yours in Canada and in association with the same or similar goods or services to yours, your trademark may not be registrable and the earlier trademark user may have grounds to oppose your trademark application. 

There are other reasons that a trademark might not be registrable.  For example, if the mark is "primarily merely" a surname, if the mark is clearly descriptive of the associated goods or services, if the mark is a geographic location and is clearly descriptive of the origin of the associated goods or services, or if the mark is a superlative it might not be registrable.  For example, marks like FRASER'S FOODS, OKANAGAN, or THE BEST would not likely be registrable without evidence that the marks had acquired distinctiveness in Canada.3 There are also certain other marks that relate to the government, universities, etc. which are prohibited.

In general, it is wise not to invest time and money into developing a trademark without first taking the time to determine whether it is likely registrable.

In particular, be careful using logo-maker websites.  These can be great creative tools, but by no means do they guarantee your ability to use and/or register the logo you create as a trademark.  Similarly, if you hire a graphic designer to help design a trademark, make sure they are aware of trademark registrability and availability considerations.  If they are not, make sure you take ownership over that responsibility, as the user of the mark (rather than the person or entity who designed the mark or logo) is the one who is liable for trademark infringement.4

Even if you do not plan on registering your trademark anytime soon, it is a good idea to make sure that your trademark is not the same or confusingly similar with any other existing trademarks.  If it is, you could be infringing on other entities' trademark rights. 

What Makes a Good Trademark?

Some trademarks are stronger than others from a branding perspective, and some trademarks have a better chance of registration than others. 

A strong trademark is:

  • Short, simple and memorable
  • Timeless, consistent, instantly recognizable
  • Flexible – allows you to expand into different jurisdictions and different lines of products or services

A weak trademark is:

  • Not distinctive
  • Descriptive of the goods and services it is associated with
  • Makes use of words or symbols common in the channel of trade
  • Confusingly similar with other trademarks

Descriptive vs. distinctive trademarks

It can be tempting to use descriptive trademarks because they tend to tell the consumer more about who you are, what goods or services you are offering, and/or where you are located.  But the more descriptive the trademark, the weaker the brand and the more obstacles to registration there can be. For example, the trademark JOE'S MARINA PUB has the benefit of telling the consumer exactly who, what, and where you are, but it is a weak brand and may not be a registrable trademark. 5  

Distinctive trademarks make for the strongest brands in the long run, and pose the least obstacles to registration.  Coined words are the strongest trademarks (e.g. KODAK, GOOGLE, NIKE, SONY) as they are inherently distinctive.  Sometimes these trademarks present marketing challenges at the outset because consumers are unfamiliar with the goods/services you offer.

Words that are not typically associated with the goods/services you offer (e.g. APPLE for computers; INDIGO for bookstores) can also be strong trademarks because you may quickly become the primary source that product is associated with.  Marks that are suggestive of some aspect of the goods/services you offer can also become good trademarks (e.g. SANDALS for resorts, CHAPTERS for bookstores).

Marks with descriptive, laudatory, or commonly used elements are weak.  Think about how many companies use elements like GOLDEN, GLOBAL, WESTERN, PACIFIC, BEST, etc. These elements do not add distinctiveness to your trademark.

Ultimately you have to make a business decision – prioritize how much you want to communicate to consumers who you are and what you do by way of your trademark, versus how strong of a brand you want to develop.  Are you a JOE'S MARINA PUB or the next SONY?

Word marks vs. design marks and scope of protection

There are a number of different types of trademarks. The most common are word marks (e.g. NIKE), design marks (e.g. the NIKE swoosh) and word & design marks (e.g. NIKE with the NIKE swoosh).  All of these marks are independently registrable.

Each type of mark affords a different scope of protection and ease of registration:

  • Word marks are generally considered to afford the broadest scope of protection, because anytime someone uses or reproduces the registered word(s) in any font, colour, size, etc., it is considered use of a word mark. 
  • Marks involving a design element may be easier to register because they may provide additional elements of distinctiveness as compared to word marks.  However, such marks including a design element are generally considered to offer a more limited scope of protection because in order to infringe, another party may need to use the same or similar design elements in order to be considered confusingly similar to a registered design mark.
  • Note that marks containing a design element may also be automatically protected by copyright law, irrespective of trademark registration.  Word trademarks are generally not protected by copyright.  This may afford an extra layer of protection for marks that incorporate design elements.

Some companies choose to register both word marks and design marks (for example, Nike has registered all three of the above-referenced marks).  This can be a strategic choice – you may not need registrations for everything at the outset of your business, and you may be able to register additional marks later (the risk being that someone else applies to register a confusingly similar trademark in the meantime).  There are additional costs involved with each application, so the decision should include a careful cost-benefit analysis for your business.

Trademark Searches

Once you have identified a trademark you would like to register, it's time to conduct some searches. Searches will help you determine whether your trademark is registrable and whether your trademark infringes on other entities' existing trademark rights. You may also wish to conduct searches that canvas foreign jurisdictions if you plan to expand your business into other countries.

Your searches can include searches of the Trademarks Register, Google, domain names, and company directories, among other information repositories. When searching, you are looking for marks that are confusing with, similar to, or identical to your proposed mark that are (a) applied for or registered on the national trademark database in your jurisdiction of interest; and/or (b) being used in the same scope of business as you or that you plan to enter in the future. 

The scope of goods and services in your search for is relevant, because the same or similar trademarks can co-exist if they are in different industries.  
In addition to regular Google searches, the following are free search tools:

Getting help from a legal professional when conducting searches is highly recommended.  Though many search tools are free, effective searching require a nuanced approach taking into account several different parameters in order to reveal all relevant results.  Also, searching for logos and design marks can be difficult through the above-referenced search databases. Gowling WLG employs specialized search agents that can perform extremely in-depth searches for you.

Six quick steps for developing your trademark

  • Identify all markets and channels of trade your business is in and potentially will be in, including abroad in other countries and jurisdictions.
  • Identify all products and services your business intends to sell or provide.  Include areas you may expand into in the future (e.g. will you be selling branded apparel? Providing consulting services?).
  • A good exercise is to make a list of the marks you instantly recognize and regard highly (e.g. BMW, SONY, NIKE, GOOGLE etc.).
  • Brainstorm the brand elements you want to convey, decide whether you wish to include design elements, descriptive elements, suggestive words, or coined terms.  Prioritize how much you want to communicate who you are and what you do by way of your trademark, versus how strong of a brand you want to develop.
  • Consult with a legal professional and conduct searches of the relevant trademark databases to see whether other entities' trademarks may overlap with or cause issues for your proposed trademark(s). 
  • When you are ready, engage a legal professional to file a trademark application on your behalf.  Remember, it takes 1-2 years for a trademark application to issue to registration (in Canada, though the time to obtain a registration varies from country to country), and there can be various hurdles along the way.  It's a good idea to file as early as you can.

Footnotes

1 In June 2019, non-traditional marks such as colours, holograms, animated images, and scents will also be considered trademarks under the amended Canadian Trademarks Act.

2 In June 2019, sweeping changes to the Canadian Trademarks Act will change the registrability period from 15 years to 10 years.

3 As of June 2019, changes to the Canadian Trademarks Act will add more grounds for refusing a trademark application, including if the trademark lacks distinctiveness.

4 There are also important copyright law issues that may come up when using logo-maker websites or working with graphic designers, which are outside the scope of this article.  The key takeaway is to make sure that at the end of the day, you own the copyright in any logo or design mark you intend to use in association with your business. 

5 As of June 2019, the changes to the Canadian Trademarks Act there will be additional obstacles to registration if a trademark is descriptive and/or if it lacks distinctiveness. 

Read the original article on GowlingWLG.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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