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The Advisor Current Business and Personal Services Law Issues
SPRING 2012 You've obtained a name search at Corporate
Registry, reviewed a NUANS report, and registered your corporation
at the federal or provincial corporate registry. You may have even
registered your trade name. So, you own your business name right?
Not necessarily.
Registering your corporation or trade name will not, in itself,
allow you to prevent a competitor from using your business name or
trade name to offer wares or services to the public. Business
owners are often surprised by this fact, and cannot understand how
a competitor could operate its business using a highly similar, or
even identical, business name. The fundamental reason is that
corporate or trade name registration does not provide your business
with trade-mark protection, and it is trade-mark law that gives the
highest and best rights to use of business names.
Trade-mark Law
Trade-mark rights are acquired through use of the
"trade-mark" (often, business name) in association with
wares or services. If your corporation is incorporated but does not
immediately use its corporate name to offer wares or services, your
business will not acquire any trade-mark rights in your corporate
name until such time that your business begins to use your
corporate name in association with wares or services. Further,
unless your trademark is registered at the Canadian Intellectual
Property Office, any trade-mark rights that you have acquired in
your business name ("common law" trade-mark rights) only
extend as far as the geographic area in which your trade-mark has
gained a substantial reputation. Therefore, if your business only
offers wares or services in Calgary, you likely do not have the
right to prevent use of your business name in Edmonton, and perhaps
not even in Red Deer, irrespective of the fact that you have duly
registered your corporation or trade name.
Geographic Limitation of Rights
The geographic limitation of common law rights and corporate
registration is of increasing concern for our clients. In the past,
it may not have concerned most business owners that a third party
was using an identical business name to operate a competitive
business in another jurisdiction in Canada. However, the internet
and the ubiquity of electronic communication have expanded the
borders of business. Our clients' businesses can now be
threatened by a new start-up based in another province that uses a
similar business name to offer similar wares and services on the
Internet. Neither common law trade-mark rights nor corporate
registration alone can typically prevent that start-up from using
even an identical business name. Corporate registration alone also
will not permit the corporation to wrestle the relevant domain
names from a legitimate business competitor – which in
some cases can allow a bona fide business competitor to divert
business or monopolize the Internet presence with impunity. A
business owner that relies solely on its corporate registration to
establish ownership of its business name will also find it
difficult to prevent an infringing use of its business name on the
Internet.
Trade-mark Registration
For these reasons, a business owner that offers wares and
services to the public using its business name should secure the
exclusive right to use its business name through trade-mark
registration. A Canadian registered trade-mark provides the
business owner with the exclusive right to use the registered
trade-mark in respect of the registered wares and services in all
of the provinces and territories in Canada. The trademark owner
also is the presumptive owner of the registered trade-mark for use
in association with the registered wares and services, and anyone
seeking to challenge ownership will have court. It is also a
powerful tool to compel third parties to remove content that
infringes a trade-mark owner's rights, or transfer a domain
name encompassing the mark to the trade-mark owner. However, it is
important to apply for trademark registration at the earliest
opportunity, as applying early often reduces issues with the
Trade-marks Office and competing businesses, which reduces the
expense. In fact, a business can apply to register its trade-mark
even before it starts using the trade-mark in association with
wares and services.
To determine if trade-mark registration is appropriate for your
business, or to discuss other trade-mark or business concerns,
please contact a member of our Intellectual Property and Technology
Group. Our lawyers have experience in a wide range of intellectual
property and corporate matters, and would be very happy to
assist.the legal burden of proving otherwise in
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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