A interesting Report on Business article by the founder of
a Canadian business is useful as a cautionary tale about brand
confusion (see: I was outraged when Sobey's
rebranded its chain with the same name as my
company). The author of the article tells of
her struggles when grocery chain Sobeys launched a brand
– FRESHCO – that was
identical to the name of her then 15-year old company, also named
FRESHCO. It sounds like a frustrating
experience. In particular, the author notes that her company
was "federally incorporated across Canada, and not
trademarked," leaving her with no legal options to
prevent the entry of Sobey's FRESHCO brand for grocery
store services. For small business owners or start-ups,
this might be worth examining with a legal lens:
First, it's important to remember that incorporation is
completely different from trademark registration. One is creation
of a corporate entity, and one is the registration of a brand name.
The corporate name sometimes (but does not necessarily) mirror
the core brand name of the business. A corporate name is no
guarantee of anything in the trademark realm.
Next, don't forget that trademark rights are based on use
in the marketplace, and a business generates certain
trademark rights even without taking the step of registration at
the Canadian Intellectual Property Office. In other words, a
business can defend common law trademark rights based on
past use even in the absence of a registered trademark.
It's just harder than with a registered mark.
A registered trademark provides stronger rights across
Canada, and that kind of brand protection should always be
considered by business owners as part of their investment. Even
after an incident like the one described by this
author, it's open to the earlier user of the mark to apply
for registration, even after many years of "unregistered"
In this case, the Sobey's trademark FRESHCO for grocery
services is in a different channel of trade than the author's
FRESHCO mark for construction services. Trademark law permits
similar or even identical marks to co-exist, so long as consumers
aren't confused. Think of DELTA for hotel services and DELTA
for faucets. Identical marks, different channels of trade. There is
actually nothing improper about that, as frustrating as it may seem
to the earlier user.
The author appears to have used this as a positive opportunity
to reinvest in the brand and refocus the company's marketing
message. If this kind of thing happens to your business, ensure
that you get legal advice from an experienced trademark lawyer on
your options as you make decisions for your company.
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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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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