Most businesses understand the importance of protecting their brand, but many mistakenly assume a registered corporate name or trade name gives them trademark protection. This has led to countless cease and desist letters, trademark infringement lawsuits and rebranding exercises.
In Canada, there are various types of protection available, including trade name registration, corporate name registration and trademarks. Each provides varying levels of protection and should be carefully considered in order to position your business for success.
Trade Names and Corporate Names
Businesses often operate under a trade name that is different from their legal name. Any business that portrays itself to the public under a name other than its full legal name must register a trade name.
Over time, your trade name may develop some goodwill. When customers hear or read the name of your business, they may attach a certain amount of value to it.
Businesses can protect themselves by registering a business name. If you can demonstrate that you intend to use the name for business purposes, you will be able to register it, subject to some exceptions. Evidence of using a name for business purposes includes using the name on a company website or using it in other forms of advertisement.
The process for registering a trade name depends on the structure of your business. If you're operating as a corporation, you must register a corporate name when you incorporate. If you're operating as a partnership or sole proprietorship, trade name registration may be required for financial purposes. More specifically, if your business needs to open a GST account or a bank account, you will need a registered a trade name. Other reasons to register a trade name include growing your business and growing customer trust in your brand.
One issue that commonly arises is the similarity of the name you'd like to register to other business names in the same jurisdiction. If your name is likely to cause confusion or mislead consumers, it may be ineligible for registration. If your name claims to have association with a government in Canada, a university, a professional association or a political party, it may also be refused. Furthermore, if your business has ceased to operate under its trade name, the registration may be cancelled.
A trademark is a word, name, symbol, design or any combination thereof that distinguishes your business from others in the market. Trademark registration is the highest level of protection available in Canada and is highly recommended if protecting your name is valuable to your business.
A trademark can also be a corporate name or trade name that could develop into use as a trademark. For example, Coca-Cola Ltd. is the legal name of the company and Coca-Cola is the trade name. The trademark is COCA-COLA and the symbols related to the brand.
You can apply for trademark registration through the Canadian Intellectual Property Office's Registrar of Trademarks. Once your trademark application is received and granted a filing date, the Registrar will:
- search the Canadian Trademarks Database for any registered or pending trademarks that could create confusion with your mark;
- examine your application to ensure it does not contravene the Trademarks Act and advise you of any outstanding requirements;
- publish your application in the Trademarks Journal, offering others the opportunity to challenge your application; and
- register your trademark if no one opposes your application.
If you are granted a trademark registration, you will have the exclusive rights to the use of your trademark in Canada for a period of 10 years. You can renew your trademark registration for additional 10-year periods indefinitely.
There are two types of trademarks: registered and unregistered. Registered trademarks sometimes bear the ® symbol and unregistered trademarks, the " symbol.
You do not have to register your trademark. Using a mark for a period of time will grant you common-law trademark rights – but those rights may be harder to protect.
For example, if you wish to challenge someone's use of your common-law trademark, actually proving that the mark is yours could lead to a lengthy legal battle. If you haven't used your common-law trademark for a period of time, it could be even more difficult to prove your ownership.
While it isn't necessary to use the ® or " symbols with your trademark, you may wish to do so to indicate your ownership of the mark and to deter others from using similar marks.
Why Register a Trademark?
If you are using a corporate name/trade name as your "brand" but you have not registered a trademark, you are taking a number of risks, including:
- Someone else may have registered and already owns the trademark. They may demand that you rebrand or, even worse, sue you for trademark infringement to obtain the profits you made using their trademark.
- Someone else starts using the same trademark. If you do not have a registered trademark, you will be in a disadvantaged position to stop them, particularly if your business is only known in one region and the company using a similar mark is in a different region.
- Someone else registers your trademark after you start using it. In this case, you would have the option to oppose their trademark application; however, this is a costly procedure. If the other company obtains a trademark registration you could pursue costly Federal Court proceedings to try to have their trademark cancelled. At worst, you could lose the goodwill and distinctiveness in your brand entirely.
To avoid these risks, you can contact a trademark professional to conduct an appropriate search and register your trademark.
This article was prepared with the assistance of summer student Matthew Douglas.
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.