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Why You Should Register Your Business Name as a Trademark - By Jennifer McKay

 

October 02, 2015

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Building a brand takes time, effort, and resources. Business owners know how important their business assets are but some fail to recognize until it is too late that their most significant assets are their intangible assets or intellectual property.  A trademark is a type of intellectual property which is referred to in common parlance as a brand. A business name, when used in association with goods and/or services offered to the public, functions as a brand or trademark and is protectable as such. While registering a business name as a trademark is not mandatory in order to carry on business in Canada, it is a wise step to take early on in the process of starting a business.

Business start-ups often spend numerous hours deciding on an appropriate name and logo for their business. It can be disappointing, to say the least, to find out a few years down the road that a third party is conducting business under a confusing name and that there is nothing that can be done to stop them - or worse - that the third party is in a position to insist that the business owner cease use of the new name and logo and replace it with a non-confusing one.   It happens more often than you would imagine.

The earlier a business owner is able to solidify its rights to the business name; the better off the business will be in the long run.  The only way for a business owner to ensure that he/she has exclusive rights to a business name across Canada is to obtain a trademark registration from the Canadian Intellectual Property Office (“CIPO”).

Small business owners may be tempted to forgo spending money on a trademark registration when there are so many other start-up costs, especially when many small businesses are able to carry on indefinitely with no trademark related issues. However, if a third party later becomes aware of the business and has trademark rights in a confusing business name, he/she can insist that the name of the business be changed to one that is not confusing with his/her business name. This can happen at any time but often occurs when a decision is made to expand operations, thus drawing new attention to the business name. This type of problem can be easily avoided by registering the business name as a trademark with CIPO from the beginning.

The registration process takes time (generally eighteen months to two years, if all goes well) and can cost a couple of thousand dollars; more if the application is opposed by a third party claiming competing rights. However, opposition is rare, occurring in less than three percent of applications and the costs of registering are generally significantly less expensive than the cost of rebranding. Further, there is a lot to be said for having the peace of mind of knowing that the rights to the business name are secure.  

Once a trademark registration issues, the owner of the registration is entitled to the exclusive use of the trademark across Canada along with the corollary right to prevent third parties from using confusing trademarks.  While it is possible to enforce an unregistered trademark against a third party using a confusing trademark, enforcing a registered trademark is significantly easier as there is no need to establish a reputation in the mark. Another significant advantage to owning a trademark registration is that any third party businesses considering trademark registration for their own business name should be deterred from choosing a confusing name in light of the registration if they review the CIPO Trademarks Office database prior to deciding on a name. Further, applications for registration of confusing trademarks should be blocked in light of the registration. Finally, having a trademark registration entitles the owner to use the ® symbol to designate the registration and a trademark registration can be renewed indefinitely. As long as a trademark remains in active use in association with the goods and/or services identified in the registration, it can last forever. 

Many business owners are under the mistaken impression that if they incorporate or register their business name, they are adequately protected but that is not the case. In order to have exclusive rights to a business name across Canada, the name needs to be registered as a trademark with CIPO.  It is a completely separate and worthwhile process.

As part of the Intellectual Property Group at Perley-Robertson, Hill & McDougall, Jennifer’s expertise dealing with both national and international trade-mark portfolios make her an asset to the firm’s team. Her extensive experience includes registration, licensing, opposition, litigation, availability opinions, transfers, domain names and summary cancellation proceedings. She can be reached at (613)-566-2819 or jmckay@perlaw.ca.