Why You Should Apply for a Trademark Registration for Your Corporate Name

Introduction

A corporate name used as the company’s brand is one of the most valuable trademark assets of a business. Your brand will represent the quality of your goods and services and evoke a particular image and reputation amongst consumers. A strong brand will help facilitate sales of the goods and services with which it is identified.

Consider the sales you may lose and the confusion that could result if another company opened up using your same name. If you’re building a brand, investing in advertising, and hoping customers can find you, you’ll want to make sure you’ve properly protected your business name so no one else can use it. There is no better insurance than a trademark registration to protect the name which you have spent time and money developing and securing.

It is often assumed that since the incorporation process includes a search of corporate names and results in permission to operate a business under a chosen corporate name that (a): you can adopt and use that corporate name to sell your goods and services in Canada; and (b) others may not adopt and use your corporate name as a trademark in Canada. In other words, many assume that adopting a corporate name is the same as adopting a trademark.

This, unfortunately, assumes too much. A business needs a name, and that’s where initially a corporate name comes in. Approval of your corporate name means that the government does not consider that the name is identical or too similar to an existing corporate name – this is, of course, very important, to avoid, for example, ambiguity as to which company entered a given contract or owes a given obligation.

A corporate name may or may not later be used as a trademark. If never used as a trademark, your corporate name will serve only to identify your business the same way your own name identifies you (for instance, when entering a contract). A trademark, on the other hand, serves to identify the source of goods or services, distinguishing them from similar goods and services sold by others. For instance, the trademarks Sprite® and 7-Up® serve to distinguish these two brands of lemon-lime soda such that customers can identify and repurchase the soda they prefer. For a name to be a trademark it should be displayed on the goods (or their packaging) or in the performance or advertising of the services. Often times, companies do use their corporate names on their products as trademarks (generally these companies have word names, rather than being numbered corporations), however, it is entirely possible to use as a trademark a distinct name or logo. One example is the above-mentioned trademark Sprite®, displayed on bottles of the popular soda, which is sold by a company with the corporate name Coca-Cola Company. Importantly, registration of a corporate name does not provide you with trademark protection, nor does it fully ensure that the corporate name registered may be used as a trademark in association with the sale of goods and services in Canada. As such, adopting the name as a trademark may presents a number of risks if certain steps aren’t taken first.

Registration of Your Corporate Name during the Incorporation Process

In Canada, a company may be incorporated under federal legislation, the Canadian Business Corporations Act, or under one of the laws of a province or territory, such as the Ontario Business Corporations Act.

One of the steps in incorporating a company is registering a corporate name. Many entities incorporate as a numbered company for expediency (12345678 Inc., for example), and then later register a business name (also referred to as a trade name) under which they intend to carry on business.

A corporate name approved as part of an incorporation process allows your company to operate a business using that corporate name within the province or territory registered, or across Canada if registered under federal legislation. Your corporate name is the legal name of your business and must be used in contracts, invoices, etc.

This permission to operate a business using that corporate name is limited in that it does not extend permission or protection to offering goods or services in Canada in association with part or all of your corporate name as a trademark. It only applies to the operation of the business. The right to adopt and use your corporate name as a trademark in Canada is subject to the Canadian trademark rights of others. Although the name search that constitutes a required part of the incorporation process checks for similar corporate names and trademarks, it does not consider unregistered trademarks, rights in which may prevent the adoption of your corporate name as your trademark. See our additional resource for more information on the differences between registered and unregistered trademarks

How Do I Find Out If I Can Adopt and Use My Corporate Name as a Trademark in Canada?

As noted above, registering a corporate name does not automatically give you the right to use that corporate name as a trademark in association with particular goods and services. The registration process for a corporate name may turn up other registered trademarks but will not, for example, uncover prior and ongoing uses of the same name or a confusingly similar name as an unregistered trademark. These can only be found by conducting an in-depth trademark search, a process that is not a part of the corporate name registration process.

The identification of prior use of a common law (unregistered) trademark, if continuous, could expose you to risk and liability. In particular, it could make you liable for passing off once you start using your corporate name and could also defeat your attempt to register part or all of your corporate name as a trademark in association with the goods and services you intend to offer since a confusingly similar mark will have already been in use. Passing off is a common law cause of action available where a plaintiff has established a commercial reputation, a defendant has made a misrepresentation to the public, and the plaintiff has consequently suffered damage. Thus, where your corporate name is someone else’s unregistered trademark, in association with which they have built a reputation, and your product bears your corporate name leading customers to believe they are buying from the other company, you might be liable to that company. Further, although unregistered marks are not cited against applied-for marks by trademarks examiners, they may nonetheless prevent you from registering your mark as the owners of these marks may oppose your application.

In order to optimally clear a trademark for adoption and use in Canada, a trademark clearance search, which includes common law coverage, is recommended. You can read about trademark searching in our article on conducting trademark searches. If you want to be able to use your corporate name as a trademark, this search should be conducted as an additional step in the incorporation process.

Conducting a clearance search will give you confidence that the trademark can be safely adopted in Canada--except if the search turns up existing confusing marks. In that case, it will highlight the risk of conflict with third parties and help you determine whether to proceed to adopt and use the trademark in Canada.

How Can I Protect My Corporate Name from Use by Others as a Trademark in Canada?

A corporate name registration attempts to ensure protection of the public from deception; it does not provide protection for the corporate name from misappropriation by others.

While rights to corporate names may be enforced under the common law action for passing off, there are comparative disadvantages to proceeding by way of a common law action for passing off as opposed to enforcing rights in a registered trademark, which are discussed in more detail in “11 Benefits of Registering Your Trademark in Canada”.

If your corporate name will be used as your brand or to name goods or services, it is best to take extra precaution and apply to register it as a trademark. What a shame it would be to spend effort, time and money on the development of a brand only to learn that your rights to exclusively use the mark could be compromised without a registration.

Registering a trademark affords you the proprietary rights that are not provided with the registration of a corporate name. This nationwide protection and exclusive right to use a registered trademark in association with the goods and services in the registration in Canada allows the trademark owner to prevent others from using the same or a confusingly similar trademark in Canada and to enjoin infringement by others.

Should another party apply and register a trademark using your corporate name, you may need to change your corporate name to avoid infringing their rights. To avoid the aforementioned situation, in addition to your business name, you may also want to use trademarks to protect your website name or domain name, logo, company slogan and the names of your products or services.

Conclusion

In view of the potential value of a trademark, and the advantages and disadvantages of registered and unregistered trademarks, registering your corporate name ought to be strongly considered.

If you would like to learn more about how to trademark a name in Canada, contact us now for a complimentary and confidential telephone appointment.