Protecting the Name of Your Business

Protecting the Name of Your Business
There are basically three ways to protect your business’ name:

1. Operate your business as a sole proprietor with a trade-name, the common law will protect your right to use a trade-name that has not previously been incorporated.  However, it is then up to you to protect this name if another business starts to operate with the same name;
   
2. Incorporate in Alberta to protect your trade-name provincially and incorporate federally to protect your trade-name across Canada; and
3. Register the trade-name as a trademark in Canada for 15 years of protection.

Common law protection of a trade-name and a logo
Passing-off is the common law action that can be used in court to enforce the right to operate under a particular trade-name without unfair competition. By common-law one also possesses copyright and moral rights to the logo they created for the business. The government of Canada allows concurrent copyright and trade-mark protection. In order to be successful, the business that wishes to retain the right to operate under a trade-name and/or logo is the plaintiff in court and has the burden of proof, on a balance of probabilities, that:

1. There is the existence of goodwill or a reputation in the trade-name or the logo;
2. The public has been deceived due to a misrepresentation by a different company using the same name or logo; and
3. There has been actual or potential damage to the plaintiff.

To protect your trade-name, start by proving that you have acquired a reputation in the geographical area where you seek to enforce your rights.  Unregistered trade-names are enforceable only in the geographical area where the mark has become known. The goodwill extends only to the specific wares or services associated with that trade-name.
Confusion arises if the consumer believes the businesses using the same trade-name are affiliated. The court will consider:

1. The inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known;
2.  The length of time the trade-marks or trade-names have been in use;
3. The nature of the goods, services or business;
4. The nature of the trade; and
5. The degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them.

Proving damage means that one must prove lost profits, customers, or market share.  Damages can arise from an attempt to mislead the public and potential damage to reputation or goodwill. The common-law provides trade-name and logo protection in Canada, but the business must pursue that protection in court.
Another company can incorporate with the exact same name as your trade-name, the statutory laws of Alberta and Canada only protect an incorporated company’s name from being copied. Another sole proprietor may operate with the exact same name as your trade-name.
Incorporating the business provincially or federally and extra-provincially
Incorporating federally will protect the corporation’s name across Canada.  This protection is not as broad as registering a trademark federally.  If you choose to incorporate federally as a Canadian corporation then you must follow by registering extra-provincially as a provincial corporation in Alberta. There will be annual renewal fees for both the federal and the provincial registration. If you register exclusively as a corporation in Alberta and subsequently someone else registers the exact same name as a federal corporation you will still be allowed to preserve your corporation’s name in the province of Alberta.  Incorporating a business does not protect your logo.
Once a business is incorporated it is a separate legal entity and as such must file a corporation income tax (T2) every year with the Canada Revenue Agency even if there is no tax payable. Depending on whether you seek an accountant’s services, this may be expensive.
Register a trade-mark
A trade-name can be registered if it is used to distinguish your goods or services from those of others.
Trade-marks are registered federally and they will protect the name and logo across Canada for 15 years. The cost in 2018 is $250 for a filing fee, then another $200 for the trademark registration.  When registering a trademark you can hire a trademark agent or a lawyer, or your can read through the Nice List of Classes to decide which classes of goods and services you wish to trademark your business under. Canada follows the World Intellectual Property Organization’s system. The same trade-name can be trademarked by different people under different Nice classifications.
The website http://www.wipo.int/classifications/nice/en/ has NCL (11-2019) available to download. This is a document that provides each of the Nice classifications and explanatory notes that will help you decide which Nice Classes best describe your work.  A trademark agent may also be consulted.
Use the Canadian Trademarks Database to search if your name has already been trademarked in the classes that you wish to use.  If the name is available, the next step is to file for the trademark, note this filing fee is non-refundable. The name that you file will be published in the Trade-marks Journal for two months so others could oppose your trademark. This journal is published every week in compliance with the Trade-marks Regulations (Canada). An opposition costs $750. The government of Canada’s webpage is very informative for registering a trademark.  Call Canada’s Intellectual Property Office if you have any questions, 1-866-997-1936.  If your name is protected by trademark, one of the corporate registries in Alberta may still allow a company to incorporate with that same name according to a specialist available at 310-000.

Additional information can be found at:
Government of Canada: Canadian Intellectual Property Office
Government of Alberta: Corporate Registry Service Alberta

Shannon Peddlesden was the 2018 summer law intern at the BLG Business Venture Clinic, and is a 2nd year student at the Faculty of Law, University of Calgary.