By Glenn Rumbell
Most businesses put substantial thought into their company name or brand. Some, such as ‘Starbucks’ are highly unique (how did Howard Shultz link a character from Moby-Dick with coffee?) others like the name of my firm ‘Ross Rumbell’ (the last names of our founders) are less so. Regardless of the amount of creativity that went into choosing a brand, it is the means by which a business, its products and services are uniquely identified in the market place, and therefore, a valuable asset.
Not surprisingly, when I speak with entrepreneurs and new clients, protection of their brand is a key talking point. Most people understand the basic idea of a trademark. Where owning a registered trademark is not a practical option, or legal possibility, there are other options to enhance protecting a brand – but it can be confusing.
|Option||How it works||Pros||Cons|
|Registered trademark®||Register the name (e.g. “ShamTech”) as a trademark with the Canadian Intellectual Property Office. In an infringement action there is a presumption that the registered trademark is valid, and the onus is on the unregistered trademark holder to prove a prior or better right.||Provides an exclusive Canada-wide enforceable right to use the trademark in association with a defined class of products or services (e.g. computer and software). Because the trademark is registered, it is discoverable by anyone who conducts a trademarks search, or who orders an official name search (NUANS) for the same or a similar trademark. This should deter others from using an identical or confusingly similar name.||The process is complex and its best to use a trademark agent, which may be too costly ($1,500 – $5,000) for some start-ups. Because registered trademarks are national rights, they must be registered on a country by country basis. It is possible to lose a registered trademark (expunged) including if someone can demonstrate prior use or that it is not distinctive.|
|Common law trademark™||Be the first to use the name (e.g. “ShamTech”) in association with products or services (e.g. computer and software) in a given area.||Arises automatically through use and requires no registration or fees. You can enforce your rights through the courts in the geographic areas in which you use the mark. Where there is infringement, priority is given to the whoever used the trademark first.||The right extends only to the goods and services to which the trademark is associated, and only in the geographic locations in which it is used. For example, if “ShamTech” is a local computer repair shop in Toronto, someone may be able to use the name for an identical business in Vancouver. Because common law trademarks are not registered, they are not disclosed in a NUANS or other public searches.|
|Incorporation||Use the name as part of your corporate name. For example, “ShamTech Solutions Inc.”||In most jurisdictions a corporation is prohibited from having a name that is identical or confusingly similar to another corporation. Corporate names are registered and are disclosed in NUANS searches. This may deter others from using an identical or confusingly similar name.||It is best to use a lawyer to incorporate a company, which may be too costly ($1,000 – $1,500, plus annual upkeep) for some start-ups. Different jurisdictions apply the rule against identical/similar names, with differing degrees of vigor and may permit very similar corporate names (e.g. ShammTech Solutions Corp.” to be registered. The main benefit is the deterrent effect.|
|Business name registration||Where a company (or person) uses a name that is different from its legal name, the ‘business name’ must be registered with the provincial government. For example, 1234567 Ontario Inc. carrying on business as “ShamTech”.||Business names are registered and are disclosed in NUANS searches. This may deter others from using an identical or confusingly similar name.||A business name registration does not convey a right to the name and should not be relied upon to protect a name. The sole benefit is the deterrent effect.|
|URL||Use the name as part of a URL (e.g. shamtech.ca). Purchase as many Top Level Domains (e.g., .com, .ca, .net, etc.) as reasonable and available, as well as all reasonable variations.||Ownership of a URL provides an exclusive international right to use the URL and can be managed to show up on most internet searches. Holding the popular URLs for a name may deter others from using an identical or similar name, because of the inability to purchase a useful URL for their business.||Ownership of a URL conveys exclusive rights to the URL, but not the name “ShamTech” that is part of the URL. The sole benefit is the deterrent effect.|
|Social Media||Promote the business via Social Media platforms, including registering home pages, etc. under the name.||While Social Media platforms typically permit multiple identical name users, an active presence on these sites demonstrates ongoing use of the name, reinforces common law trademark rights, and may deter others from using an identical or similar name.||Social Media platforms do not convey any rights to the name. The sole benefit is the deterrent effect.|
As founding partner, Glenn Rumbell brings almost 30 years of business law experience, a distinguished top legal firm background and a passion for helping startups. Since the early 1990s, he has forged a successful and varied career as a lawyer, entrepreneur and investor in Canada’s legal, investment and technology industries.