In business it’s vital to protect your good name

October, 2007

You’ve been operating your business for over 15 years under the name Caribou Clothing Inc.  Your business has become recognizable in a large part of Ontario and you have even conducted some business outside the province.  When people hear your name, they associate it with high quality products and services.  Business is good and getting better every year.

Then, you receive a phone call for Caribou Clothing Canada, and a letter addressed to Caribou Clothing & Supplies.  You do a little research and find that you have two new competitors in the marketplace operating under similar names and offering similar products and services.  You always assumed that you would be protected from any kind of unfair business practices.  You’ve been operating under your corporate name for over 15 years.  How could anyone be allowed to operate under a similar name?

Welcome to the cut-throat commercial marketplace, where competitors are only too prepared to trade off the goodwill associated with reputable companies.  What rights do you have to your business name?  When the time comes to enforce it, how good is your protection?

The best protection any business can have for its business name is a trademark registration.  A trademark registration grants its owner exclusive use across Canada in association with the wares and services listed in the trademark registration.  No competitor can use any trademark, which is confusing with a trademark registration.  Further, no competitor can use any registered trademark, whose use would have the effect of depreciating the value of the goodwill attaching to such trademark registration.  A registered trademark is the most powerful protection for any business name against infringement.

If you don’t have a trademark registration, then you are going to have to rely on the common-law to protect your name.  Unfortunately, the common-law only protects your name in the area in which you can prove that you have a reputation, i.e. where the public associates your business name with your business.  You will have to prove that you have such reputation in court with evidence.  Such procedure can be time consuming and expensive.  Even if you have a registered corporate name or Ontario business name, the name of your business is only marginally better protected.  On the other hand, if you have a trademark registration, such registration provides notice to the world that you are the trademark owner.

Whatever the circumstances, a business has to actively protect its rights in its business name.  The optimum protection is a trademark registered in the Canadian Intellectual Property Office.  So long as you properly maintain your registered trademark, it will provide your business with the best protection available under Canadian law.  Don’t wait to file your trademark application until someone starts taking advantage of the goodwill present in your business name.  The fact remains that once someone starts using a business name identical or similar to yours, it might already be too late.

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Ryan K. Smith is a lawyer and trade-mark agent at Feltmate Delibato Heagle LLP. He specializes in corporate and commercial law with expertise in intellectual property matters including trade-marks, copyrights, privacy, information technology, and confidential information.  You can reach Ryan at rsmith@fdhlawyers.com and (905) 287-2215.