Overview
Many businesses will create a brand and invest time and resources into it (e.g., engaging a graphic designer, having goods produced with the label, marketing the services, etc.), but neglect to consider whether their brand is capable of being protected at all, and whether they have an appropriate strategy for protecting it.
Building a brand on shaky legal ground can cause significant headaches down the line. It is worthwhile to consult a legal professional from the get-go.
Here are five common misconceptions that may put your brand in a perilous position.
Misconception #1: A business or corporate name registration grants you exclusive rights to the name across Canada.
A business name is a very weak way of protecting a name.
A business name registration in one province does not prevent a third party in another province from registering the same business name.
Although a federal name registration might “block” third party business name registrations at the provincial level, that’s all it does. It does not prevent others from using it as a trademark.
The most effective way to protect your brand is to register the name as a trademark.
Misconception #2: An unregistered trademark grants you exclusive rights to the name across Canada.
To enforce your rights to an unregistered trademark, you would need to bring the common law claim of “passing off.”
This requires demonstrating sufficient reputation and goodwill in the trademark within the territory where the plaintiff seeks to oust the defendant.
As a result, a claim for passing off is unlikely to succeed in those areas where there is insufficient or no use of your mark.
Although all litigation can be costly, a claim of passing off can be particularly expensive compared to a claim of infringement of a registered trademark. A registered trademark protects the mark across all of Canada and displaces the need to show sufficient reputation and goodwill in the mark. Further, a trademark registration can discourage others from using the mark at the outset.
Misconception #3: I have a trademark registration. I can stop anyone from using this mark.
A Canadian trademark registration grants an owner the exclusive right to use the trademark across Canada in respect of the registered goods and/or services. It may be possible for a third party to register the same trademark for different and distinguishable goods and/or services.
This is why the scope of protection is an important consideration when registering a trademark and requires careful strategy, hopefully with professional assistance.
Misconception #4: I have a creative trademark. I’m ready to spend money on this.
Some businesses invest time, money, and other resources into building a brand that cannot be scaled or that increases their risk exposure. Not all trademarks are created equal. Some are higher risk than others.
For example, there may already be another user of the mark (in which case you may be subject to a common law claim of “passing off”), or a third party may have a trademark registration for a mark that is confusingly similar to yours (in which case, you may be subject to a claim of infringement or other claims).
Further, some marks cannot be registered at all, or may be difficult to register, due to certain qualities they possess.
Before spending money on brand development, it may be worth seeking professional guidance to survey the landscape and identify potential risks and any inherent risks associated with your proposed mark.
Misconception #5: I don’t need to think about trademarks during the startup phase of my business.
Whether you are starting out or are an established business looking to offer a new good or service, giving at least some thought to registering a trademark is essential.
It is one of the strongest ways to protect your brand, as it grants you exclusive rights to use the mark in Canada. For example, if you plan to expand to another province eventually, having a trademark registration can help ensure that no one enters that market using your mark (in association with similar goods and services) before you do.
Takeaway
There are many other benefits to registration. That said, the benefits depend only on the planning and skill that go into preparing a trademark application. The above are only a few misconceptions regarding building a brand. In the trademark world where time is of the essence, building a strong brand requires a long-term, proactive strategy and starting on the right foot.
Fillmore Riley LLP's Intellectual Property Practice
This article is for informational purposes only and does not explore all possible legal rights or remedies. For personalized guidance on registering your trademark and protecting your business's intellectual property, we encourage you to contact a member of Fillmore Riley LLP's Intellectual Property practice.