January 9, 2012 By: Wing T. Yan and Taiji Yoshino
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Many small businesses do not consider securing trademark registrations for their business names for different reasons. Some feel that since Canada is, by and large, based on common law, business names are protected by common law even without registration at the Trademarks Office. Others simply don't know that business names and trademark registrations are two very different types of protection. While it is true that, in some sense, unregistered trademarks are given some limited "common law" protection, registered trademarks, on the other hand, will provide far better certainty and protection to their goodwill with relatively small expense.

Trademark registrations provide fifteen (15) years of protection, and can be renewed indefinitely. Unlike common law use of business name, the territorial scope of the protection covers the entire country. Thus, even if a multibillion-dollar business comes to Canada and tries to use the same or similar business name to operate its business, the Canadian trademark owner would be able to stop it for trademark infringement.

So, what if the multibillion-dollar business was TARGET, the department store chain from the US? Well, there is no exception. In Canada, there is a small clothing retail store called Target Apparel, which owns the registered trademark, TARGET APPAREL. TARGET, from the US, is currently having a difficult time obtaining its core trademark, TARGET, because of the existing TARGET APPAREL registration.

What if Target Apparel did not have a trademark registration? It is likely that "TARGET APPAREL" would not have a chance to maintain its business name as that name had not been used for a long period of time while it was going through corporate changes (it was originally owned by Dylex Limited and later bought by Fairweather Ltd. and there was a period of time when the name TARGET APPAREL was not in use). TARGET would have been able to easily obtain its trademark registration.

But that was not what happened! Target Apparel did apply for trademark registration and it is still enjoying its goodwill surrounding the TARGET APPAREL name!

Trademark registration provides its owner an exclusive right to use the mark in Canada, and is the essential step in protecting your business goodwill.

For more information, please feel free to contact Wing Yan, wing.yan@nelligan.ca or Taiji Yoshino, taiji.yoshino@nelligan.ca.

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2017 Nelligan O’Brien Payne LLP.

Service: Business Law