Bereskin & Parr's Trademark Basics for Businesses series introduces entrepreneurs and business professionals to the fundamentals of trademarks in Canada and focuses on key concepts such as trademark selection, registration, use, and enforcement in the context of starting and running a successful business.
In today's competitive and fast-paced world, starting and running a business is easier and yet more complex than ever before. Despite the rapid expansion of a wide variety of different industries and markets, practically all thriving businesses own, leverage, and protect one or more valuable brands. The first entry in this series covers some common questions about trademarks and a few considerations for selecting one.
What is a trademark?
A trademark is a competitive tool for your business. Trademarks are signs that allow consumers to determine the individual or company from which a product or service originates. The most common types of trademarks are words, taglines, and designs, but sounds, scents, tastes, textures, colours, three-dimensional shapes, methods of packaging and other non-traditional signs can also function as trademarks. Use of the " symbol with a word, tagline, or design indicates use as a trademark, and use of the ® symbol means that the mark has been registered.
What are the differences between trademarks, copyrights, and patents?
Each of these refers to a different type of intellectual property that protects a particular type of subject matter. Trademarks protect brands, i.e., anything used to distinguish your business's goods or services in the Canadian marketplace. Copyrights protect literary and artistic works. Patents protect technical inventions and processes. In some instances, multiple types of intellectual property protection may apply simultaneously. For example, a logo design created and used by your business may be protected under both copyright and trademark law.
How should I choose a trademark for my business?
Not all trademarks are equal. Some trademarks receive strong protection under trademark law. The strongest trademarks are highly distinctive or unique. These include invented words such as ROLEX® or GOOGLE®. Arbitrary or random words that are unrelated or only vaguely related to the goods or services are also likely to be strong, e.g., APPLE® for consumer electronics or TRIDENT® for chewing gum. Suggestive words or phrases that imply a connection with particular types of goods or services can function well as trademarks (e.g., MICROSOFT® for computer software) but may receive less protection.
Some types of trademarks are weak and should be avoided. For example, words that would likely be perceived as names or surnames in Canada are inherently weak, as are geographic names. Words or phrases that clearly describe, deceptively misdescribe, or praise the character or quality of the goods or services are also best avoided despite the fact that businesses often adopt them as trademarks. Examples include QUALITY LINENS for bedding products and TERRIFIC TAKEOUT for restaurant services. Trademarks that combine any of the above elements are also likely to be considered weak.
The types of weak marks discussed above receive little protection under trademark law and typically cannot be registered in Canada without filing evidence that the mark has become well-known across the country through years of extensive sales and advertising leading up to the filing date (i.e., these types of marks must be used extensively to be registered).
If you have selected a logo, stylized word, or other design as one of your trademarks, you should ensure that your business owns the copyright in the design. In Canada, a third-party graphic designer or other artist who creates a design retains the copyright in the design unless the artist signs a written transfer of the copyright to your business. Even if the design was created by one or more individuals within the company, it is generally prudent to execute a written transfer of copyright, especially if any of the individuals involved are not considered employees. In order to avoid a costly dispute, businesses working with third-party designers would be well-advised to retain a qualified lawyer.
Can my trademark be the same as my business name or domain name?
Your trademark may be the same as, similar to, or derived from the name of your business and/or any domain name you may have acquired for your business. However, simply incorporating provincially or federally does not grant you any trademark rights, nor does acquiring control of a domain name. As will be discussed in the next article in this series, trademark rights arise only from the use and registration of the trademark in Canada.
How do I know if my business's desired trademark has already been taken?
Another individual or business may have already laid claim to the trademark you have selected. Your business could incur significant and serious legal risks by adopting and using a trademark that is likely to cause confusion with another trademark that is registered or in use in Canada. Further, your trademark cannot be registered if it is confusing with another registered trademark. Conducting a clearance search can be an effective strategy for identifying and mitigating these types of risks.
A clearance search is designed to identify possible obstacles to the use and registration of your desired trademark in Canada. While brief searches of the Internet or the Canadian Trademarks Database may be sufficient to locate the most obvious risks, it is a mistake to rely solely on these types of searches. Businesses seeking to minimize the chances of a costly dispute in the future should retain a qualified lawyer or trademark agent to conduct trademark searches (and to provide tailored recommendations and advice based on the results).
Does my business have to apply to register a trademark in Canada?
The second article in this series will discuss the benefits and process of trademark registration in Canada. While entities doing business in Canada are not required to register their trademarks, a registration confers exclusive rights to use the mark across Canada for the term of the registration, which can reduce the risk of another entity challenging your use of the mark. In addition, several online marketplaces such as Amazon and Shopify require sellers to have a pending or registered trademark in Canada to use anti-counterfeiting tools and access other brand-related features.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.