Risky Business: Is Your Brand Protected?

October 3, 2014

Imagine you spend a year growing your business.  You invest in the perfect logo, an eye-catching sign, and a sharp website.  You spend hours networking with potential clients.  You go above and beyond for your customers in the hopes that they will remain loyal. And word is starting to spread. After all the hard work and long hours, your business is finally gaining momentum.

Then one day you receive a letter from an intellectual property lawyer: “Dear Business Owner, Please be on notice that your business name is infringing our client’s trademark.  You are required by law to immediately cease using the business name and you must destroy all materials bearing the name, or be subject to court action and resultant damages.”   Sadly, this scenario is all too common.  Fortunately, it is entirely preventable.

As a business owner, your intellectual property, including the name of your business and your branding, are some of your most valuable assets.  The law that protects these assets is called trademark law.   But soon, trademark law in Canada will change, with new provisions that will increase the cost and difficulty of registering your trademark.  With change on the horizon, there has never been a better time to register your trademark and protect your brand.

Business owners who fail to protect their business names are taking a big risk.  Starting over with a new business name means just that—starting over.  It means recreating marketing materials, and building a new brand.  It means new networking efforts.  It means your hard-earned goodwill is gone.  You have gambled away a key asset.

The best way to avoid this scenario is to register your business name and logo as trademarks.  Each country in the industrialized world has a trademark registry where trademarks are searched, examined and registered by the Registrar.  This system has protected trademarks in Canada for the past 100 years.

Recently, the legislature assented to changes to the Trade-marks Act that will make it even riskier to carry on business without a registered trademark.  In the past, Canadian law has always required that the business name seeking to be registered as a trademark be “in use” by the applicant.  That “in use” requirement will soon be eliminated, meaning that that anyone can apply to register any trademark.  Someone who does not even own a business could register your business name as their trademark.

This significant change is likely to increase the number of “paper registrations”, making it difficult to register your legitimate business name as a trademark and making entitlement more difficult to assess. Business owners will need to work harder to protect their trademarks by filing oppositions to trademark applications that are similar to their existing marks.

In addition, there are also new requirements regarding the classification of marks; any mark involving registration in multiple classes will likely be more expensive.

Here is the good news: the amendments are not expected to come into effect until 2015.  As a business owner, you have a few months left to file your trademark applications and develop a legal strategy to protect your most valuable assets.

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Cox & Palmer publications are intended to provide information of a general nature only and not legal advice. The information presented is current to the date of publication and may be subject to change following the publication date.