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Trade name vs. Trade-mark – What’s the difference?

Trade nameMany people confuse trade names and trade-marks and think they acquire trade-mark rights by virtue of having a trade name. A trade name is basically a business name under which a proprietor or company carries on a particular business. The formal name of a business is called its ‘trade name’ and is the official legal name of the business entity. It may be the corporate name of a company carrying on the business or it may be a name registered with provincial authorities. Generally such registrations do not confer any proprietary rights to the name, and simply enable the public to ascertain who is using a particular trade name.

The name the business uses to market its products and services is called a trade-mark. A trade-mark (or brand name) is the device which identifies the particular goods made, or services provided, and sold by a business. A trade name may itself incorporate a trade-mark, or may itself be used as a trade-mark (to denote the origin of goods or services, as opposed to being a name) and may therefore be registrable and enforceable as a trade-mark. The trade name and the trade-mark of a business may be one and the same thing, but unless a trade-mark is actually registered, the protection afforded to trade names only is far less than the protection afforded to a registered trade-mark. If a business does not apply for a trade-mark, they may leave their trade name exposed to infringement claims of other trade-mark owners who may claim prior rights to the same or a similar trade name.

In terms of defending your trade name, the owner of a trade name is entitled to bring an action for what is called “passing off” against a person that uses a trade name that is likely to cause confusion between the businesses of the parties. The owner of a registered trade-mark has the power to sue potential infringers for trade-mark infringement.

Trade-mark registration is not mandatory in Canada but does provide many significant advantages, including the following:

  • Registration is direct evidence of ownership.
  • In a dispute, the registered owner does not have to prove ownership; the onus is on the challenger. Use of an unregistered trade-mark can lead to a lengthy, expensive legal dispute over who has the right to use it.
  • A registered trade-mark can be enforced throughout Canada, regardless of whether it is being used or enjoys goodwill in any particular area. An unregistered trade-mark can be enforced only in those areas where it has actually been used sufficiently extensively to establish goodwill.
  • As stated above, the owner of a registered trade-mark may initiate legal action for infringement proceedings. The owner of an unregistered trade-mark may not initiate trade-mark infringement proceedings, but must rely on common law “passing off” proceedings, which subject a plaintiff to a much more onerous burden of proof.

Vanessa DeDominicis practices in the area of business law at Pushor Mitchell LLP. As a Registered Trade-mark Agent with the Canadian Intellectual Property Office and the United States Patent and Trade-mark Office, her business law practice has a specific focus on intellectual property law, including filing Canadian and US trade-mark applications and advising clients on infringement issues. You can contact Vanessa on 250-869-1140 or dedominicis@pushormitchell.com to discuss the registration of your trade name as a trade-mark. This information applies as a general rule ONLY and may change depending upon the specific circumstances of your own situation. You should consult a lawyer before acting on any of this information.

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In addition to our regular guest bloggers, Inside Internal Controls blog published by First Reference, provides occasional guest post opportunities from various subject matter experts on the topics of risk management and best practices in finance and accounting, information technology, environmental issues, corporate governance, sales/marketing and operations, not-for-profits and business related issues in Canada. If you are a subject matter expert and would like to become an occasional blogger, please contact Yosie Saint-Cyr at editor@firstreference.com. If you liked this post and would like to subscribe to Inside Internal Controls blog click here.
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