Protecting a Business Name
This blog post is not legal advice and is for general informational purposes only. Always speak with a lawyer before acting on any of the information contained herein.
Picking a business name is often one of the first steps an entrepreneur takes when planning to form a new business. Among many other things, having a good name allows a business to develop goodwill with the public. Consequently, clients often ask us what can be done to protect a business name so that any goodwill earned by the name is not subsequently lost. This blog post will highlight some of the most important steps in preserving a name for an intended or existing business.
Register Name with the Registrar of Companies
In BC, companies must register their name with BC Registry Services before beginning operations under that name. Registering an intended business name with the BC Registry Services reserves the name in BC for 56 days. Clients are often surprised to learn that an intended business name can be reserved with the BC Registry Service before incorporation of the company which will take that name has even occurred. This means that even if you’re not yet ready to incorporate your business as a company, you can still protect your intended company name from being used by other intended new companies, so long as you incorporate within 56 days of registering the name. If you can’t incorporate in time, name reservation extensions are available on request, but the request must be made before the 56 days expire.
Registration of an intended business name with BC Registry Services is an essential step in protecting a business name if you plan to incorporate, but it’s important to note that registering a name does not give you a proprietary interest in the name. If someone else has a registered trademark in the name, or there is a prior user of the name, the name registration can be challenged. Furthermore, operating under another business’ name can result in a costly trademark infringement lawsuit, so always obtain the help of a lawyer when verifying that your name is an original one. Registration alone won’t guarantee that your name is original and is not a defence to a trademark infringement lawsuit.
There are many requirements and rules when registering a name with BC Registry Services and the requirements and rules vary depending on the type of company or organization that will use the intended name. A lawyer at Segev LLP can help you craft a business name that will receive approval, and protection, from BC Registry Services.
Trademark Your Business Name
A business name can also be protected by registering the name as a trademark. Unlike name registration with BC Registry Services which only protects a name from being used by other businesses in BC, trademark registration protects a name Canada wide. This comes with an important caveat. While it is true that trademark registration of a name prohibits other businesses and individuals from using that name in Canada, the prohibition’s scope is limited to use of the name on similar products or services. This means that it is possible for another person to use your trademarked name, so long as it is in a different context. Note also that if it turns out that someone was already using a similar mark in Canada on product or service similar to yours before your trademark registration, your trademark can be expunged.
Trademark registration is a lengthy process. Obtaining registration can take between one to two years from the date of filing the application. Trademark applications are complex, so we suggest that clients obtain assistance from a qualified trademark agent. A declined application can cause years of delay and possibly the loss of the ability to use a name that has become associated with your business’ brand.
A trademark can be lost if you don’t protect its distinctiveness. Protecting a trademark’s distinctiveness is accomplished by using the mark appropriately and stopping others from using it. If you allow other businesses or individuals to use your trademark without proper controls in place, you risk losing your trademark protection. A lawyer can help you prevent other businesses from using your trademark.
“Doing Business As” Names
Sometimes corporations, partnerships, or proprietorships want to do business under a different name. This is known as a “dba” name or a “doing business as” name. Registration of the dba name does not provide trademark protection for that name; however, it does provide evidence of prior use of the name which can be helpful if you later wish to trademark the name or find yourself in a trademark dispute.
Be careful using dba names as they are legally insufficient in many circumstances. As explained in the next section, failure to use your business’ full corporate name can often lead to personal liability.
Using Your Business Name
If your business incorporates as a company, it must use its full corporate name, including “Ltd.” or “Inc.”, in most instances. A dba name is typically not an appropriate substitute for a business’ corporate name. To give just a few examples, a company must display its full corporate name at every place it carries on business, on all its notices and official publications used in BC, and on all its contracts, business letters, orders for goods, invoices, statements of accounts, and receipts. The list of places that the full corporate name must be used is extensive, so if you are unsure whether the full corporate name is required a lawyer can assist you. Failure to use the full corporate name can open directors and officers of the company up to personal liability.
Protecting a business name is vital to the success of a business and shouldn’t be an afterthought. If you want to know more about how to register or protect a business name, one of the lawyers at Segev LLP will be happy to help you.