One of the most common misconceptions surrounding the law of trademarks in Canada is how trademarks relate to trade names. This misconception can have very costly consequences.

Trade names are used to identify a business or a company. Trade names are the “who” of the business. Customers do business with a business bearing the trade name.

Trademarks are used to identify products or services. Trademarks are the “what” of the business. Customers buy products and services bearing the trademark.

In very simplistic terms, customers buy trademarks from trade names.

Every business registered with the Registrar of Companies or incorporated (provincially or federally) has a trade name. But neither the reservation of a corporate name nor the formation of a corporation create a right to use the business name of the corporation in that jurisdiction.

How can that be? The government registers my business name and I can’t use it? Yes. Unfortunately, corporate registries don’t really check if the name submitted for the registration violates any prior rights. In other words, just because a provincial corporate registry approved your name for registration does not mean that you don’t violate someone else’s prior right (in a trade name or a trademark) and that you will not be compelled to change it in the future.

Rights in corporate names are treated like rights in unregistered trademarks, which means that they are nonexistent outside the geographical areas where the business is actually making use of and it known for its name.

Even if you register a corporate name that no one else had thought of before, it does not give you the right to stop others from using it, unless you can prove that other person’s use of the name creates confusion.

Just because you came up with a fancy company name that helps you attract customers for whatever products or services you are offering does not mean that your name, or brand, is a trademark. If you are not using your trade name as a trademark, your don’t have trademark protection for your trade name.

Trade name can be registered as a trademark, but only if you use it as such, that is, to identify products or services. This is often referred to as using the trade name as an adjective, as opposed to a noun.

Let’s say, your company is called Awesome Software Inc. and you make software. If you phrase your marketing materials to say that “Awesome Software Inc. offers such great titles as Text, Calculator and Presentations”, you are using “Awesome Software” as a trade name. If you phrase them to say “We offer Awesome Software™ Text, Awesome Software™ Calculator and Awesome Software™ Presentations”, then you are using “Awesome Software” as a trademark.

The classic example is, of course, Microsoft® Windows®. We don’t buy Microsoft, we buy from Microsoft. But because “Microsoft” is a part of the name of the product we buy (and part of the reason why we buy it), it is also protected as a trademark in its own standing.

If you believe that a substantial number of your customers are attracted to your business because of your trade name, you should consider using the trade name as a trademark and getting it registered as a trademark.

In other words, if you consider your trade name a factor that gives you a competitive advantage, you should not rely merely on registration of the company name with the Registrar of companies. You should accord the asset that you care about the protection that it deserves, and the only way to do it is through registering it as a trademark.