I had a discovery call with a potential client this week who was inquiring about trademarks. When I got off the phone, I realized the following: I have to explain the difference between a legal name and a trademark at least once a week. I therefore thought I should take the time to properly answer one of the main questions you should be asking yourself as an entrepreneur in a blog post: does the name you use to present your business really belong to you?
Of course, please take this as legal information and not legal advice. If you have any questions regarding trademarks, send me an email at firstname.lastname@example.org.
Let’s start with the basics: legal name vs trademarks
The first thing that needs to be clarified is that to properly answer this question, we need to distinguish legal names and trademarks.
Your legal name allows you to identify yourself with the government. Your name might be a series of words, but it could also be a series of numbers (if you decide to get a numbered entity).
A trademark is a word (or set of words, images, etc) used in association with your products or services. Trademarks allow you to distinguish yourself from your competitors. To put it simply: it’s your brand. It’s how your customers recognize you.
As a business, you might decide to advertise yourself to your customers by using a name that has nothing to do with your legal name (if you have a numbered company, for instance), but you could also decide to use your legal name as a brand. The two do not have to be identical, but they certainly can be.
This is where things get interesting.
Let’s say you want to call your business XYZ inc. You can simply incorporate under XYZ inc, therefore making sure no one else has the same legal name in Quebec (or on whatever level you decide to incorporate).
But what’s stopping a numbered company from using XYZ as a brand? Nothing.
Using a particular legal name only stops other entities from registering under that same legal name at a specific governmental level. It has nothing to do with branding and trademarks.
Why asking yourself this question is important
If you own a business, you probably already understand the importance of branding. Imagine the following scenarios:
- You find the perfect name, decide to incorporate using that name (therefore making it your legal name), invest in branding only to realize that a numbered company has also been branding itself under that same name for years now.
- You’re thinking about starting a business and decide to incorporate under your perfect name as a precaution. Your project comes to life a year later only to realize that someone else started using your perfect name a month after your incorporation.
You do not want to end up in a situation where you cannot use your name (or where you get sued for using a name) simply because you did not use the right tools to make sure you had exclusivity on it.
How to make sure you have exclusivity over your name
The only way to ensure you have exclusivity over your name in Canada in relation to your products or services is to get your trademarks registered. Doing so will allow you to have exclusivity for 10 years (renewable) and most importantly, to have peace of mind. Normally, a comprehensive research would take place before the start of the registration process to make sure no one else is using your trademark or a similarly confusing one.
For more information about trademarks, you can take a look at this post I’ve written about registration as well as this one about the upcoming modifications to the Trademarks Act. If you need assistance with trademarks registration or legal advice regarding your trademarks, don’t hesitate to send me an email at email@example.com. You can also click the link below to learn more about our services!