Clancy PC, Intellectual Property Law, Paula Clancy, Trademarks, Canadian IP, @CanadianIP, IP
By Nitin Gomber and Paula Clancy
Business owners assume that incorporating a company is enough to secure a name and/or brand. Not so. NUANS searches done prior to incorporation only offer limited information as to potential trademark obstacles that could arise. Also, securing a corporate name does not guarantee that the name is available for use as a trademark. Provincial Ministries shift the onus of clearing a corporate name for use in commerce to business owners and specifically note that the incorporation of a company is not a defence to an infringement claim.
If the corporate name you have selected turns out to be confusingly similar to a trade name or trademark that was already in use in Canada, you could run into issues. A recent case provides some insight in this regard. In Hidden Bench Vineyards & Winery Inc. v. Locust Lane Estate Winery Corp. 2021 FC 156, an Ontario winery incorporated under the name "Locust Lane Estate Winery Corp." was sued by another winery, Hidden Bench Vineyards & Winery Inc., that had been selling wines under the brand "Locust Lane" for several years. Hidden Bench argued that while its LOCUST LANE trademark was unregistered, it still had common law rights by virtue of its prior use, and that the use of the trade name "Locust Lane Estate Winery Corp." would lead to confusion with Hidden Bench's goods in the marketplace.
Although the case was decided in Locust Lane's favour because the court determined that "Locust Lane" had geographic significance (i.e. it was the name of the road on which both wineries were located), and therefore could not function as a trademark, this is nonetheless a cautionary tale for businesses. Had the words not had geographic significance, the outcome would have likely been much different. Either way, both companies spent considerable amounts litigating this issue before the Federal Court.
To avoid these types of issues, it is strongly advisable to conduct comprehensive trademark availability searches prior to adopting a trade name or trademark. Searches will help you identify whether there are registered and unregistered trademarks, trade names, domain names, social media handles or other problematic references that could lead to issues down the road. The thoroughness of a comprehensive trademark search, properly analyzed by a trademark lawyer, can help you avoid liability at a relatively nominal cost, when compared to the costs of litigation.
For further information on trademark searching, please contact us.
Clancy PC, Intellectual Property Law, Paula Clancy, Trademarks, IP