Legal issues for teachers and students with background information and teaching resources.
The Name Game
- The trials and tribulations of naming a business
By Chelsea D. Wilson
At first glance naming a business appears to be an easy task, but you actually need to do more than just create a name that is a clever word or phrase. You need to not only ensure that the name meets corporate registration requirements, but also that the name does not infringe on any existing trade-marks and official marks.
Unfortunately, the company “Olympic Pizza,” a pizza restaurant located in Vancouver, is learning this the hard way. The owner of Olympic Pizza was asked to take down a sign on his storefront featuring the Olympic rings and torch and bearing the company’s name, on the ground that the sign infringes upon the “Olympic” mark. This paper takes a look at some of the naming requirements you should consider if you decide to establish your own business, and how you can prevent your business from being tossed in the oven with Olympic Pizza.
2. Corporate registration requirements
A. Choice of business entity
The type of business you choose to operate will determine what name requirements your business must satisfy. In British Columbia, you can choose to operate your business as a sole proprietorship, a partnership or a corporation. Since corporations are small business owners’ business vehicles of choice, I will focus on the name requirements that pertain specifically to corporations.
B. Choice of jurisdiction
In British Columbia, you have a choice between incorporating federally under the Canada Business Corporations Act, R.S.C. 1985, c. C-44or provincially under the Business Corporations Act, S.B.C. 2002, c. 57.
If you choose to incorporate provincially, you can still do business in provinces other than British Columbia, but before you do so you have to register your company in those other provinces. If the name you are incorporated under in British Columbia is similar to the name used by a company already operating in another province, then you will not be able to register and do business in that other province under the name you are using in British Columbia. Instead, you will likely have to reserve and use an assumed name in order to do business in these other provinces.
The situation is different if you incorporate federally. A federally incorporated company can use the same name in each province, even if another provincially incorporated business is already using a similar name in a province the federally incorporated company wishes to do business in. A federally incorporated company does not even need to have its name approved by each province in which it does business.
C. Choice of name
Since most small business owners choose to incorporate provincially, I will discuss the naming requirements established by the British Columbia Business Corporations Act.
The first step in incorporating a business under the Business Corporations Act is naming the corporation and reserving the name with the Registrar of Companies. In order to have the Registrar approve the name, the name must not be identical or similar to any existing corporation’s name in order to prevent the name of your company from confusing or misleading the public.  You can conduct a Newly Upgraded Automated Name Search (“N.U.A.N.S. search”) prior to submitting your name request in order to increase the chances that your selected name will be approved. A N.U.A.N.S. search is a search of a database containing the names of all federally and provincially incorporated corporations, business names registered in all provinces except British Columbia and Quebec, and all applied for and registered trade-marks. N.U.A.N.S. compares a proposed corporate name or trade-mark with databases of existing corporate bodies and trade-marks. This comparison determines the similarity that exists between the proposed name or mark and existing names in the database, and produces a listing of names that are found to be most similar. You can conduct a N.U.A.N.S. search at <www.N.U.A.N.S..com/searchhouse/search_house.html>.
The name you choose must contain a distinctive element, a descriptive element and a corporate designation. The distinctive element forms the first part of the name and enables the public to distinguish one company from another. The distinctive element can be a distinctive word or phrase, such as a coined word, a personal name, or a set of initials (eg. C.D.W.’s). The descriptive element is the second part of the name. This element must describe the type of business the corporation will be carrying on (eg. Ice Cream Parlour). The last part of the name is the corporate designation (eg. Limited, Ltd., Corporation, Corp., Incorporated, or Inc.).  There are certain words you should avoid in your selection of name in order to prevent the Registrar from rejecting your name. Do not include a word in the name that suggests a government connection (eg. Government, Ministry, or Board), suggests a connection with the Crown or royal family (eg. Queen), is obscene (pick your own example!), or is well-known (eg. Coke).
You can request a number name for your company (eg. 78655 B.C. Ltd).  The corporation will be assigned the next available certificate of incorporation number, and the number will be used as the distinctive element of the name. If you choose a number name then a name reservation is not necessary.
If you are starting up a business on the Internet you should make sure the name qualifies as both a corporate name and an Internet name if you want the names to be similar. Usually if the Internet name has both a distinctive and descriptive element, then the name may be approved by the Registrar just by adding the corporate designation (eg. Ltd.). It is easy to find out what domain names are available; just log on to the internet and type in the domain name you want, or check out possible domain names at www.checkdomain.com.
Once you have chosen a name, you must fill out all the requested information on the Name Approval Request form obtained from the Corporate Registry or Canada/British Columbia Services Society, and submit a list of three names in order of preference (in order to avoid repeated requests if one name is rejected) to the Registrar for approval, along with the prescribed fee. At the time this article was written the fee to approve and reserve a name was $30, but a current schedule of fees can be found on the Corporate Registry website at <http://www.fin.gov.bc.ca/registries/corppg/crfees.htm>. Once the Registrar has approved one of your names, the name will be reserved for you for 56 days  during which time you must complete all the other tasks necessary to incorporate your company. If your application is not completed within the 56 day period, then someone else may claim the name. However, if you cannot complete the incorporation on time due to some unforeseen delay, the Registrar may reserve the approved name for a further 56 days upon receipt of an additional request in writing and a further fee. 
3. Avoiding trade-mark and official mark violations
In selecting your business name you should try to avoid infringing existing trade-marks and official marks. Below, I refer to trade-marks and official marks collectively as “marks.”
A. Trade-marks generally
Generally speaking, a trade-mark is a symbol used to distinguish the goods and services of one person from those of others in the marketplace. Trade-marks include word marks like “General Motors,” design marks like McDonald’s Golden Arches, package shapes like the Coca-Cola bottle, non-visual marks like a combination of musical notes, certification marks like the C.S.A. mark of the Canadian Standards Association, and geographical indications like Canadian Rye Whisky.
Although it is a good idea to register a trade-mark, trade-marks do not have to be registered in order to be protected. An unregistered trade-mark may be protected at common law in areas where use and/or advertising of the trade-mark have made the trade-mark “known” in those areas. A registered trade-mark receives broader protection, as valid registration of the trade-mark in Canada grants the owner the right to the exclusive use of the registered trade-mark throughout Canada in connection with the wares and services for which the trade-mark has been registered. As well, a registered trade-mark gives the owner the right to prevent others from selling, distributing or advertising wares or services in connection with a trade-mark which might be confused with the registered trade-mark.
Trade-mark law is governed by laws at provincial, national and international levels. Just as there are many sources of law governing this area, there are many different ways of violating a trade-mark, including by way of passing off, unfair competition and infringement. Passing off and unfair competition actions are available to the owners of both registered and unregistered trade-marks,  whereas infringement actions are only available to the owners of registered trade-marks. 
An action in passing off is basically an action to protect the goodwill (i.e. the reputation, good name and connections of a business)  symbolized by a trade-mark. Generally, a trademark owner can bring an action in passing off if someone misrepresents their goods and services as those of the trademark owner’s or as sponsored by or associated with those of the trademark owner’s.  For example, a restaurant server who serves you a glass of Pepsi when you request a glass of Coke is passing off Pepsi for Coke. 
A person may be found to be “unfairly competing” with a trade-mark owner in a variety of situations. The prohibition on unfair competition prevents a person from making false or misleading statements which discredit the product of another, from directing public attention to his or her product in a way that confuses it with that of another, and from doing any other acts contrary to honest industrial or commercial usage in Canada.  Unfair competition also encompasses situations of passing off, like those described in the preceding paragraph.
As noted above, an action in infringement is only available to owners who have registered their trade-marks with the Registrar of Trade-marks. Infringement occurs where a person who is not entitled to use a particular trade-mark uses that trade-mark or a confusing trade-mark in association with the sale, distribution or advertisement of wares or services.
B. Official marks generally
Official marks, like the word “Olympic,” are not technically trade-marks, even though they function in a similar way. Owners of official marks may themselves use and protect them, and may also license others to use and protect them. For example, the International Olympic Committee, as the owner of Olympic official marks under the Olympic Charter, licenses the use and protection of these marks to the Canadian Olympic Committee (the “C.O.C.”) -- formerly known as the Canadian Olympic Association (the “C.O.A.”).
Official marks are not registered in the same way that some trade-marks are. Rather, an entity that meets the criteria for recognition as a public authority simply informs the Registrar of Trade-marks that it has adopted a particular mark and requests notification of this adoption in the Trade-marks Journal. Once the official mark is published in the Trade-marks Journal, no one can adopt that official mark or one similar to it (as a trade-mark or official mark). Unless the public body’s consent is obtained, no one other than that public body can start to use that official mark in association with any goods or services whatsoever. Unlike regular trade-marks, official marks do not have to be associated with specific wares and services to be registered and enforced.  Also, once public notice has been given of an official mark’s adoption and use, there is no procedure to remove the mark due to lack of use or indistinctivenes  – i.e. it is very difficult to invalidate an official mark. However, a person who was using a trade-mark that is identical or similar to the official mark prior to the official mark being published in the Trade-marks Journal may continue to use that trade-mark for goods and services for which the trade-mark has been used and registered, but not for any new or additional goods or services. 
The C.O.A., as a public authority, first successfully requested that public notice of the C.O.A.’s use of official Olympic marks be given in 1975. At that time, the 1976 Olympic Act declared the C.O.A. to be a public authority for the purposes of the Trade-marks Act. After the repeal of the 1976 Olympic Act, the C.O.A. requested that public notice be given for other official marks. Although this request was initially denied by the Registrar of Trade-marks on the ground that the C.O.A. was not a “public authority,” the Federal Court of Appeal ruled that the C.O.A. was indeed a “public authority” entitled to request the publication of official marks. It should be noted that there is a debate going on amongst scholars as to whether the C.O.C. still qualifies as a public authority, because there have been changes in the interpretation of the Trade-marks Act and in the structure of the Canadian Olympic Committee since the courts last ruled that the C.O.A. was indeed a public authority.
As a public authority, the C.O.C. has been aggressively protecting Olympic official marks for decades. The C.O.C. has been able to restrain a company from selling a denture-cleaning product using an infringing mark, and has been able to get injunctions against companies that would benefit from trade-marks resembling Olympic marks, even where the benefits were unintended. Three peculiarities of official mark protection are particularly relevant to the Olympic Pizza scenario: first, the C.O.C. does not have to prove injury in order to stop someone from using a mark resembling an Olympic official mark; second, the C.O.C. does not have to prove that the infringer intends to benefit from use of a mark resembling an Olympic official mark; and third, the C.O.C. does not have to prove that the infringer is using a mark resembling an Olympic official mark on goods that are related to Olympic wares. Therefore, Olympic Pizza can be restrained from using the official mark “Olympic,” along with the Olympic rings and torch, on its business sign despite the facts that the C.O.C. may not be harmed by Olympic Pizza’s use of these marks, that Olympic Pizza may not intend to make money off its use of these marks, and that Olympic Pizza would be using these marks in association with the sale of pizza rather than in association with “Olympic wares.”
The dispute over Olympic Pizza’s use of the mark “Olympic” centers around the concern that other companies in Vancouver are being allowed to use the Olympic marks in exchange for their support of the Olympics and that it is not fair that Olympic Pizza, although it is not contributing to the Olympics, still gets to use the “Olympic” mark for free. One of the reasons companies pay to become involved with the Olympics is because it gives them the right to use the Olympic logos, which use, in theory, increases their own companies’ revenues. In the past, sponsors have been willing to spend millions of dollars for the right to use the Olympic logos in association with their own businesses. It is unlikely that millions of dollars will be raised in association with the Vancouver 2010 Olympics if companies see no need to pay for the use of Olympic properties because other companies are using them for free.
Recent reports indicate that the Vancouver Olympic Organizing Committee, the body now policing the marketing of the Olympic properties in Vancouver, may allow Olympic Pizza to continue using the word “Olympic” in its name, but will prohibit it from using the Olympic rings and torch on its sign.
C. Avoiding names which violate trade-marks and official marks
When searching for trade-mark and official mark violations it is important to also look up spelling variations of your proposed business name. This is because your selected name may violate either type of mark even if it is simply pronounced the same as an existing mark.
There are numerous sources available for searching existing trade-marks. The N.U.A.N.S. search you should do when you incorporate your business should also provide an initial indication of trade-marks that might conflict with your proposed business name. A preliminary search of the Canadian Trade-marks Database on the Canadian Intellectual Property Office website will help you determine whether trade-marks similar to your proposed business name exist. The Canadian Intellectual Property Office website also has a link to the Trade-marks Journal, which is another good place to search. Other trade-mark journals, as well as trade publication and newspaper database services, are other good places to look.On the Canada 411 website, you can search a database of incorporated businesses in Canada with business lines. Searches of the Yellow Pages website and major search engine websites (like Google or Metacrawler) can also give you a good indication of whether other businesses are using names which are the same or similar to the one you want to use. Remember that if you intend to conduct business on the internet, it is a good idea to search internet domain name registries, and that if you think there is a possibility your business might expand into the United States, you should also conduct trade-mark searches in that country.
Since official marks are not noted on the trade-marks register, it is much harder to determine whether or not your proposed business name will infringe a published official mark. You can search for official marks published in the Trade-marks Journal on the Canadian Intellectual Property Office website. However, if you suspect the name might infringe a published official mark, it would be a good idea to hire a professional search firm to do a more detailed search for you. In fact, given the numerous searches you should conduct regardless of whether you are searching for possible trademark violations, possible official mark violations, or both, you might choose to do as many entrepreneurs do; that is, employ a trade-mark search agency to conduct these searches for you.
There are many reasons why you want to choose a name that does not infringe on any existing marks. If the name of your business conflicts with an existing mark you could end up getting sued and potentially losing your business name. There is often a lot of value tied to the name of a business that can be lost if the you are later required to change the name of the business; this value, often referred to as goodwill, usually results from people associating your business with the excellent product or service you provide. A name change also requires you to fill out many forms and to pay the applicable fees. If you are changing a corporate name, you will have to prepare and file articles of amendment, and obtain a new N.U.A.N.S. search. Whenever you change the name of any type of business, you will usually incur the additional costs of notifying customers and suppliers of the name change; changing telephone book, association, and other listings; changing letterhead, signs, and other advertisements; and changing all the bank accounts. Of additional concern is the possibility that an updated N.U.A.N.S. search might prevent you from using the new name you seek to use. These problems can be avoided by making your initial name choice with care.
 Trademarks Act, s. 7; Walt Disney Production v. Triple Five Corp. (1992), 43 C.P.R. (3d) 321 at 341-343 (Alta Q.B.), aff’d (1994), 53 C.P.R. (3d) 129 (Alta C.A.); Intellectual Property Disputes, supra at 2.6(a); Roger T. Hughes & Toni Polson Ashton, Hughes on Trademarks, looseleaf (Markham: LexisNexis Canada Inc., 1984, last updated 06 January 2005) at para. 75.
 Carolyn Tate, “Official marks can be your corporation’s secret IP weapon – Absence of regulation makes official marks attractive means to establish IP rights” The Lawyers Weekly, Vol. 18, No. 8 (26 June 1998);