How to protect your company's name

Naming a business, or branding a product, is an extremely important task, with the name often becoming the 'identity' of the company in the eyes of the target market. Once a name has been selected, the next step for companies is often to register the name as a trademark for protection. Each year the Canadian Intellectual Property Office receives approximately 45,000 applications for trademarks.

A recent injunction, however, provides a useful reminder of what it does and does not mean to trademark a brand, as well as what businesses need to consider when deciding on a name for their company.

Woodpecker Hardwood Floors (2000) Inc. had been in business for 13 years but had not trademarked its name. This year, Wiston International Trade Co. Ltd., began selling hardwood flooring products branded with the name "Woodpecker" – a name it had only trademarked in January.

Even though Wiston had registered "Woodpecker" as a trademark for hardwood flooring, Woodpecker obtained an injunction preventing Wiston from using the name Woodpecker in association with hardwood flooring products until the matter had been brought to trial.

The basis for the injunction was that Woodpecker had acquired rights to exclusive use of the "Woodpecker" brand in association with hardwood flooring products in the local market through its prior use of the name. The fact that Wiston had recently registered "Woodpecker" as a trademark did not override Woodpecker's rights, or take away its entitlement to exclusive use of the name. The fact that the Court found that Wiston had trademarked the name while aware of Woodpecker's prior use was likely also persuasive.

This case offers many lessons for companies looking for a name or to rebrand:

• Do your research before you name a company
  Before deciding on a name, it is critical that you do your research to ensure the name selected is original and available. As this case shows, if there is another company with a similar product or service in your geographical area that is already using a similar name, you may find you are prevented from using it – and possibly after you have already started to do so. Research should include a search of registered trademarks, a corporate search, and market research. For the first two, consider hiring a lawyer to determine the availability of a name.

• Don't assume that just because a name is not trademarked, it is not someone else's name
  If a party is using a name or brand that it has not trademarked, that name will not come up in a search of the trademarks database. Accordingly, while registration of a trademark has numerous advantages, it may not be an ironclad guarantee of an exclusive right to use the mark, as the Woodpecker case showed. This is particularly true where a company knows about the existing, unregistered mark, and proceeds to register it for itself.
  Make sure that the due diligence with respect to a potential business name covers more than just what has been registered as a trademark, and captures what other brand names are in use for the specific market.

• Understand that trademarking is ultimately to protect the customer, not the business
  While trademarks are of immense value to businesses, they have their origins in consumer protection, and a key consideration in registration, and enforcement of trademarks is avoidance of consumer confusion. Keeping brands distinct prevents confusion and prevents consumers from inadvertently buying a competitor's or, worse, a counterfeiter's, product.

• Be creative in your naming – find something original
  When launching a new brand, get creative and find a name and concept that are all your own. It will prove worthwhile in the long run, reducing the chance of a legal dispute, and potential inability to use the name, as well as being more memorable for customers.

The bottom line is this: Adoption of a competitor's name, or one so similar as to be confusing, is a risk that trademark registration will not immunize against, particularly when done knowingly. Being the first to trademark a name may not confer exclusive rights to its use if someone else is already using it – especially if they can prove you were aware of it.

Mark Fancourt-Smith is a partner, specializing in trademark protection, at Canadian business law firm Lawson Lundell