By: Tina Walczak & Cam Schreiner
We recently came out of a meeting with a client who was a day or 2 away from launching their company, until a trademarking situation put a halt on it. The issue? Another company, in the same industry, was already using the brand name and had trademarked it in the U.K and the U.S.
They had two choices: apply for the trademark in Canada, which was unlikely to be successful because the other company would likely notice and could block them. Or, they could change their name and apply for a trademark under the new unique name.
What is a trademark?
So, what exactly is a trademark? How do we apply for one? And When do we need one?
In short, a trademark is anything that’s considered a unique identifier.
Think about a product you recently purchased. How do you know which brand you bought it from? Anything that helps you identify where your product originated, from the name of the product to the color of the packaging, could be considered a source identifier—but just because something helps identify the producer, doesn’t mean it’s necessarily something you can trademark.
- Business names
- Service names
- Product names
It’s important to note that you can trademark names, but they need to be more than just descriptive. For example, if you are Johnson & Johnson, and you are making bandages. You can not trademark bandages, but you can trademark Band-aid.
Funny thing is, certain products can gain so much popularity that their trademark name becomes commonly used in place of the original descriptors. For instances, we often refer to a band-aid instead of a bandage and Kleenex instead of tissues.
The importance of Trademark is to protect that unique company, service or product name from being used by your competition & from counterfeit product being produced under a same or similar name.
Why should I Trademark My Brand?
Trademarking protects a logo or name. The important question to ask before trademarking is, could the name be confused with another product? For example, someone could not trademark an Eye-Phone as this could confuse customers of which product they are buying. So, it’s not just spelling, but also how it sounds.
You cannot trademark a name that is descriptive of the service, i.e. “Our Coffee Shop”. It’s best to use words like Kleenex, which are not real words, but as we discussed above, can become synonymous with a product type.
Trademark rights are based on the first commercial use of the name/logo. This means, successful registration does not guarantee you have the trademark.
Whoever uses it first has priority. This is a huge reason why the company we mentioned above would likely be unsuccessful in trademarking the name in Canada.
For news on current trademarking cases, the new: The Toronto Maple Leafs are currently trying to protect their Leafs trademark against “Leafs by Snoop”, a new cannabis company because they are concerned it will devalue their trademark.
Ok, so that’s trademarking, but Incorporating is different. I’ve always thought the 2 went together, so let’s break it down.
What Does it Mean to Incorporate Your Brand?
For all you academics: The act of incorporating creates a new legal entity called a corporation, commonly referred to as a “company.” A corporation has the same rights and obligations under Canadian law as a natural person.
The simple version: To make a business into a corporation, i.e your business is now protected by specific laws.
What are the Benefits of Incorporating?
1. It creates a separate legal entity from yourself and limits liability. What this means is that if someone sues your company, you are protected from personally being sued. In other words, if your company goes under, your personal financial situation stays intact.
2. Lower corporate tax rates & tax benefits – speak to your accountant on how best to structure the company.
3. Better access to capital and grants – We need to work on this
4. Continuous existence. – If you die, your company can live #Legacy
How to Incorporate
The initial cost is $1,200.00, and yearly annual reports need to be filed to keep the company in good standing. Those are about $250.00 ish per year. There are a few ways that you can do it, depending
For business corporations, you can incorporate yourself via the Government of Canada website.
$ 200 (online filing)
$ 250 (paper filing).
Incorporate: Option 2
Our friend Dan reached out and sent us a link to an online company who helps do most of the incorporating legwork They are called Ownr, and they basically are a digital version of your mom. Basically they will hold your hand so you don’t need to do it alone.
Incorporate: Your Third Option
In our opinion, this is the safest option. Hire a lawyer, that way you won’t fuck it up. This costs anywhere between $1200 – $3000. My friends Caia Forgione and Christy Lovig are both incredible lawyers who can help with both Incorporating and trademarking.
Make sure you follow the directions, nothing would be worse than going through all of these steps and then finding out that missed a bunch of steps and don’t get approved. The Government likes to make things hard for us, let’s follow the rules.