Do I Have a Trademark or a Trade Name? – What’s The Difference?

Many people confuse trade names and trademarks and think they acquire trademark rights by virtue of having a trade name. It should be noted that the only way to acquire exclusive rights to your trademark is through registering it with the Canadian Intellectual Property Office.

A trade name is basically a name under which a proprietor or company uses for trading commercially its products or services and/or to promote its brand. Oftentimes, a trade name is used when the incorporating jurisdiction of the company will not approve the use of the trade name as the company’s legal registered name, typically because it does not include a required distinctive element, descriptive element and/or prescribed suffix. Generally such trade name registrations do not confer any proprietary rights to the name, and simply enable the public to ascertain who is using a particular trade name.

The name the business uses to market its products and services is called a trademark. A trademark (or brand name) is the device which identifies the particular goods made, or services provided, and sold by a business. A trade name may itself incorporate a trademark, or may itself be used as a trademark (to denote the origin of goods or services, as opposed to being a name) and may therefore be registrable and enforceable as a trademark. The trade name and the trademark of a business may be one and the same thing, but unless a trademark is actually registered, the protection afforded to trade names only is far less than the protection afforded to a registered trademark. If a business does not apply for a trademark, they may leave their trade name exposed to infringement claims of other trademark owners who may claim prior rights to the same or a similar trade name.

In terms of defending your trade name, the owner of a trade name is entitled to bring an action for what is called “passing off” against a person that uses a trade name that is likely to cause confusion between the businesses of the parties. The owner of a registered trademark has the power to sue potential infringers for trademark infringement.

Trademark registration is not mandatory in Canada but does provide many significant advantages, including the following:

• Registration is direct evidence of ownership;
• In a dispute, the registered owner does not have to prove ownership; the onus is on the challenger. Use of an unregistered trademark can lead to a lengthy, expensive legal dispute over who has the right to use it;
• A registered trademark can be enforced throughout Canada, regardless of whether it is being used or enjoys goodwill in any particular area. An unregistered trademark can be enforced only in those areas where it has actually been used sufficiently extensively to establish goodwill;

As stated above, the owner of a registered trademark may initiate legal action for infringement proceedings and may make a claim for damages. The owner of an unregistered trademark may not initiate trademark infringement proceedings, but must rely on common law "passing off" proceedings, which subject a plaintiff to a much more onerous burden of proof and will only result in the other party having to refrain from using the confusingly similar trademark.