Cast wide net when conducting incorporation name searches
By AdvocateDaily.com Staff
Lawyers for entrepreneurs and start-ups looking to incorporate must look further than their client’s own backyard
s to ensure the proposed name isn’t already taken, Toronto intellectual property lawyer Taras Kulish tells AdvocateDaily.com.
Kulish, a senior associate with Steinberg Title Hope & Israel LLP, says he just wrapped up a matter for an Ontario, high-end, niche furniture retailer who discovered an Alberta store recently opened with the same name with two extra descriptor words.
“Thirty years ago, you might have been able to argue that the businesses, while similar, were located far enough apart that the consumer wouldn’t be confused,” he says. “You could argue there was no passing off” — essentially when a new brand tries to capitalize and monetize the goodwill built up by an established brand.
However, in an age where established and start-up brands are using social media such as Facebook, Instagram and Pinterest to drive consumers to online stores, that argument no longer holds water, Kulish says.
“The Alberta company’s counsel should have undertaken a wider search, even starting with a simple Google search. Instead, they simply checked the register in Alberta through a NUANS search and found the name was not taken in that province and that there was no trademark registration or application with CIPO,” he says.
“This isn’t a case of two roadside cafés, one in Manitoba and the other in Nova Scotia, with the same name,” Kulish says. “This is a specific type of business, home furnishing and home decor, which reaches a niche market of well-heeled customers using both its bricks-and-mortar location in Ontario and its online store.
“Of course, the established business wants to protect its brand and revenues through online sales with delivery across North America,” he adds.
The Alberta retailer’s counsel believed there was no obligation to verify beyond a NUANS search and the borders of their province. Their client had invested heavily in the store name and branding and wasn’t inclined to change. All of that was money wasted for lack of a Google search that would have revealed Kulish’s client in Ontario. A little bit more digging on social media would have shown this retailer’s sophisticated online marking and sales campaigns with reach across North America, he says.
Kulish says the matter was eventually settled in his client’s favour, but required significant expenditure on legal counsel for both retailers.
He says it’s a cautionary tale for both prospective business startups as well as their lawyers.
“You can’t just look locally,” he says. “Today, many bricks-and-mortar stores also operate an online business. It doesn’t matter if you’re in a different province, or even somewhere else in North America.
“You have to expect that you’re competing across the continent, if not globally,” Kulish says. “And with that context in mind, any searches for business and brand names have to go further than in the past and extend to common law usages of a name or brand."