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Clients often express confusion between the use of trade-names, registered under provincial legislation, and trade-marks registered under federal legislation.

This article will attempt to resolve some of the confusion.

Under the Partnership Act, a person may register the use of a trade-name. The person may be an individual, a partnership or a company. So, if a company is carrying on business under a trade-name such as “ABC Aardvark Consulting”, it can simply use this trade-name on its correspondence, advertising materials, contracts etc. The company is not required to set out its full company name. Anyone dealing with “ABC Aardvark Consulting” can conduct a trade-name search and learn that Company A is using this trade-name.

Registering a trade-name under the Partnership Act has two advantages over not registering the name at all. First, by giving notice to the world that Company A is using the trade-name, someone who attempts to use the name associated with a competing business may be precluded from incorporating with the name and may subject themselves to a potential lawsuit for “passing-off” if they use the name in association with a competing business.

Second, by giving notice to the world that Company A is using the trade-name, an individual with Company A that sings for “ABC Aardvark Consulting” will be taken as signing for Company A and not for himself. This is important. If Company A has not registered the trade-name and an individual signs using the trade-name, the individual might inadvertently attract personal liability.

A trade-mark under the Trade-Marks Act has all of the benefits of registering a trade-name plus one large advantage. If someone breaches your trade-mark, the Trade-Marks Act offers much better protection. One of the main reasons for trade-mark legislation was to correct for the inadequacies that existed under the common law related to “passing-off”. For example, in a lawsuit for passing-off, the claimant must show actual use of the trade-mark/trade-name in geographical area. Under the federal legislation, the owner of the trade-mark can enforce the trade-mark anywhere in Canada without having to show use across the country.

So why not just register a trade-mark? Registering a trade-mark is expensive and takes several months to accomplish. By comparison, registering a trade-name under provincial legislation is inexpensive and immediate. Depending on a client’s individual circumstances, a trade-name under the provincial legislation may be adequate. In other circumstances, registering a trade-mark under the federal legislation may be the right business decision.