One of the first steps in starting a business is naming it. For many businesses this involves registering the business with local authorities and/or incorporating the business. Owners may elect to register their business name as a trademark for various reasons including protecting the name against 3rd party use and enhancing the assets of the business. However, some business names may be unregistrable as a trademark in Canada.
The nuances of trademark law were experienced first hand by the owner of a dental practice in Lum v. Dr. Coby Cragg Inc., 2015 FCA 293. Dr. Cragg operated a dental practice under the trade name “Ocean Park Dental Centre” for several decades. The practice was named after Ocean Park, the area of South Surrey in which the practice was located. In 2012, Dr. Cragg applied for a trademark registration for OCEAN PARK, associated with dental services. A registration for the mark issued on 28 November 2013.
In 2014, Dr. Cragg brought an action for trademark infringement in the Supreme Court of British Columbia against Dr. Lum, who operated a dental practice nearby under the trade name “Ocean Park Village Dental” and, later, “Village Dental in Ocean Park”. In response, Dr. Lum brought his own action in Federal Court to have Dr. Cragg’s trademark registration declared invalid and struck from the Register of Trademarks. Dr. Lum’s Federal Court action was ultimately successful following an appeal to the Federal Court of Appeal, and the OCEAN PARK trademark registration was declared invalid for being clearly descriptive of the place of origin of the owner’s services, contrary to section 12(1)(b) of the Trade-Marks Act.
Since Ocean Park is clearly a geographic location and the services are provided within that geographic location, the Federal Court held that Dr. Cragg would only be entitled to register the mark OCEAN PARK if the mark had acquired distinctiveness as of the date of filing the application. By “distinctiveness” it is meant that the mark needed to have developed a degree of recognisability in the eyes of the relevant public separate from its character as an indicator of geographic origin. However, upon review of the evidence the court determined that the mark had never acquired the necessary distinctiveness.
The OCEAN PARK case provides a cautionary tale for business owners who are considering or may already have a business name or trade name that includes the geographic location of their business. While it is possible that such a business name or trade name could develop the necessary distinctive character to be registrable as a trademark, it may take years of extensive use and promotion to develop this distinctive character.
Unfortunately, this situation may appear confusing to those who have reviewed the government of British Columbia’s webpages on registering business names. On one of these pages is a description of rules for business names and a formula for how to select a name that might be approved. The formula recommends developing a name combining a distinctive element, a descriptive element, and the necessary corporate designation.
The webpage suggests that for a distinctive element an applicant can use a coined word, a geographical location, or a personal name. For those business owners who continue on to use their registered corporate name as their trade name, this may create a trap whereby they are unable to register their business name as a trademark. Prospective business owners should take care to understand that while a geographical location may be a distinctive element for the purposes of incorporating a business, it may not be distinctive for the purposes of trademark registration.
by John H. Lambert