By Richard Stobbe

A interesting Report on Business article by the founder of a Canadian business is useful as a cautionary tale about brand confusion (see: I was outraged when Sobey’s rebranded its chain with the same name as my company). The author of the article tells of her struggles when grocery chain Sobeys launched a brand - FRESHCO – that was identical to the name of her then 15-year old company, also named FRESHCO.  It sounds like a frustrating experience. In particular, the author notes that her company was “federally incorporated across Canada, and not trademarked,” leaving her with no legal options to prevent the entry of Sobey’s FRESHCO brand for grocery store services. For small business owners or start-ups, this might be worth examining with a legal lens:

• First, it’s important to remember that incorporation is completely different from trademark registration. One is creation of a corporate entity, and one is the registration of a brand name. The corporate name sometimes (but does not necessarily) mirror the core brand name of the business. A corporate name is no guarantee of anything in the trademark realm.
• Next, don’t forget that trademark rights are based on use in the marketplace, and a business generates certain trademark rights even without taking the step of registration at the Canadian Intellectual Property Office. In other words, a  business can defend common law trademark rights based on past use even in the absence of a registered trademark. It’s just harder than with a registered mark.
• A registered trademark provides stronger rights across Canada, and that kind of brand protection should always be considered by business owners as part of their investment. Even after an incident like the one described by this author, it’s open to the earlier user of the mark to apply for registration, even after many years of “unregistered” use.
• In this case, the Sobey’s trademark FRESHCO for grocery services is in a different channel of trade than the author’s FRESHCO mark for construction services. Trademark law permits similar or even identical marks to co-exist, so long as consumers aren’t confused. Think of DELTA for hotel services and DELTA for faucets. Identical marks, different channels of trade. There is actually nothing improper about that, as frustrating as it may seem to the earlier user.

The author appears to have used this as a positive opportunity to reinvest in the brand and refocus the company’s marketing message. If this kind of thing happens to your business, ensure that you get legal advice from an experienced trademark lawyer on your options as you make decisions for your company.

Calgary – 07:00 MST