VI. Confusion

Table of Contents

• 6.1 Factors to Consider in Determining Confusion
• 6.2 Treatment of Existing Names Which are Famous, Highly Distinctive, or Diluted
• 6.3 Initials and Confusion
• 6.4 Confusion and the Word "Group"
• 6.5 Revival / Dissolution
• 6.6 Confusion with Corporate Names, Trade Names, Trade-marks, and Official Marks
  • 6.6.1 Confusion with Trade-marks
  • 6.6.2 Confusion with Trade Names
  • 6.6.3 Confusion with Official Marks
• 6.7 Overcoming Confusion
  • 6.7.1 Regulation 28 - Consent and Undertaking by a Corporation
  • 6.7.2 Regulation 29 - Consent to a Distinctive Word
  • 6.7.3 Regulation 30 - Successor businesses and Year of Incorporation
  • 6.7.4 Amalgamations and Acquisitions
  • 6.7.5 Failing to Honour Undertaking
  • 6.7.6 Initials and Given Names
  • 6.7.7 Bankruptcy
  • 6.7.8 Names of Canada, Provinces, and Cities Added to Remove Confusion
  • 6.7.9 Canadian Subsidiaries

The proposed corporate name may be found to be confusing with any corporate name, trade name, trade-mark, or official mark appearing on the NUANS® search report.

6.1 Factors to Consider in Determining Confusion

Often, applicants do not supply sufficient information in the name request to properly assess all of the factors under section 25 of the regulations. In these cases the Director can only rely on Regulation 25 (a) and (e) to make the name decision. If the applicant should decide to provide more information, the name decision can be re-evaluated in light of the new facts.

A decision of confusing similarity may be based on phonetic similarity alone.

Applicants should note that federal incorporation does not in itself confer to applicants rights over an existing provincial corporate name or trade name.

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6.2 Treatment of Existing Names Which are Famous, Highly Distinctive, or Diluted

The Director's primary concern in enforcing the name regulations is in eliminating confusion. Nowhere do the regulations enshrine the principle that a highly distinctive name should be protected from dilution. In practice, however, the protection principle complements the principle of avoiding confusion. A company may have a highly distinctive name, i.e. unique and imaginative, being a purely arbitrary creation, e.g. DWIDAG Foods Inc. (for a food wholesaler), as opposed to an obviously derived composition, e.g. CORTIVET (for the manufacture of cortisone veterinarian preparation). Granting the highly distinctive element to a second company, e.g. DWIDAG Stores Ltd. is more likely to generate confusion because this distinctive element is more likely to linger in the mind of the public. Each case, however, depends on its facts and depending on differences of goods, services, territory and clientele, the Director may or may not feel that there is in fact a likelihood of confusion.

The Director does not assume, for the purposes of name granting policy, that any given existing company with a highly distinctive name will develop into a famous conglomerate, dealing in a variety of products and services.

"Famous" names are a case apart. They may originally have been highly distinctive, e.g. KODAK, or alternatively, very lacking in distinctiveness, e.g. General Motors or International Business Machines, but they have acquired high distinctiveness through use. They are generally conglomerates and the Director will not approve any corporate name that uses their distinctive feature.

Some words are so common that they are used as the distinctive element in many business names. Such wide usage dilutes the impact of the business name and gives it a reduced claim to protection. As a general rule, where a distinctive element is highly diluted (low distinctiveness), the same distinctive feature may be used in new corporate names that are only slightly different from the existing names. For instance, a different descriptive word might be all that is needed to distinguish the proposed corporate name from similar existing names, even if the descriptive word describes essentially the same business that is carried on under the existing names.

For example, names such as "Universal Products Inc." or "Universal Bakery Products Inc." would not be prohibited, even though there were existing names like "Universal Food Enterprises Inc.," because the distinctive element "Universal" is highly diluted, and the existing names do not deserve much protection.

Therefore, the guidelines for initial, front-line name decisions (normally without benefit of much detailed information) should be as follows:

Note: Of course even the unavailable names would be available if the companies were related and consent was provided.

Detailed information with respect to products, clientele, territory of existing companies must be provided in writing to facilitate the name decision.

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6.3 Initials and Confusion

There is no hard and fast rule with respect to when a name containing initials is likely to cause confusion. Territory of operations and any other relevant information always has to be taken into consideration. What follows is merely a guideline which assumes that the territory of the existing businesses and the proposed business will overlap and that the applicant has produced no other information showing that confusion is unlikely (e.g. totally different clientele, long co-existence, existing company inactive for a long period).

1. If a distinctive feature is made up of two initials, the proposed name will be considered confusing if:
   
   
   • the descriptive feature is the same or confusingly similar, and
   • the initials are identical and in the same order or if the first initial is the same and the last initial is phonetically similar.
     
     
   e.g. BN Construction:
   • confusing with BM Construction
   • confusing with BN Builders
   • not confusing with BF Construction
     
     
2. If three or more initials make up the distinctive feature of a name, the proposed name will be considered confusing if:
   
   
   • the descriptive feature is the same or confusingly similar, and
   • all of the initials except for the last one are identical, and
   • the initials are in the same order as the initials in the existing corporate name.
     
     
   e.g. ABCD Construction:
   • confusing with ABCF Construction
   • not confusing with DABC Construction
     
     
3. Initials may be acceptable without a descriptive word if the result is not confusing.

Because it is difficult to develop a general policy which applies to each case that arises, some discretion must be used for cases not strictly covered by these guidelines. For example, a name like "BNND Construction" or "BMND Building" would be considered confusing with "BNMD Construction" because M and N are very similar in sound and appearance. "A & M Construction Inc." would be found to be confusing with "ANM Construction Ltd." because phonetically there is a little difference between the two.

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6.4 Confusion and the Word "Group"

Where there are no other unrelated companies with the same distinctive feature (not very high, not very low distinctiveness) as the proposed corporate name, the proposed name would be available without further requirement.

If there are other companies with the same distinctive feature as the proposed corporate name but unrelated to the corporation for which the name is proposed, the applicant must explain why the proposed corporate name will not misleadingly suggest a grouping of those companies.

• the business of the proposed corporation and that of the existing unrelated companies are too different for them to be confused as being affiliated.
• the proposed corporation will be the umbrella company for related companies using that distinctive feature and the proposed name will connote a relationship with them alone.

The addition of a descriptive word (e.g. textile) modifying the word "group" will likely make the proposed name available as long as the descriptive word clearly distinguishes the business of the proposed company from the business of existing companies with the same distinctive element.

Note: Consents of the "grouped" companies will be required unless the existing parent of those companies is requesting a change of name to "Group".

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6.5 Revival/Dissolution

Dissolution

A proposed corporate name is prohibited where its use could lead to confusion with the name of a body corporate that is dissolved.

Names identical to those of companies that have dissolved or that have amalgamated under another name or that have changed their name are not available (whether the companies are related or not) for two years after the date of dissolution, amalgamation or amendment. The purpose of this period of non-availability is to allow the public time to disassociate that name from a specific business.

Within the two-year period anyone could, however, incorporate a successor company (i.e. a corporation with the same name but with a year of incorporation in brackets immediately before the legal element of the name), or a company with a slightly varied name (or with an identical name if they meet Reg. 31(3) requirement) as long as the consent of the amalgamated company or the company whose name was amended, is obtained. Because no consent is obtainable from a dissolved company, the applicant for the new corporation must demonstrate that it acquired the rights to the name from the dissolved corporation prior to its dissolution.

After two years, the name becomes available to anyone as long as no successor companies were incorporated within the two years and as long as the original name has not been perpetuated as a registered trade name.

Revival

Where, either before dissolution or in the interval between dissolution and revival of a federal corporation, another company with an identical name is incorporated, the federal corporation will not be able to revive in that name as long as the identical name is in existence.

Where, in the above circumstances, the new name is only confusingly similar, it is important to know the continuousness of the operation of the applicant for revival. If its operation was continuous during a substantial period of the time that the new company was in operation, this demonstrates that the revival of the federal corporation is unlikely now to cause confusion.

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6.6 Confusion with Corporate Names, Trade Names, Trade-marks, and Official Marks

6.6.1 Confusion with Trade-marks

1. In order to approve a name for which there are phonetically similar trade-mark citations, Corporations Canada must know in general terms what the proposed company will do and that all phonetically similar trade-marks are in substantially different products or services in order to determine that there is no likelihood of confusion. This information must be provided to Corporations Canada in writing. Where this information is lacking, it will be assumed that the business, products and services associated with the trade-mark are the same as that of the proposed corporation.
   
   
2. The following guidelines provide guidance in situations where there is an existing trade-mark in substantially the same products or service as the proposed name.
   
   
1. Trade-mark (TM) owned by someone other than applicant (i.e. conflicting trade-mark)
   
   
   • TM registered for five years: Corporate name applicant cannot have the proposed name without consent of TM owner, no matter how long the applicant has used it.
   • TM application, or TM registered for less than five years: It will be determined who had prior use. If the corporate name applicant files an affidavit that satisfies the Director that the applicant had prior use of a corporate name or a trade name and provides the Director with an undertaking that the applicant will contest the other party's TM application or registration, the applicant will be granted the name.
     
     
2. Trade-mark (TM) owned by the applicant (i.e. supporting trade-mark)
   
   
   • TM registered for five years: Even if there is another business name that is confusing, the corporate name applicant will be given the name because the applicant's TM is not likely to be struck from the TM registry.
   • TM application, or TM registered for less than five years: If there is another business name that is confusing and this business appears to have used the name before the corporate name applicant, the applicant's TM is not sufficient reason to grant the name. The name will not be approved. If, however, the applicant had prior use, the applicant will be allowed to incorporate.
     
     
   Please note that in these types of trade-mark situations, the important information is:
   
   
   • the length of time that the TM has been in use
   • whether the trade-mark has been registered for five years.
     
     

3. A notice entitled "Protecting Your Corporate Name" is attached at the conclusion of this document. Applicants should be aware that the holder of a corporate name bears the responsibility of ensuring that no new confusing trade-marks are registered by anyone else, after his or her incorporation.

General enquiries concerning trade-marks should be directed to the Canadian Intellectual Property Office at (8l9) 997-l420, or view CIPO's website.

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6.6.2 Confusion with Trade Names

The Director feels that it could be confusing for a trade name and a confusingly similar corporate name to exist at the same time (even if they are owned by the same person) unless both names form part of the same business.

For this reason, the Director will refuse a proposed corporate name where an individual is carrying on business in that trade name (even if the individual is the applicant for incorporation) unless the Director receives the individual's consent and his or her undertaking to cease carrying on business in that trade name or to transfer the trade name registration to the corporation.

1. a change of corporate name is proposed by a corporation that has already registered a trade name; and
2. the proposed name of the corporation will be that trade name.

A copy of the trade name registration showing the corporation as the owner should be filed, however.

Note re Ontario Business Names on the NUANS® report: Ontario business names expire after 5 years unless they are renewed. Unrenewed registrations may remain on the NUANS® database however. The Director will assume that all Ontario trade name registrations less than 5 ½ years old and appearing on the NUANS® report, are active. Any registrations over 5 ½ years old and not renewed, will be disregarded. The ½ year period is a grace period to allow time for renewal after expiry.

Suggested Consent Form from the Owner of an Unincorporated Trade Name

The Director, Corporations Canada
Industry Canada
9th Floor, Jean Edmonds Towers South
365 Laurier Avenue West
Ottawa, Ontario K1A 0C8

Re: Incorporation of a corporation by the name of incorporating party's name.

(Consenting party's name), owner of the registered trade name (enter trade name), hereby consents to the incorporation of (name of the proposed corporation).

(Consenting party's name) undertakes to stop carrying on business under the trade name (or to transfer his/her rights in the trade name to the corporation bearing the proposed name) before the corporation proposing to use the name begins to carry on business under the corporate name.

Consent given at (city), this (date) day of (month), (year).

Consenting Party's Name

Per: ____________________
Jane Doe, President

Note re: Confusion with corporate and trade names for franchised businesses: Because the use of the name of a franchise accrues to the franchisor rather than to the franchisee, the consent of existing business and trade names which are franchisee businesses will not be required for the incorporation of a confusingly similar name. Only the consent of the franchisor will be required. In that consent, the franchisor must identify the existing corporate names as franchisees.

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6.6.3 Confusion with Official Marks

An official mark is "any badge, crest, emblem or mark adopted and used by any public authority, in Canada as an official mark for products or services", as defined in the Trade-marks Act.

Where a proposed name is likely to cause confusion with an existing official mark adopted and used pursuant to the provisions of section 9 of the Trade-marks Act, it will be rejected.

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6.7 Overcoming Confusion

The regulations suggest various ways to overcome a finding that a proposed corporate name is likely to cause confusion.

6.7.1Regulation 28 - Consent and Undertaking by a Corporation

This regulation applies only in the situation where the existing business with which the proposed name is confusing, has not carried on business for two years.

Suggested consent form --Regulation 28

The Director, Corporations Canada
Industry Canada
9th Floor, Jean Edmonds Towers South
365 Laurier Avenue West

Re: Incorporation of a corporation by the name of incorporating party's name

(Consenting party's name), a body corporate, consents to the incorporation/amendment of (name of the proposed corporation).

(Consenting party's name) undertakes to dissolve immediately or to change its name before the corporation proposing to use that name begins to carry on business under that name.

(Consenting party's name) confirms that it has not carried on business under its corporate name during the past two years.

Consent given at (city), this (date) day of (month), (year).

Consenting Party's Name

Per: __________________________
Jane Doe, President

Note: The signature of the authorized signing officer must describe him or her as an officer of the consenting corporation.

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6.7.2 Regulation 29 - Consent to a Distinctive Word

Note: Such a consent would not be required from a foreign company unless it was known or carrying on business in Canada.

Also, please note the difference between consenting to putting certain distinctive words in a corporate name and consent to the use of certain words as a trade name. A mere consent to the use of certain words will not be accepted for purposes of regulation 29.

Please note that consents must be unconditional.

Suggested Consent Form -- Regulation 29

The Director, Corporations Canada
Industry Canada
9th Floor, Jean Edmonds Towers South
365 Laurier Avenue West
Ottawa, Ontario K1A 0C8

Re: Incorporation of a corporation by the name of
incorporating party's name.

(Consenting party's name, i.e. the name of an incorporated or unincorporated business or the name of the owner of a trade-mark) consents to the incorporation of (name of the proposed corporation).

Consent given at (city), this (date) day of (month), (year).

Consenting Party's Name

Per:_________________________
Jane Doe, President

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6.7.3 Regulation 30 - Successor businesses and Year of Incorporation

Note: Section 30 may apply both in the case where a corporation changes its name and in the case of a proposed new corporation. In the former case, the date in parenthesis is the date the corporation succeeds to the name and not the date it is incorporated.

Note: Please note that Regulation 30 does not override other applicable regulations. Where, for instance, X1, the body corporate which is consenting and providing an undertaking to the incorporation of X1 (2001), pursuant to regulation 30 was, itself, incorporated pursuant to a consent of X in conformity to regulation 29, the consent of X, pursuant to Regulation 29 will also be required for the incorporation of X1 (2001).

Or, where X is an individual, the requirement to file the consent to use of family name (Reg 26) will still apply.

Note: Where a corporation succeeds to a name of a non-federal body corporate whose name is primarily or only the name of an individual, the corporation will not be able to delete the reference to the year in parentheses after two years, unless secondary meaning can be established. The name without the year in parentheses is prohibited under Regulation 24(1)(b) for being primarily or only the name of an individual. At the time of obtaining the successor company name under Regulation 30, the applicant may wish to add another word, in addition to the year in parentheses, so that the year in parentheses can be deleted after two years pursuant to Regulation 30(2).

Suggested Consent Form — Regulation 30

The Director, Corporations Canada
Industry Canada
9th Floor, Jean Edmonds Towers South
365 Laurier Avenue West
Ottawa, Ontario K1A 0C8

Re: Incorporation of a corporation by the name of incorporating party's name.

(Consenting party's name), a body corporate, consents to the incorporation/amendment of (name of the proposed corporation), which is to be a successor corporation and which has the year of incorporation or amendment in parentheses before the legal element.

(Consenting party's name) undertakes to dissolve immediately or to change its name before the corporation proposing to use that name begins to carry on business under that name.

Consent given at (city), this (date) day of (month), (year).

Consenting Party's Name

Per:___________________________
Jane Doe, President

Other use of "(2001)" and substitution of "(Canada)" for "(2001)"

The regulations do not prohibit the use of numerals indicating the year of incorporation in parentheses e.g. "(2001)", for the incorporation of a non-successor new company. This will be allowed except where the new corporation is going to be the affiliate of an existing corporation which will remain in existence and "(2001)" is proposed as the distinguishing element. This is considered misleading because "(2001)" connotes a successor.

As a general rule, we will not accept "Canada" or any other term as a replacement for "(2001)" in a successor situation unless the successor company is related to the existing company which has undertaken to dissolve or to change its name in which case we are really dealing with regulation 29 not 30.

The chart below provides a clarification of these guidelines.

* as long as the corporation is not to be a successor to an existing company any reasonable date is permissible, unless it is misleading. Return to *

e.g. ABC 1884 Ltd. would be misleading for the name of a corporation which has not been in business since 1884.

Exception to Regulation 30(1)(b) Where Existing Company is Inactive

If the existing company has not carried on business for two years preceding the request to use the name, the successor corporation does not need to insert the year of incorporation or amendment but the requirements of Regulation 28 must be met.

Exception to Regulation 30(1) (b) Where Existing Company is a Quebec Company

"de facto" import continuances

The Director will permit a company to incorporate with a name that is identical (i.e. without the year of incorporation) to the name of an existing provincial (e.g. Quebec) company where the federal incorporation is to serve as a "de facto" continuance from that province which does not permit exports to the federal jurisdiction.

The applicant must file with us a written undertaking of the provincial company to dissolve forthwith or to change its name before the corporation proposing to use the name carries on business.

There must be a note on file to indicate that the applicant considers this incorporation to be a "de facto" continuance, i.e., the same shareholders and assets will be involved in the federal company as in the provincial company.

Like other import continuances, the availability of this name will be subject to a name search and approval.

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6.7.4 Amalgamations and Acquisitions

Related Policies

Note: Where the name is granted on the understanding that the applicant will, in the immediate future acquire all or substantially all the property of the affiliated body corporate, the applicant should confirm within a few days that substantially all the property did transfer from the affiliated body corporate.

Upon incorporation of the proposed corporation, Corporations Canada will keep the file open pending receipt of written confirmation that substantially all property did transfer. If it is not received within a reasonable period, steps will be taken to require the corporation to change its name.

A transfer of all the shares is not considered to be a transfer of property.

Suggested Consent Form — Regulation 31(3)

The Director, Corporations Canada
Industry Canada
9th Floor, Jean Edmonds Towers South
365 Laurier Avenue West
Ottawa, Ontario K1A 0C8

Re: Incorporation of a corporation by the name of incorporating party's name.

(Affiliated party's name), a body corporate, consents to the change of name of (Applicant corporation's name) to (proposed corporate name).

(Affiliated party's name) confirms that it is affiliated with (Applicant corporation's name) which (has or will immediately) acquire all or substantially all the property of (Affiliated party's name). (Affiliated party's name) hereby undertakes to dissolve immediately or to change its name before the corporation proposing to use the name begins carrying on business under that name.

Affiliated Party's Name

Per:_________________________________
Jane Doe, President

Suggested Consent Form — Regulation 31(4)

The Director, Corporations Canada
Industry Canada
9th Floor, Jean Edmonds Towers South
365 Laurier Avenue West
Ottawa, Ontario K1A 0C8

(Existing body corporate's name), a body corporate, hereby consents to the incorporation of (name of proposed corporation).

(Existing body corporate's name) confirms that it will be affiliated with (name of proposed corporation) which will immediately acquire substantially all the property of (Existing body corporate's name). (Existing body corporate's name) undertakes to dissolve immediately or to change its name before the corporation proposing to use the name begins to carry on business under that name.

Existing body corporate's name

Per:________________________________
Jane Doe, President

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6.7.5 Failing to Honour Undertaking

Subsections 12(4.1) and (5) of the Act state that if a corporation acquires a name as a result of a person undertaking to dissolve or to change names, and that undertaking is not honoured, the Director may direct the corporation to change its name in accordance with section 173. The Director may revoke the corporation's name and assign a name unless the undertaking is honoured within 60 days of the Director directing the corporation to change its name.

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6.7.6 Initials and Given Names

• e.g. "J.B. Smith Shoes Ltd." would be confusing with "Smith Shoes Inc."

However, adding a given name to a corporate name that contains a surname may be sufficient to overcome confusion.

• e.g "Smith Shoes Ltd." would not be used to refuse "Robert Smith Shoes Ltd." unless we are aware that their territory of operation is the same.

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6.7.7 Bankruptcy

For the purposes of Regulations 28, 29, 30 or 31, a name is available, when it is confusing with the name of a bankrupt corporation, if the trustee in bankruptcy consents.

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6.7.8 Names of Canada, Provinces, and Cities Added to Remove Confusion

• e.g."Newton Tool Québec Ltd." would not be considered confusingly similar to "Newton Tool Manitoba Ltd." or "Newton Tool (Canada) Ltd." "Newton Tool (Canada) Inc." would not be considered confusing with "Newton Tool Inc." (a USA company)

However, the consent of the existing company(ies) would be required under Regulation 29 in order to grant such a similar name. Where there are many existing affiliates, the consent of the geographically closest affiliate or the parent of all the affiliates would be sufficient.

Exception: Use of certain provincial names in federal corporation names. (Refer to section 3.2)

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6.7.9 Canadian Subsidiaries

Where a proposed Canadian subsidiary of a foreign, provincial or federal parent uses the name of that parent, which name is too general or merely descriptive, the proposed company

1. must add the word "Canada" or equivalent unless there is some other distinguishing feature between parent and subsidiaries and
2. can overcome the objection of generality by showing that the name has acquired some distinctiveness in Canada, (whether or not it has actually been used in Canada, e.g. the name may have acquired distinctiveness due to advertising which reaches the Canadian market for the product)
3. will be prohibited if it is confusing with an existing Canadian company or trade- mark.

Note: A proposed Canadian subsidiary of a foreign parent with the identical name would not be required to add the word "Canada" if it could establish that the foreign company had never carried on business in Canada and is not known in Canada.

Note: Reproduced below is a copy of the note sent out with corporate names which are rejected by reason of their being confusing.

Note - How to overcome a rejection based on likelihood of confusion

This name has been turned down because, on the basis of the information presented or available, it appears to create a likelihood of confusion with the names indicated on the relevant search report. Please note that corporations dissolved less than 2 years ago are considered to be existing for purposes of confusion.

Corporations Canada will reconsider the decision if other information is presented which demonstrates that, in fact, there is no likelihood of confusion. The kind of information to which this refers is specified in section 25 of the regulations, that is, details concerning the dissimilarity of:

• the goods and services
• territory
• clientele
• and operations

Unless the requirements of Regulation 31(3) have been met, a name which is identical to an existing corporate name will not be approved even with the consent of the existing corporation, unless there are very convincing arguments why no one would be confused, or even if confused, why they could not be harmed thereby.