Before launching her Toronto-based property-management business four years ago, Rachelle Berube checked Industry Canada’s database of registered business names and trademarks to make sure nobody had claimed the name she wanted for her company: Landlord Rescue.
“No one was using it so I went ahead and registered my business as a sole proprietorship under Landlord Rescue, foolishly thinking that was all I needed to do to protect my business name,” Ms. Berube says.
“I was wrong.”
Last year, an Edmonton-based company with the same name as Ms. Berube’s business bought landlordrescue.com and registered the name Landlord Rescue as a trademark.
Ms. Berube, who operates only in Ontario, helping landlords find tenants and deal with tenant issues, says she wasn't worried about losing clients to the Edmonton firm.
But she was concerned that her business might be confused with the other Landlord Rescue. She’s already received a few e-mails and phone calls meant for the other company.
Most of all, she was worried that she might have to give up her company name and website address, landlordrescue.ca, since a legally registered trademark in Canada gives the trademark owner exclusive right to the name throughout the country.
“The website drives my business, so every single dollar I make comes through my website,” Ms. Berube says.
“Plus, imagine the cost of changing your stationery, business cards and everything else that has your business name on it. All these things cost money.”
Ms. Berube may have a resolution in her case, involving a co-existence agreement recently proposed by Jared Hope, owner of Landlord Rescue in Edmonton, which will allow her to continue using the name in Ontario.
Nevertheless, the situation Ms. Berube found herself in isn't unique, say experts in corporate intellectual property, which covers things such as company and product names, product formulas, slogans and logos.
Many businesses, especially smaller enterprises, fail to take the proper steps to protect those very things that give their business an identity and an edge over their competitors.
It’s an oversight that can have costly consequences, says Cynthia Rowden, a partner and head of the trademark department at the law firm Bereskin & Parr LLP.
“Intellectual property can be one of the most important assets of a business,” says Ms. Rowden, who works out of her firm’s Toronto office.
“So when you're starting a business, you have to make sure you have all the appropriate protections in place to secure your intellectual property, and that you yourself are not infringing on someone else’s property rights.”
The potentially high cost of intellectual property protection is among the main reasons for this oversight, Ms. Rowden says.
Application fees for intellectual property rights range from less than $100 for copyright to several hundred dollars for a patent. But when lawyers and agents are involved, the cost can easily climb into the thousands of dollars.
Ms. Rowden says another reason some business owners fail to put intellectual property protection in place is that they simply don’t know enough about intellectual property laws. For instance, many companies assume that they automatically own the copyright to material created for them by a creative agency.
“In Canada, the rule is that the creative agency owns the copyright to the work they produced,” she says. “So as the business owner hiring the agency, you need to set up the agreement so that the copyright is assigned to you by the agency.”
Some business owners also think it’s enough to register their Internet domain names with an accredited registrar, says Dean Palmer, an intellectual property lawyer and trademark and patent agent who runs IProperty Inc. in Vancouver. But if someone else owns the trademark to the same name, business owners could be forced to give up their domain name, Mr. Palmer says.
Chris Gray, director of the Ottawa-based Canadian Intellectual Property Council, an arm of the Canadian Chamber of Commerce, says intellectual property tends to fall to the bottom of many entrepreneurs’ list of priorities.
“Even when they're aware of the issues around intellectual property, it’s not easy for a small company to give this matter the attention it deserves,” he says. “Their priorities lie in getting their business off the ground, making sure the rent is paid, that they have enough capital to stay afloat. They just don’t have the time and resources to devote to intellectual property matters.”
In Canada, as in many other jurisdictions around the world, intellectual property rights are grouped into six categories: trademark, patent, copyright, industrial design, integrated circuit topographies, and plant breeders’ rights.
Each category covers a specific property or group of properties. Trademarks, for example, apply to words – such as product or company names – and logos, while copyright protects originals works, such as books, music and art.
A patent, on the other hand, protects inventions while industrial design registration applies to original and visually appealing physical design, such as the packaging around the product.
Once granted, these protections last for a specified period – 15 years for a trademark, which can be renewed, up to 20 years for a patent, and up to 10 years for industrial designs. Copyright holders are protected throughout their lifetime, plus 50 more years after they die.
Although CIPO provides guidance for do-it-yourself applicants, Mr. Gray strongly recommends getting help from an intellectual property lawyer, or an agent registered with CIPO.
Mr. Palmer says there's a lot of homework that needs to get done before a business owner can sit down to fill out an application for intellectual property protection.
For example, before filing a trademark application, businesses need to search through the Canadian Trade-marks database to make sure a name they have in mind for their company or product hasn’t been trademarked by someone else.
This may sound simple enough for entrepreneurs to do themselves, but, in fact, not all trademarks legally recognized in Canada are listed in this database, Mr. Palmer says.
Common law rights exist that, in certain cases, protect trademarks even when they're not registered, such as when a business has been operating in a certain market for a long time and has come to be widely recognized by its distinctive name, he says.
Businesses that intend to expand their operations beyond Canada should also search through the trademark databases of the countries they're planning to penetrate, Ms. Rowden advises.
Intellectual property law firms typically have access to other countries’ trademark databases, she says, and some may also have connections to intellectual property law firms abroad.
“This becomes important when you're dealing with language differences,” she says. “Remember that your trademark name may have different meanings in other languages, so you might want to retain local council for advice.”
For the small business owner, Ms. Rowden suggests setting aside at least $2,000 to cover the costs of getting intellectual property protection in place.
“It may seem like a lot to someone who’s just starting out,” she says. “But it’s peanuts compared to the legal fees you’ll have to pay if you get yourself in trouble.”
Ms. Berube agrees. Applying for a trademark without the help of a lawyer or agent would have cost her $250. Instead, she has spent $750 to file a statement of opposition against the trademark granted to Landlord Rescue in Edmonton. She had planned to hire a lawyer to help her with her case, but was told she needed to pay a retainer of about $7,000.
Fortunately, it looks like she may not need to pursue this course of action at all.
Mr. Hope, whose own Landlord Rescue helps property owners manage their portfolios of residential rental properties, says he has no plans to take his business into Ms. Berube's market.
In fact, says Mr. Hope, whose company has eight employees, he wants to put together a co-existence agreement that would allow Ms. Berube to continue using Landlord Rescue in Ontario.
Ms. Berube recently phoned Mr. Hope -- the first time they had spoken to each other -- and they agreed that a co-existence arrangement, where both parties agree to recognize each other's right to the name as long as neither infringes on the other's market, would work for both of them.
Ms. Berube says she's relieved to hear of Mr. Hope's proposed arrangement.
“It will give me time to rebrand and relaunch my company’s identity without spending all this money on lawyers,” she says.
“And believe me, when I rebrand, I’m building a fortress where everything is trademarked and copyrighted and whatever else I need to do to protect my business identity,” she adds.
“I've learned my lesson and I hope other businesses can learn from my mistakes.”
Special to The Globe and Mail