6. Lacking distinctiveness
Table of contents
- 6.1 Definition of distinctiveness (Regulation 17)
- 6.2 Only descriptive (Regulation 30(1)(a))
- 6.3 Name or surname of individual (Regulation 30(1)(b))
- 6.4 Use of family name (Regulation 28)
- 6.5 Use of geographic terms (Regulation 30(1)(c))
- 6.6 Definition of "secondary meaning" (Regulation 30(2))
- 6.7 Lack of distinctiveness
Reg. 30. (1) For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if it
- is only descriptive, in any language, of the business of the corporation, of the goods and services in which the corporation deals or intends to deal, or of the quality, function or other characteristic of those goods and services;
- is primarily or only the name or family name, used alone, of an individual who is living or has died within 30 years before the day on which the Director receives any of the documents referred to in subsection 8(1), section 178 or subsection 185(4), 187(4), 191(5), 192(7) or 209(3) of the Act or a request to reserve a name under subsection 11(1) of the Act; or
- is primarily or only a geographic name that is used alone.
(2) Subsection (1) does not apply if a person proposing to use the corporate name establishes that it has been used in Canada or elsewhere by them or by their predecessors so as to have become distinctive in Canada on the day referred to in paragraph (1)(b).
6.1 Definition of distinctiveness (Regulation 17)
"Distinctive" is defined in section 17 of the regulations as:
"distinctive", in relation to a trade-name, considered as a whole and by its separate elements, means a trade-name that distinguishes the business in association with which it is used or intended to be used by its owner from any other business or that is adapted to so distinguish them.
Distinctiveness can be inherent or acquired (secondary meaning).
Generally speaking, the most inherently unique names have distinctive features which are composed of letters or figures which have no generic meaning.
- e.g. XLYK
In addition, unusual combinations of generic words can be distinctive.
e.g. Jean Junction
Words composed of parts of other words, surnames, family names, initials, numbers, geographic location and arbitrary dictionary words make a less inherently distinctive but acceptable name.
- e.g. Suncraft Shoes Ltd.
- Smith Shoes Ltd.
- Ottawa Shoes Ltd.
- I.I.L. ShoesLtd.
- Star ShoesLtd.
6.2 Only descriptive (Regulation 30(1)(a))
Examples of names lacking distinctiveness are "Software Inc." and "Car Sales Inc." An acceptable distinctive element would need to be added before such a corporate name could be granted (e.g., "Turner Software Inc." or "Greymark Car Sales Inc.").
Some names that are merely suggestive of the industry, product or service, however, would be acceptable. An example of a merely suggestive name is "Tires and Wheels Ltd." for a car sales business. The name "Tires and Wheels Ltd." does not describe the business nor the product produced. It simply suggests the corporation's"field of activity. If the corporation manufactured or sold tires and wheels, however, this name would be unacceptable because, in this context, it would be only descriptive.
As a general rule, Corporations Canada will not accept names that only describe a quality of the corporation's business or its goods or services (e.g., "Faster Consulting Services Inc.").
However, Corporations Canada will accept such names if:
- alliteration gives the name an acceptable level of distinctiveness (e.g., "Better Business Boardrooms Inc.").
- the Nuans report demonstrates that the word describing a quality is commonly used as a distinctive feature in business names (e.g., "Superior" in "Superior Machinery Ltd." or "Advanced" in "Advanced Technology Solutions Ltd.").
- the descriptive word sounds unusual if used to describe the business of the proposed corporation (for example "Endless Furniture Inc." is acceptable, whereas "Long Lasting Furniture Ltd." is not).
Although these names are descriptive of a quality of the business, they are not merely descriptive but have some distinctiveness. By reason of alliteration or being unusual, these names are distinguishable from others. Also, if the Nuans search reports show that a descriptive word is extensively used as a distinctive element, Corporations Canada will tend to accept the name.
Please note that the approval of certain words as a corporate name does not necessarily mean that those words could be registered as a trade-mark.
6.3 Name or surname of individual (Regulation 30(1)(b))
Corporations Canada determines whether a name is a surname by asking whether one would reasonably think of this word or words as a name or surname rather than as something else (e.g., a coined word). If it appears to be a name or surname, then that word or words cannot be used alone unless there is secondary meaning.
e.g. The following proposed corporate names are unacceptable:
- Legault Inc.
- S. V. Lee Ltd.
- Sarah Legault Inc.
- S&R Wolfe Inc.
Corporate names in which a name or surname (as determined in the paragraph above) is not used alone would be acceptable.
e.g. The following proposed corporate names are acceptable:
- Wilson & Myers Ltd. (two names, not one name used alone)
Bob & Carol Harris Inc.
- Legault Gardening Enterprises Ltd.
Thomas Construction Inc.
Note: If the added descriptive word is not specific and gives no indication of the nature of the proposed business the name may be refused for creating a likelihood of confusion with existing similarly named corporations. Other such non-specific descriptors are: "agency", "associates", "brothers", "distributions", "enterprises", "industries", "group", "products", "services", "sons", "Canada" and "International".
e.g. If Thomas Construction Inc.already exists, then the proposed corporate names are unacceptable:
- Thomas Enterprises Ltd.
- G. W. Thomas Enterprises Ltd.
The applicant must either provide information to show that there is in fact no likelihood (based on differences of products, territory, clientele) of confusion with existing companies, or, the applicant should add a more specific descriptive word,
e.g. The following proposed corporate names are acceptable:
- Thomas Landscaping Inc. (or, add a more specific name or surname)
- George W. Thomas Enterprises Ltd.
Note 1: "Associates" or "and Associates" can be used in combination with a name or surname. Although "Associates" is acceptable with a coined word, "and Associates" is not because it could mislead one into assuming that the distinctive element is a surname
e.g. XYLX & Associates — not acceptable
Note 2: The Office of the Superintendent of Bankruptcy prefers that trustees who incorporate use only the name(s) of the principal partner(s) in the corporate name. However, if only one person is involved, then a surname used alone may not be acceptable (see surname formats above). The addition of a descriptive term like "Insolvency Trustee" or "Bankruptcy" would overcome any such objection.
6.4 Use of family name (Regulation 28)
Reg. 28. For the purpose of paragraph 12(1)(a) of the Act, a corporate name is prohibited if an element of the name is the family name of an individual, whether or not preceded by their given name or initials, unless the individual or their heir or personal representative consents in writing to the use of their name and the individual has or had a material interest in the corporation.
Regulation 28 appears to state that every word that is in fact a family name of an individual requires a consent in writing regardless of whether the reasonable person would think of it as a family name. Any applicant not providing such a consent would be in contravention of this regulation. Corporations Canada will consider if a reasonable person would look upon that word as a family name. If so, a consent will be required; otherwise a consent will not be required.
- e.g. Ran Shoes Inc. — no consent required
- Ran Smith ShoesInc. — consent of Ran Smith
- Ran, Smith Shoes Inc. — consent of Ran and consent of Smith
A sample letter of consent is available.
Punctuation such as a comma (,), ampersand (&) or hyphen (-) is necessary in a proposed name if the use of two surnames could wrongly connote the name of one individual (e.g., "Robert Simpson" should become "Robert, Simpson", "Robert & Simpson", "Robert-Simpson" if two surnames are intended).
A consent is not required if the word is a dictionary word or a Christian name unless it is used in such way as to connote a family name to a reasonable person.
- e.g. Star Shoes Ltd. — no consent
- Star, Smith Shoes Ltd. — consents of Star & Smith
- Star Smith Shoes Ltd. — consent of Star Smith
- Starsmith Shoes Ltd. — no consent
- Star Associated Ltd. — no consent
- Star & Associates Ltd. — consent of Star
- Star Associates Ltd. — no consent
- Rose Green's Tools Ltd. — consent of Rose Green
Consents are not required if the word or words are obviously the name of an historical person, literary or fictional character.
- e.g. Dorian Grey Fashions Inc. — acceptable
- Lady Macbeth Cosmetics Inc. — acceptable
- Bonaparte Shirts Inc. — acceptable
If the proposed corporate name contains a fictitious name, it will be necessary to file a statutory declaration or an affidavit signed by the incorporator or principal shareholder of the proposed corporation stating that he or she has ensured that:
- it is a fictitious name and is not the name of an individual who is well-known or known to him or her personally; and
- it is not the name of an individual already established or associated with the line of business of the proposed corporation in Canada or internationally.
A consent is not required if the family name is the name of the incorporator of the business applying for the name.
A consent is not required if the family name is the name of a street on which the business is located.
For the CBCA, the consenting person must have or must have had a material interest in the corporation as required by section 28 of the regulations.
6.5 Use of geographic terms (Regulation 30(1)(c))
e.g. Red Lake Inc. is not acceptable because "Red Lake" is primarily or only a geographic name.
There should be no prohibition against the use of a geographic reference in the granting of a corporate name if a descriptive feature is added. Substantiation for the use of a geographic location is not required.
e.g. Red Lake Gold Mines Inc. would be acceptable provided that it is not confusing.
A street address used alone is considered primarily a geographic name and is not available unless a descriptive term is added.
- e.g. 235 St. Catherine Street Inc. — unacceptable
- 235 St. Catherine Street Enterprises Inc. — acceptable
6.6 Definition of "secondary meaning" (Regulation 30(2))
The applicant can escape the prohibitions of subsection 30(1) of the regulations as long as the applicant can show that the trade name has been used in Canada or anywhere else by them or their predecessors to such an extent that persons in that trade would, on hearing the name, think of the business, rather than the primary meaning of the words in its name.
In order to convince the Director appointed under the CBCA of secondary meaning, the applicant must produce in writing, evidence showing how large and widespread the business is and, if necessary, include written statements from others in the trade.
Evidence to support a claim for secondary meaning must be in the form of an affidavit or statutory declaration and must attest to use of the name across Canada, either for significant periods of time or with great intensity.
6.7 Lack of distinctiveness
If Corporations Canada were to approve names that lacked distinctiveness, the task of preventing confusion among business names would be rendered more difficult. The only way the name attached to business "X" will not be confused with the name attached to business "Y" is if there is something in the names to distinguish them. The stronger the distinguishing feature, the less likely confusion will occur.
Based on this reasoning, the corporate name regulations require that corporate names have a distinguishing feature. These regulations also impose rules to indicate where distinctiveness is insufficient or lacking. According to these rules, a name lacks distinctiveness and is therefore unavailable when it is only descriptive, or when it is only an individual's name or a geographic name.
A corporate name that only describes the business of the corporation, industry, goods or services, or the quality or function of those goods and services is unavailable (e.g., "Car Sales Inc."). A name will also be unavailable for being "only descriptive" when it merely describes the quality of the corporation's business or its products (e.g., Faster Consulting Services Inc.).
A proposed name which appears to lack any distinctiveness may have, in fact, acquired distinctiveness through extensive use. If this distinctiveness is demonstrated in writing, the name will be available.
Otherwise, the best way to overcome the objection of lacking distinctiveness is:
- Only descriptive — add a distinctive word
e.g. a coined word like "Spillex" (Spillex Cleaning Services Corp.)
e.g. a dictionary word, that does not describe like "Star" (Star Theatres Inc.)
e.g. an individual's name like "Turner" (Turner Shoes Ltd.)
- Primarily a name — add a descriptive word like "Manufacturing" e.g. Wilson Manufacturing Ltd.
- Primarily a place — add a descriptive word like "Enterprises" e.g. Red Lake Enterprises Inc.
- Date modified: