Can a Business Be Sued For Having a Name That Is Too Similar to the Name of a Competitor?

A Business That Holds Out a Name or Perhaps Product Branding or Even Styles, Slogans, Colours, Among Other Things, That Could Appear Confusing to An Average Hurried Consumer, Concerns For the Tort of Passing Off and Infringement Per the Trade-Marks Act May Arise.

A Helpful Guide For How to Determine and Understand What Constitutes As the Tort of Passing Off

A humourous example of the tort of passing off can be found within the movie Coming to America.  In the movie, Eddie Murphy (as Akeem, a rich Prince) takes on a commoner persona and goes to work at a hamburger restaurant known as McDowell's and styled very similarly to McDonalds.  There is a scene where Mr.  McDowell attempts to explain away the apparent infringement by describing some minor differences between the two such as, "McDonalds has golden arches" and "McDowell's has golden arcs".  It is presumed that such a minor difference would fail to pass mustard (pun intended) in a court.

The Law

Three elements establish passing off; the existence of goodwill, the deception of the public due to a misrepresentation, and the actual or potential damage to the plaintiff: Ciba-Geigy Canada Ltd. v. Apotex Inc., [1992] 3 S.C.R. 120.  Passing off may occur without proof of intention; Consumers Distributing Co. v. Seiko, [1984] 1 S.C.R. 583.  Passing off was articulated well in Carey Industries v. Carey, 2013 ONSC 5607 wherein it was said:

[30] In Ciba-Geigy Canada Ltd.  v. Apotex Inc., the Supreme Court of Canada held that the three necessary components for a passing off action are as follows:

(a)   Existence of good will or reputation attached to the goods or services which the plaintiff supplies in the mind of the purchasing public via association with the identifying “get up” (which can be a trade name);

(b)   Deception of the public due to a misrepresentation by the defendant leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff; and

(c)  Actual or potential damage to the plaintiff by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the plaintiff’s goods or services is the same as the source of those offered by the plaintiff.

Ciba-Geigy Canada Ltd.  v. Apotex Inc., 1992 CanLII 33 (SCC),  [1992] 3 SCR 120

[31] There is no requirement that the defendants actions be intentionally fraudulent, malicious or even negligent.  The tort of passing off is complete without reference to the defendant’s state of mind.

Dentec Safety Specialist Inc.  v. Degil Safety Products Inc., 2012 ONSC 4721 (CanLII)  para.  8

[32]  In general terms the law of passing off can be summarized in one short general proposition, “No man may pass off his goods or services as those of another.

[33]  The essence of the tort is deceit by the defendant suggesting that the defendant’s product or service is the plaintiff’s product or service which thereby causes confusion in the minds of consumers as to whose products or services are being sold.  It is not necessary for the plaintiff to establish the consumers were actually mislead by the defendant’s conduct but simply that the defendant made an attempt to mislead the public.  It is important to avoid confusing anyone who has an actual or potential connection with the product or service.  Such confusion may enable a competitor to secure a commercial advantage by affecting sales it would not otherwise achieve or it may result in a consumer purchase that might not otherwise have taken place.

Dentec Safety Specialist Inc.  v. Degil Safety Products Inc., supra, para.  10

[34] Practically speaking, cases of passing off typically fall into one of two broad categories, namely:

(1)  where competitors are engaged in a common field of activity and the defendant has named, packaged or described its product or business in a manner likely to lead the public to believe that the defendant’s product or business is that of the plaintiff; or

(2)  where the defendant has promoted his product or business in such a way as to create the false impression that its product or business is in some way approved, authorized or endorsed by the plaintiff or there is some business connection between them thereby capitalizing on the plaintiff’s reputation and good will.

Avoidance of Confusion

Furthermore, in a lawsuit alleging the tort of passing off, it is also unnecessary to prove that actual deception occurred whereas the requirement is merely to show that the names are potentially confusing and likely to deceive, even accidentally. This lack of necessity to prove actual deception was stated in Unity Insurance Brokers (Windsor) Ltd. v. Unity Realty & Insurance Inc., 2005 CanLII 7664 where it was said:

[10]  It is clear from the authorities that the focus of the hearing before the Director and of this appeal is not on damage to the parties but rather the protection of the public who are likely to be deceived by the similarity of corporate names.  In Re Cole’s Sporting Goods Ltd. and C. Cole & Co. Ltd and Coles Book Stores Ltd. 1964 CanLII 270 (ON SC), [1965] 1 O.R. 331, Schatz, J. stated at page 337:

I am not primarily concerned with the effect on the parties to the dispute, as I consider the relevant section of the Act to be designed solely for the protection of the public.  Of course, there will be resulting advantage or disadvantage to one or the other of the two companies with conflicting names if an order is or is not made changing the name of either, but this result in itself should not be the determining factor or indeed any factor in the question of changing the name under the procedure set out in the Act by reason of the existence of the prior incorporation of C. Cole & Co., and the later incorporation of Coles Book Stores Ltd. …it is not the duty of the Court to make any order for the sole purpose of removing a grievance in so far as it affects the person complaining, but the Court must act for the benefit of the public who are likely to be deceived, the grievance of a party being an entirely secondary result.  Under the Act this is a matter respecting the public primarily, i.e., if the public likely to be deceived, and therefore in my opinion the principles of a passing-off action are not applicable…

[11]  In Re CC Chemicals (1967) 1967 CanLII 175 (ON CA), 2 O.R. 248 (Ont. C.A.) Kelly, J.A. at page 255 adopted these remarks, adding:

This statement I consider to be fundamental: what the statute aims at is the prevention, in the public interest, of the use of letters patent to further deception likely to arise from similarity of names.  Save as to the provision of a review by the Court, what it sets up is an administrative procedure to prevent the giving of a name similar to an existing one and to change a name, the giving of which contravened the prohibition of s. 12(1).

It was never intended that s. 12 should provide an alternative method of determining the rights of two parties where one of them, by the manner in which he is conducting his business, is seeking to draw custom away from his competitor.  Adequate remedies have always been available to deal with such a situation – any attempt to broaden the scope of the administrative procedure under s. 12 to encompass what is ‘passing-off’ are unwarranted and should be resisted.

[12]  As stated above, the evidence establishes that there is a great deal of confusion in the minds of insurers, reinsurers and insurance brokers with whom the parties have business dealings as between Unity Insurance Toronto and Unity Insurance Windsor.  The evidence also establishes that there has been only one recorded instance of confusion in the minds of customers of either Unity Insurance Toronto or Unity Insurance Windsor.  There is a paucity of jurisprudence on the meaning of the term “someone who has an interest in dealing with that person” as now used in subsection 2(1) of the Regulation.  The two seminal authorities dealing with the class of persons likely to be deceived or confused by the similarity in corporate names are CC Chemicals Ltd., supra, and Canadian Motorways Ltd. et al v. Laidlaw Motorways Ltd. (1973) 1973 CanLII 26 (SCC), 11 C.P.R. (2nd) 1 (S.C.C.).  They were decided, respectively, under the 1960 Act and Regulations and the 1970 Act and Regulations, neither of which contained the present definition.

[13]  In CC Chemicals, supra, Kelly J.A. stated at page 258:

Further, in considering the likelihood of deception he must give due regard to the persons or class of person likely to be deceived if dealing with the proponent.  I do not consider that anyone can be deceived by the similarity of one name to another within the meaning of s. 12 unless he is induced to deal with someone other than the person with whom it was his intention to deal – so, unless a person is likely to deal with the corporation to be incorporated in the mistaken belief that he is dealing with another corporation, it cannot be said that, within the meaning of the Corporations Act, the similarity of names is likely to deceive him.  Accepting this, I infer from the expression “likely to deceive” that the similarity must be such as to cause a person, who had an interest in dealing, or reason to deal, with “A” to deal with “B” in the belief that he was dealing with “A”.  If this be the test, as I conceive it to be, the likelihood to deceive must be assessed by reference to the impact of the words in the name on the persons or class of persons with whom the objector seeks to have business dealings, that is, his customers or prospective customers.  In other words, the only person who is deceived is one whose action or decision is likely to be so affected. [emphasis added]

[14]  The statute in effect at the time of the CC Chemicals’ decision was the Corporations Act R.S.O. (1960) c. 71 which provided as follows in subsection 12(1):

12. (1) A corporation shall not be given a name,

(a)  that is the same as or similar to the name of a known corporation,

association, partnership, individual or business if its use would be likely to deceive, except where the corporation, association, partnership, individual or person signifies its or his consent in writing that its or his name in whole or in part be granted…[emphasis added]

[15]  The Regulation in effect at the time provided in section 5 as follows:

Where the name of a corporation to be incorporated is the same as or similar to the name of any known corporation so as to be, in the opinion of the Provincial Secretary, likely to deceive, the name of the corporation to be incorporated shall contain such variations from that of the known corporation as the Provincial Secretary determines.

[16]  It should be noted that there was nothing in the legislation in effect at the time of the CC Chemicals’ decision which limited the persons likely to be deceived to customers of the corporation.  Kelly J.A. in dealing with the concept of persons likely to be deceived refers generally to persons dealing with the corporation although he does at one point add the qualifier that persons with whom the corporation seeks to have business dealings are “his customers or prospective customers”.

[17]  In Canadian Motorways, supra, in dealing with the issue of the scope of “a review of a decision of the Director” which was the phrase used in the applicable legislation at that time, Laskin J. stated at pages 10 and 11:

The history of s. 12 of the Ontario Corporations Act was reviewed by Kelly, J.A. in Re CC Chemicals, supra.  Two matters of substance emerge from that review; first, that the Ontario provision, unlike that of its prototype in the United Kingdom, reposes statutory authority in the Court to “review the matter”; and secondly that there are no express limitations upon the scope of the review by the Court.  In the exercise of the power to review in the CC Chemicals case, Kelly J.A., addressed himself to the meaning of the key phrase in s. 12(1) prohibiting the giving of a name that is “the same as or similar to the name of a known corporation … if its use would be like to deceive”.  He regarded it as a prohibition to prevent the likelihood of deception in the public interest, but that interest was to be measured according to whether [at p. 108 C.P.R., p. 213 D.L.R.] “…the similarity [was] such as to cause a person who had an interest in dealing, or reason to deal, with ‘A’ to deal with ‘B’ in the belief that he was dealing with ‘A’”.  He expanded on this as follows:

If this be the test, as I conceive it to be, the likelihood to deceive must be assessed by reference to the impact of the words in the name on the persons or class of persons with whom the objector seeks to have business dealings, that is his customers or prospective customers.

The Court, in the exercise of the power of review conferred by s.12(3), is undoubtedly authorized to consider the meaning and application of the statutory standard fixed under s.12(1).

[18]  The legislation in effect at the time of the decision in Canadian Motorways, being the 1970 version of the Ontario Corporations Act and the Regulation thereunder, contained provisions identical to the 1960 Corporations Act and Regulation thereunder.

[19]  The concept of defining the class of persons likely to be confused or deceived by the similarity in corporate names was first introduced in the 1980 Regulation under the Ontario Corporations Act, being R.R.O. (1980) Regulation 88, which provided in section 2 in part as follows:

2 (1)  For the purpose of clause 7(1)(b) of the Act and the regulations, the meaning of the expression “if the use of that name would be likely to deceive” shall include,

(b)  a name whose similarity to the name of a person would lead to the inference that the name would cause someone who had an interest in dealing, or reason to deal, with the person, to deal with the corporation bearing the name in the belief that he was dealing with the person. [emphasis added]

[20]  In my view, to the extent that the decision in CC Chemicals, supra, appears to limit a consideration of persons likely to be confused or deceived to customers of the corporation and to the extent that that limitation is, by implication, approved in Canadian Motorways, supra, such limitation cannot be applicable under the Regulation in effect since 1980 which defines the class of persons likely to be confused or deceived as all persons having an interest in dealing with the corporation.  This class of persons would clearly include lenders, suppliers, contractors and other business associates in addition to customers.  In the case at bar, the evidence is clear that insurers from whom the parties obtained the products to be provided to their customers and reinsurers and other insurance brokers with whom the parties had business dealings were in many instances led by their confusion to think they were dealing with Unity Insurance Toronto when they were dealing with Unity Insurance Windsor and vice versa.

[21]  More recent authorities have not limited the class of persons to be considered in determining whether the corporate names are likely to be deceived to customers of the corporations.  In the Matter of Cap-Co Inc., 17 C.P.R. (3rd) 498, the Hearing Officer relied on part on confusion in the mind of the accounts officer with responsibility for the objector’s bank account in determining that the proponent’s name was so similar as to be likely to cause deception within the meaning of section 9 of the OBCA.  The Hearing Officer stated at page 505:

The objector is a project manager.  Project management is a field of activity within the real estate development industry.  The proponent is a mortgage broker.  The functions of the proponent and the objector are therefore different in nature.

The objector operates within the Municipality of Metropolitan Toronto and environs.  The proponent operates within the same geographic area.

The objector, as a project manager, deals with the real estate development industry which includes investors, developers, contractors, construction and financial institutions.

The proponent, as a mortgage broker, in soliciting for its mortgage broking services, would also contact developers and investors since these are an important source of business for the mortgage industry, as well as financial institutions.

I therefore conclude that, although there is not a similarity between the activities of the objector and the proponent, there is a similarity in the persons or class of persons with which both the objector and the proponent are likely to deal in carrying on their respective activities.

[22]  In Brydon Marine Products v. ITT Industries of Canada (1986) 10 C.P.R. (3rd) 361, while the Hearing Officer found that the use of the names would not be likely to deceive, he did accept evidence of confusion on the part of a supplier where on two occasions shipments of material were forwarded to the wrong party.  Similarly, In the Matter of Artlab Communications Ltd. (1987) 16 C.P.R. (3rd) 356, the Hearing Officer considered several examples of confusion by different suppliers to the proponent and the objector and determined that such “erroneous invoices and telephone calls to the objector constitute indications of confusion in the public mind”.

[23]  Accordingly, I am of the view that, on the basis of the evidence before her, the Director made no error in concluding that the use of the name “Unity Insurance” by the appellants would be likely to deceive in the sense of leading someone who has an interest in dealing with Unity Insurance Toronto to deal with Unity Insurance Windsor in the mistaken belief that they are dealing with Unity Insurance Toronto and vice versa and in ordering the appellants to file Articles of Amendment changing their corporate names to names that are distinguishable from “Unity Insurance”.  The fresh evidence before this court on this appeal further strengthens the conclusion that the Director made no error.

Further to the common law tort of passing off, passing off is codified within the Trade-Marks Act, R.S.C.  1985, c.  T-13, s.7(b), as amended.  Accordingly, legal actions may raise issues involving both the common law tort of passing off as well as the statute law of infringement upon a trademark.  Such raising of both issues occurred, albeit unsuccessfully, within the case of Kaastra, o/a Arbor-Aide v. Arbor Aid Ltd., 2019 ONSC 4590 where it was said:

[17]  Sections 7(b) and (c) of the Act codify the common-law tort of “passing off”.  These sections read as follow:

7.        No person shall […]

(b) direct public attention to his goods, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his goods, services or business and the goods, services or business of another,

(c) pass off other goods or services as and for those ordered or requested…

[18]  The test for the tort of passing off at common law and passing off pursuant to sections 7(b) and (c) of the Act are the same.  The three-part test required to be met to establish a claim of “passing off” is as follows:

(a)  the existence of goodwill regarding the applicant’s name or product;

(b)  the deception of the public due to a misrepresentation on the part of the respondent; and

(c)  that the applicant has suffered, or has the potential, to suffer damages as a result of the misrepresentation.

As indicated within both the common law as well as the statute law, potential deception of the public, unintentional or intentional per the Unity case as above, is a required element; however, such then raises the question as to what is likely or possible to deceive or otherwise be confusing.  This question is both raised, and partly answered within section 6 of the Trademarks Act where it is said:

6 (1) For the purposes of this Act, a trade-mark or trade-name is confusing with another trade-mark or trade-name if the use of the first mentioned trade-mark or trade-name would cause confusion with the last mentioned trade-mark or trade-name in the manner and circumstances described in this section.

(2) The use of a trade-mark causes confusion with another trade-mark if the use of both trade-marks in the same area would be likely to lead to the inference that the goods or services associated with those trade-marks are manufactured, sold, leased, hired or performed by the same person, whether or not the goods or services are of the same general class.

(3) The use of a trade-mark causes confusion with a trade-name if the use of both the trade-mark and trade-name in the same area would be likely to lead to the inference that the goods or services associated with the trade-mark and those associated with the business carried on under the trade-name are manufactured, sold, leased, hired or performed by the same person, whether or not the goods or services are of the same general class.

(4) The use of a trade-name causes confusion with a trade-mark if the use of both the trade-name and trade-mark in the same area would be likely to lead to the inference that the goods or services associated with the business carried on under the trade-name and those associated with the trade-mark are manufactured, sold, leased, hired or performed by the same person, whether or not the goods or services are of the same general class.

(5) In determining whether trade-marks or trade-names are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including

(a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known;

(b) the length of time the trade-marks or trade-names have been in use;

(c) the nature of the goods, services or business;

(d) the nature of the trade; and

(e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the ideas suggested by them.

While it might seem that section 6 of the Trademarks Act, and much of the case law, suggests that any use of a trade-mark or trade-name that could be confusing is improper, ironically, interpretation as to what would constitute as confusing is often confused; however, it does seem that the law is sometimes referenced as what the "moron in a hurry" may find confusing as opposed to a sophisticated diligent person taking a few moments of time to carefully consider the apparent likeness or distinction within the trade-marks or trade-names.  This "moron in a hurry" test was stated by Lord Denning within England law and was subsequently adopted by the Supreme Court in Ciba-Geigy Canada Ltd. and is frequently cited.  An interesting case using the "moron in a hurry" test is the case of Molson Canada v. Oland Breweries Ltd., 2001 CanLII 28238 where the two brewers were in a dispute over use of the Export beer brand.  With this said, some cases refer to the "average hurried consumer" test which was used by the Supreme Court in the case of Mattel, Inc. v. 3894207 Canada Inc., [2006] 1 S.C.R. 772 which involved a dispute over the use of the name Barbie.  As was said by the Supreme Court in each of these cases:

[21] Molson has suggested Oland must demonstrate that there is no likelihood of confusion and any doubt in this regard must be resolved against them.  The cases cited for this proposition are: Mr.  Submarine v. Voultsos (1977), 36 C.P.R.  (2d) 270 (Ont.  H.C.J.), and Sun Life Assurance Co.  of Canada v. Sunlife Juice Ltd.  (1988), 1988 CanLII 4550 (ON SC), 22 C.P.R.  (3d) 244 (Ont.  H.C.J.).  Mr.  Submarine was a case where an ex-franchisee replicated the exterior storefront presentation of Mr.  Submarine in what was a most glaring attempt to gain commercial momentum at the expense of Mr.  Submarine.  Considering the matter, the court did indeed indicate that unless Mr.  Voultsos could demonstrate his storefront imitation did not cause confusion, an injunction would issue, as it did.  The Sun Life case was a trade-mark infringement action involving substantially different wares.  However, in view of the familiarity and long use of the plaintiff’s mark, the court considered an onus rested with the defendant to show no likelihood of confusion.  In Miss Universe, Inc.  v. Bohna (1994), 1994 CanLII 3534 (FCA), 58 C.P.R.  (3d) 381, the Federal Court of Appeal held the onus was always on an applicant to establish on a balance of probabilities the absence of any likelihood of confusion in relation to a previously used and registered mark.  Despite the fact there may be some question as to which party has the onus regarding confusion in an action objecting to a registration or an infringement case, there is no doubt that in a passing off or s.  7 action the plaintiff has the onus.

The Supreme Court of Canada in Ciba-Geigy Canada Ltd., supra, has clearly held this to be so and on reflection there is no reason in law which would suggest the onus in a case of this kind ought to be anything other than the usual civil onus requiring proof on a balance of probabilities.  It is absurd to suggest a reverse onus, as the plaintiff has, in which any doubt on the issue is to be resolved against the defendant.  Further, in considering this element of the matter, it is the concept of “a reasonable consumer” to which the standard is applicable.  Such a consumer is not a person fully familiar with and completely knowledgeable in regard to a plaintiff’s business or product and thus incapable of being confused.  It is a consumer who has a vague memory or understanding and when confronted with the competitor’s product may be confused or deceived as to its nature, source or ownership.  The test involved is aptly stated by Lord Denning in his inimitable way as follows:

The test is whether the ordinary, sensible members of the public would be confused.  It is not sufficient that the only confusion would be to a very small, unobservant section of society; or as Foster J.  put it recently, if the only person who would be misled was “a moron in a hurry”.  [Newsweek Inc.  v. British Broadcasting Corp., [1979] R.P.C.  441 at p.  446.]

56  What, then, is the perspective from which the likelihood of a “mistaken inference” is to be measured?   It is not that of the careful and diligent purchaser.  Nor, on the other hand, is it the “moron in a hurry” so beloved by elements of the passing-off bar:  Morning Star Co-Operative Society Ltd. v. Express Newspapers Ltd., [1979] F.S.R. 113 (Ch. D.), at p. 117.  It is rather a mythical consumer who stands somewhere in between, dubbed in a 1927 Ontario decision of Meredith C.J. as the “ordinary hurried purchasers”:  Klotz v. Corson (1927), 33 O.W.N. 12 (Sup. Ct.), at p. 13.  See also Barsalou v. Darling (1882), 1882 CanLII 40 (SCC), 9 S.C.R. 677, at p. 693.  In Delisle Foods Ltd. v. Anna Beth Holdings Ltd. (1992), 45 C.P.R. (3d) 535 (T.M.O.B.), the Registrar stated at pp. 538-39:

When assessing the issue of confusion, the trade marks at issue must be considered from the point of view of the average hurried consumer having an imperfect recollection of the opponent’s mark who might encounter the trade mark of the applicant in association with the applicant’s wares in the market-place.

And see American Cyanamid Co. v. Record Chemical Co., [1972] F.C. 1271 (T.D.), at p. 1276, aff’d (1973), 14 C.P.R. (2d) 127 (F.C.A.).  As Cattanach J. explained in Canadian Schenley Distilleries, at p. 5:

That does not mean a rash, careless or unobservant purchaser on the one hand, nor on the other does it mean a person of higher education, one possessed of expert qualifications.  It is the probability of the average person endowed with average intelligence acting with ordinary caution being deceived that is the criterion and to measure that probability of confusion  the Registrar of Trade Marks or the Judge must assess the normal attitudes and reactions of such persons.

57  Having repeated that, I fully agree with Linden J.A. in Pink Panther that in assessing the likelihood of confusion in the marketplace “we owe the average consumer a certain amount of credit” (para. 54).  A similar idea was expressed in Michelin & Cie v. Astro Tire & Rubber Co. of Canada Ltd. (1982), 69 C.P.R. (2d) 260 (F.C.T.D.), at p. 263:

. . . one must not proceed on the assumption that the prospective customers or members of the public generally are completely devoid of intelligence or of normal powers of recollection or are totally unaware or uninformed as to what goes on around them.

58  A consumer does not of course approach every purchasing decision with the same attention, or lack of it.  When buying a car or a refrigerator, more care will naturally be taken than when buying a doll or a mid-priced meal:  General Motors Corp. v. Bellows, 1949 CanLII 47 (SCC), [1949] S.C.R. 678.  In the case of buying ordinary run-of-the-mill consumer wares and services, this mythical consumer, though of average intelligence, is generally running behind schedule and has more money to spend than time to pay a lot of attention to details.  In appropriate markets, such a person is assumed to be functionally bilingual: Four Seasons Hotels Ltd. v. Four Seasons Television Network Inc. (1992), 43 C.P.R. (3d) 139 (T.M.O.B.).  To those mythical consumers, the existence of trade-marks or brands make shopping decisions faster and easier.  The law recognizes that at the time the new trade-mark catches their eye, they will have only a general and not very precise recollection of the earlier trade-mark, famous though it may be or, as stated in Coca-Cola Co. of Canada Ltd. v. Pepsi-Cola Co. of Canada Ltd., 1942 CanLII 344 (UK JCPC), [1942] 2 D.L.R. 657 (P.C.), “as it would be remembered by persons possessed of an average memory with its usual imperfections” (p. 661).  The standard is not that of people “who never notice anything” but of persons who take no more than “ordinary care to observe that which is staring them in the face”:  Coombe v. Mendit Ld. (1913), 30 R.P.C. 709 (Ch. D.), at p. 717. However, if ordinary casual consumers somewhat in a hurry are likely to be deceived about the origin of the wares or services, then the statutory test is met.

Furthermore, the Business Corporations Act, R.S.O. 1990, c. B.16, and the regulations thereto contain provisions forbidding the of names that are the same or too similar to that of another corporation; and accordingly, such provisions may provide instructive assistance to a court within litigation for the tort of passing off. Specifically, the Business Corporation Act, and the General regulation thereto state:

9 (1) Subject to subsection (2), a corporation shall not have a name,

(a) that contains a word or expression prohibited by the regulations;

(b) that is the same as or, except where a number name is proposed, similar to,

(i) the name of a known,

(A) body corporate,

(B) trust,

(C) association,

(D) partnership,

(E) sole proprietorship, or

(F) individual,

whether in existence or not, or

(ii) the known name under which any body corporate, trust, association, partnership, sole proprietorship, or individual, carries on business or identifies himself, herself or itself,

if the use of that name would be likely to deceive; or

(c) that does not meet the requirements prescribed by the regulations.

2. (1)Name” when used in the expression “if the use of that name would be likely to deceive” used in clause 9 (1) (b) of the Act includes,

(a) a name that would lead to the inference that the business or activities carried on or intended to be carried on by the corporation under the proposed name and the business or activities carried on by any other person are one business or one activity, whether or not the nature of the business or activity of each is generally the same;

(b) a name that would lead to the inference that the corporation bearing the name or proposed name is or would be associated or affiliated with a person if the corporation and such person are not or will not be associated or affiliated; or

(c) a name whose similarity to the name of a person would lead someone who has an interest in dealing with that person, to deal with the corporation bearing the name in the mistaken belief that they are dealing with the person.

Summary Comment

The tort of passing off as well as section 7 of the Trademarks Act, address the protection and rights of a business from certain types of abuse by a competing business whereas the names of businesses, or the names of products, may be confusing; however, the law requires much more than a similarity or likeness in that whereas it must be proven that the name at issue holds an established goodwill within the marketplace, there is deception or confusion (intentional or unintentional) of the public, and there is loss or potential for loss.  As to what would give rise to deception or confusion of the public, such is reviewed objectively on the basis of the "moron in a hurry" or "average hurried consumer" test rather than the reasonable person test routinely known in matters of law.


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Monday: 9:00AM – 5:00PM
Tuesday: 9:00AM – 5:00PM
Wednesday: 9:00AM – 5:00PM
Thursday: 9:00AM – 5:00PM
Friday: 9:00AM – 5:00PM

By appointment only.  Please call for details.

MUELLER
LEGAL SOLUTIONS

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