Why you need to be concerned about your business name

Here are two very basic questions every business needs to ask itself:  Am I unknowingly running the risk of trade mark infringement and being forced to rebrand? 2) How would I stop someone using a similar trading name to me, especially if I got there first and they are taking away my market share or confusing my potential customers?

Company law is different from trade mark law

There is a popular misconception that once a business has a domain name or, even better, a Companies House registration as a limited company, this gives entitlement to trade under that name. In fact, and perhaps surprisingly, this is NOT the case. On the Companies House website under the FAQs it sets this out clearly:

“Does the registration of my company name with Companies House also mean that my trade mark is protected? No. Company law is different from trade mark law. You cannot stop someone using a trade mark, which is the same or similar to yours, merely by registering your name with Companies House. You should ensure that your company name does not conflict with a trademark.

How many people in fact notice this or take it in before registering as a limited company or starting to trade?

The value of a protected name

So what is at stake? A name gives a business its identity and makes it different from competitors. As a brand it can project the values you want to communicate to customers about your products or services, and it can eventually become a quantifiable business asset which is quite separate from the tangibles of your business. It can have huge value which does not depreciate.  Banks have even started to use (protected) brands as security against loans. Just think of the big brands – Coca Cola, Virgin, Intel, Microsoft. Their value – in the billions – is in the brand rather than in the products. Brands can be sold, licensed and franchised. But only if they are protected and not vulnerable to attack.
The law can give wide protection but beware of not knowing the law!

Because a brand can generate huge consumer magnetism there are laws to protect the investment and work that goes into building a brand. Trade mark laws protect names by statutory rights and give them very broad protection, even against names that are not identical but in some conceivable way ‘similar’. What ‘similar’ is in law is not always the same as how we understand it according to common sense. Thus ‘quantum’ and ‘quantieme’, or ‘flexi air’ and ‘flex’, or’ alrex’ and ‘artex’, have all been held to be confusingly similar. It also depends on the goods and services under the brand, of course.  Did you know that in law if you sold shoes, say under the name ‘shine me’, it could be held to be confusingly similar to someone  who sold handbags under the name ‘shiny’? If that business had a registered trade mark, the law would allow them to seek an injunction to stop you trading under your name; they could seek damages or an account of profits, could ask for ‘delivery up’ of your unsold stock  or destruction of your branded goods, as well as their legal costs. This is all in the Trade Marks Act (1994) sections 9-19. The fact that no one had advised you at the outset, and that you may have been an ‘innocent’ infringer, is actually no excuse in terms of being in infringement. In other  words, there is no excuse for not knowing!

 First come first served

The law operates basically on a ‘first to file’ basis not ‘first to use ‘ (there could be what are called ‘common law’  considerations, but apart from being complicated, to base an action on common law grounds could be very expensive indeed). So the general rule is, whoever seeks name protection first through registration at the Intellectual Property Office is the winner.

The down side of this system, of course, is that someone can get there first with your name even after you have been trading for some time, and there might be little you can do about it. There are even some unscrupulous operators who browse through trade magazines, see what new businesses have started up or been trading for a short while, check the trade mark register and then proceed to file trade marks in the names of these new businesses. On registration they approach the new businesses, warn them that they are infringing and demand either a licence fee or offer the mark’s transfer, sometimes for sums of around £60,000, even though the actual registration fee is minimal. This is real and not made up. Imagine what that could do to your business!

Protect yourself

What can you do? First a check needs to be made on your name to see if it is available. You could try doing it yourself with the tools made available at the IPO website: www.ipo.gov.uk. But we would strongly advise professional help if you want a proper risk assessment. At Cam Trade Marks we specialise in just this sort of work, for major international clients as well as small businesses. If a name is free according to law, then we advise seeking registration as soon as possible  - so long as it is not descriptive but in some way memorable and distinctive- so that a) you are protected now and in the future, b) you can safely build on your brand, c) you can stop others from entering your name space.
Think about it, it is worth the investment. Protect yourself and do not open yourself to unnecessary business risks.

For more information see: www.camtrademarks.com. We give free initial advice so feel free to contact us at 01223 353299 or email: camtm@camtrademarks.com

Dr Roman Cholij,
Registered UK and European Trade Mark Attorney