Date 8 August 2006
Trade mark registration is the best method of protection for trading and brand names. It ring fences the reputation and goodwill you develop in your names, enabling you to control third party use and avoid dilution of your efforts.
So, if you are starting up a new business, re-branding a going concern or introducing a new brand trade mark protection, and particularly registration, should be a priority. This article explains the basics.
Trade Marks
A trade mark is a sign or device that is capable of distinguishing one business or brand from another. A trade mark can be made up of words, signs, shapes and numbers. It can also include personal names. Trade marks can be registered or unregistered. The difference between them is that it is easier and generally less expensive to sue for trade mark infringement (registered) than passing off (unregistered).
Fact or Fiction
A common misconception is that by incorporating, a company or charity, proprietorship rights in the incorporated name have automatically been obtained. This is not the case. With various exceptions, Companies House will register a business name as long as the name is not identical to another. For example, the addition of ‘Group’ or ‘UK’ to what would have been an identical name, would be sufficient. The use of these words can cause confusion as they suggest that businesses that have identical names, save for example ‘Group’, are in fact group companies.
Choose A Good One
In short, avoid trade or brand names that are descriptive of the goods and services you intend to apply the mark to. The general rule is that trade marks that describe their goods and services cannot be registered. In some cases it may be possible to obtain a registration but it is likely to take considerable time and money to achieve it.
Carefully selecting a ‘different’ or unique trading name will help you to stand out from the crowd. The trade mark will be talked about and is more likely to be remembered. Good examples are Apple for computers and Kodak for photographic apparatus. Choosing a name that is similar to competitors’ trade marks can lead to confusion in the market. For instance, customers may purchase from a competitor or a county court judgement may be awarded against you in error. These are two examples I have recently dealt with for clients.
Clear Your Trade Mark
Checks can be carried out to make sure the trade mark you want to use is available. (Domain names should also be checked if you intend to have a website). This checking process is frequently described as a ‘Clearance Search’. Clearance of the proposed name should reduce the possibility of claims being brought against you for passing off or trade mark infringement, which could lead to you paying legal costs, damages and re-branding if you lose. It will also help your penetration of the market ie. check that the name you are using distinguishes you from your competitors.
A good place to start the Clearance Search is on the web. Search engines will provide you with a good idea of who else there is in the market using an identical name. A full Clearance Search will review trade marks that are similar as well as identical in the jurisdictions you intend to trade. This is to avoid infringement claims, which can be brought on the basis of similar names and similar goods or services or the fact there is confusion.
Domain Names
During the Clearance Search process you should check that domain names are available. Aim for top level domains names such as .com, .co.uk, .eu and .net as these are the most common domains and therefore increase your chance of being found. The more domain names you register the more you reduce the chance of third parties diverting traffic from your website, be it inadvertently or deliberately.
Consistent Use
By using your name in the same font, colour etc… you will raise awareness of your name and brand. Each marketing campaign will reinforce the brand identity. Circulating marketing materials in
different colours, sometimes using the trade mark and other times using an acronym will confuse the message to customers and dilute the impact of the campaign. Clearly, this is an unnecessary waste of resources.
If you have selected a descriptive name or brand, it will be more difficult to establish brand awareness, so consistent use is essential. Trade mark registration for a descriptive brand is difficult and proof that use has been uniform will support an application. Without a trade mark registration a passing off action would need to be brought to stop a third party using a confusingly similar name. Proof of reputation and goodwill is one of three elements of the claim. So, once again, consistent use of a trade mark, that has enabled the business to gain a reputation, will be necessary.
Ownership
If you commission work to be carried out for you, such as the design of a corporate logo you must make sure that you obtain an assignment of the copyright in the logo. If you don’t own the copyright in the logo and you wish to change it or reproduce it on a website, rather than just stationery materials for example, the designer may prevent you from using it without their permission or without a licence fee.
Portfolio Management
Trade marks and domain names should be registered in the name of the business. Should you wish to sell your business or attract funding it will be important that your portfolio of intellectual property is up to date. Trade mark registrations need to be renewed. Management of the portfolio will help budget projections and establish whether the current portfolio is suitable. In some cases some registrations may be allowed to lapse and new applications filed.
In a business sale agreement there will be warranties to be given by the seller that the intellectual property rights of the business are being sold free of any encumbrances. If the business is not the owner of the intellectual property rights, for instance trade marks, domain names, copyright in the website this would be a breach of the warranty or the agreement could not be signed until the intellectual property had been transferred to the business.
If you would like any more information about trade mark registration or management of your intellectual property generally contact Peter Goodman by email at peter.goodman@salaw.com or by telephone on 01727 790103
© SA Law 2006
Every care is taken in the preparation of our articles. However, no responsibility is accepted as being owed to any person or organisation that acts on the basis of information contained within them. You should obtain specific advice in respect of individual cases.