UK: What´s in a Name?

The extent to which the law prevents anyone from using ‘your’ name, be it your own name, the name of your property or the name of your business, is based on the notions that: (a) the public should not be misled; and (b) nobody should be able to take advantage of the hard work that you have put into your business or otherwise take advantage of your own assets.

The Trade Descriptions Act 1968 provides that it is a criminal offence to describe your goods or services in a false or misleading way. This prohibition is wide enough to cover false or misleading indications of approval or origin. If anyone were to claim, for example, that their produce comes from a farm that it does not, the Trade Descriptions Act could be used to secure a criminal conviction.

However, this is criminal law that is enforced by local Trading Standards Officers. The local Trading Standards Officer’s role is to ensure that the public are not misled as a result of a trade description. Trading Standards Officers are not there to prevent one business or person from exploiting another, regardless of how unfair that might be, unless there is a wider public issue at stake.

The law of passing-off is the historic means by which the goodwill that one has developed in a business is protected. In order to bring a claim of passing-off, a claimant needs to show three things:

1. that the claimant has established goodwill in his name, logo etc by having traded under it over a course of time
2. that the defendant has somehow appropriated that goodwill by making some sort of misrepresentation that is confusing or that is likely to confuse) the public; and
3. that as a result of that misrepresentation, the claimant has suffered (or is likely to suffer) damage.

The classic example of passing-off is where one business develops a reputation over many years for providing quality goods or services then, without the permission of that business, another business starts up under the same name, selling identical or similar goods or services, and the public believes the two to be connected and therefore gives its custom to the second business at the expense of the first. The law acknowledges that goodwill that is developed through trade is a valuable commodity that should not be unfairly exploited.

It is often very difficult to provide evidence of goodwill, misrepresentation and damage that is sufficient to bring a claim for passing-off. The law of registered trade marks is a statutory system which operates alongside passing-off. Once a registered trade mark has been secured, it is likely to be a more effective weapon against third-party businesses which are using confusingly similar trade names or logos.

It is a common misconception that anyone can register any word or name as a trade mark, provided that it has not actually been registered by anyone else. If the trade mark is one that is considered to be entirely descriptive, it cannot be registered. For example, nobody could register THE SHOE SHOP or TASTY MEALS as trade marks. Similarly, it is very difficult to register the names of geographical areas as trade marks – nobody should be entitled to stop you from using the name of your town in a description of your goods or services unless the location in question is very small and, ideally, already closely connected with the applicant’s trading activities. HIGHGROVE and LONGLEAT would be registrable but WALES and BATH would not. Made-up names, on the other hand, such as KODAK, or names which bear no relation to the goods or services for which they are registered, such as ANCHOR for dairy products or AMAZON for books, are much more distinctive and much more likely to be registered.

Once you have secured a trade mark registration, you are not necessarily in the enviable position of being able to prevent anyone in the world from using that name for anything. Trade mark registrations confer monopolies on their users that are limited in two very important respects:

1. in respect of the territory in which that registration is enforceable; and
2. in respect of the goods and/or services over which that registration is enforceable. The register is divided into 45 classes of goods and services in an effort to prevent over-wide monopolies arising.

If you wish to protect your trade mark in the UK, you have the choice of registering it at the UK Trade Marks Registry in Newport, Wales (giving you a registration that is enforceable anywhere in the UK) or you can register it at the European Union’s Registry in Alicante, Spain (which is enforceable anywhere in the Union including the UK). Of course, if you wish to have protection anywhere else in the world then, subject to local law requirements, you are free to approach each and every trade mark registry in the world.

When registering a trade mark anywhere, you will be asked to provide a detailed list of the goods and/or services with which you are (or are likely to become) involved and over which you would like a monopoly in your territory. The public are smart enough to know that, just because two entirely different goods have the same name, it does not necessarily mean that they come from the same place. For example, few would think that LOTUS cars come from the same manufacturers as LOTUS software, LOTUS soups or LOTUS water fountains. These Lotus businesses can happily co-exist, each with its own LOTUS trade mark registration covering its own particular field of activity.

The cost of trade mark registrations varies, depending on the number of territories in which you require protection and the number of goods/services that you wish the registration to cover. In the UK, applications are filed with the Trade Marks Registry at the Patent Office, an executive agency of the DTI.

If you are not familiar with the papers, it is prudent to seek the advice of a solicitor or trade mark agent. A simple, one class UK application can cost as little as £200 but only if you do not involve professionals.

If you have goodwill tied up in a trade name or logo, it might be worthwhile giving trade mark registration some thought. There is inevitably a cost-benefit analysis to be carried out, but trade mark rights are intellectual property rights that can be bought, sold, leased and even mortgaged and, if those rights are registered, their value to potential buyers, hirers and mortgagees is significantly increased

One final cautionary note. Registered trade marks and passing-off rights are potentially powerful weapons, whoever they belong to. When selecting a name for a new business, it is important to make enquiries to check whether you are likely to be infringing anyone else's rights. You can search the Trade Mark Registry for third-party registrations and applications, but do not forget that passing-off rights can exist even if names are not registered. Trade directories and judicious enquiries are needed here. This research is a very important piece of risk management at the business start-up stage; changing the name of a business after it has started trading can be a very painful and expensive exercise.