Choosing your business or brand name – key legal guide

Whether you decide that your brand will be plain block type, stylised or a logo, in colour or black and white – what is important is that you consider the value, uniqueness, quality and expertise of the product or service that you have developed.

Be creative and pick a name that will stick with your customers and clients for all the right reasons! If only that was all there was to it.

We understand that choosing your business (or brand) name or image can be a complicated process. So, we have put together this briefing note, as food for thought, in considering your brand future.

In addition to the above, there are several legal considerations to be made and hurdles to overcome – as such we recommend that sufficient time, care and resources be given to choosing your business (or brand) name.

Whether you are looking to register your business name with Companies House or not – to simply market you will need to follow the rules for choosing a business name.

Choosing a business or brand name and considering possible attacks

There are restrictions on the choice of registered name that a company may adopt both on incorporation and upon a later change of name. Registration of a company or partnership name or using a business name does not mean that it is protected as a trade mark – you have to register trademarks separately. Nor does registration or use mean that it is protected from challenge by a third party at a later date.

 It is possible for an attack on the name to be made under one or more of the following four heads:

1. Direction by the Secretary of State

A direction instructing the company to pass a resolution to change its name and register the new company name at Companies House within a specified time:

  • This may be as a result of a third party objection that whilst the company’s name is not the same as another registered name, it is nevertheless ‘too like’ another name. This will be the case if the similarity in the names may create a danger of confusion between the two companies. The Secretary of State may within 12 months of registration direct a company to change its name in these circumstances (section 66, 67 and 68, Companies Act 2006).
  • Where the Secretary of State has reason to believe that a company provided misleading information for the purposes of registration, the company may within five years of registration be directed to change its name (section 75, Companies Act 2006).
  • The direction may be made at any time during the company’s life, where the Secretary of State believes that the name gives such a misleading impression as to the company’s activities, that the public are likely to suffer harm (section 76, Companies Act, 2006).

2. The tort of passing off

Passing off is where a person seeks to take advantage of the reputation in another’s goods or services by adopting a similar name or get up or otherwise implying a link between his product or service and another’s.

The ‘victim’ would need to prove:

  • That it has goodwill in its name;
  • That misrepresentation by the new business to the public (whether or not intentional) is leading or likely to lead the public to believe that the goods or services offered by the new business are those of the ‘victim’ (i.e. confusion of origin); and
  • That damage is caused as a result. Remedies available to a ‘victim’ of passing off, if successful in his claim, include: court injunction against the other party using the name; damages; and delivery up of all / any infringing goods. It is difficult to predict the likelihood of success of such actions, as they turn on their facts.

To avoid such an action, when choosing the name, checks should be made in internet search engines or domain name registries, local phone books and any relevant trade journals or magazines to see whether another business is using the chosen name. There is no central register that can be checked for this exercise, to this end choosing a business name is never entirely without risk.

In all cases, in addition to any damages payments that may be due to any third parties, if a business is forced to change its name it is likely it will also suffer the costs entailed with informing customers and suppliers of the change and reprinting corporate stationery and information (e.g. advertisements, signs etc).

3. Trade mark infringement

Where the company uses a name, which is the same, similar, or even in some cases dissimilar to a registered trade or service mark, the proprietor of the mark may be able to bring an action for trade mark infringement against the business.

Such an action may be successful if the trade mark owner can show that either the goods / services being provided by the business are similar to those for which the trade mark is registered OR the business is taking unfair advantage of (or is detrimental to) the distinctive character of the repute of the trade mark (i.e. that the trade mark is so strong or well known that by using it in your business name you would be taking advantage of the trade mark owner’s reputation in that mark).

A trade mark is a property right and consequently if someone else were to use a trade mark without the owner’s permission, the owner could take action against them. The owner of a trade mark has a statutory monopoly over the use of that mark in the context of the trade in which it has been registered and hence an action for infringement proceedings by that owner are easier to pursue than an action based on passing-off (there is no need to demonstrate goodwill / misrepresentation / damage).

Remedies for trade mark infringement are the same as those available for passing off.

4. Similarity to name – goodwill

Any person may object to a business or brand name if the name is the same as a name associated with the applicant in which he has goodwill OR sufficiently similar to such a name that its use within the UK would be likely to mislead by suggesting a connection between the business and the person objecting (section 69, Companies Act 2006).

The objection is lodged with a company names adjudicator, who makes a decision on the merit of the objection and can direct that the name is changed.

This objection procedure is only to be used with regards to ‘opportunistic’ registrations, examples of which are: when someone registers one or more variations of the name of a well-known company in order to get the latter company to buy the registration(s) or where someone knows that a merger is about to go ahead between two companies and registers one or more variations of the name that the newly formed entity may want.

Intellectual property rights in your name

Branding adds value and profitability by enhancing customer awareness, quality perception and customer loyalty – but do you own it?

Intellectual property rights can be subdivided into two types, those which:

  • Arise automatically.
  • Depend on applications to public registries.

In creating your business name or brand, the intellectual property rights which are likely to arise automatically are copyright, unregistered designs, unregistered trade marks (common law rights in passing off do not confer IP rights. They only constitute rights to restrain misrepresentations which are likely to damage a claimant’s goodwill) moral rights and confidential information.

For copyright, it is sensible to ensure that the originality of the work, the date of creation and the authorship can be proved. Therefore, the sequence of drawings, circuit diagrams, specifications or other materials leading to the final design should always be retained and dated. When the work is in use, the copyright ownership should be indicated by including the name of the copyright owner, the copyright mark (©), the date when the work was created and a statement that unauthorised use or copying is not permitted. Although not necessary, this is a useful indication of copyright protection and ownership.

Unregistered designs are subject to similar principles and should be marked with the words ‘Design right’, the name of the design right owner and the year it was first marketed.

Unregistered trade marks arise through use in a commercial context, whether directly in connection with products or in marketing and advertising. It is sensible to ensure that they are used in a way which enhances their distinctiveness and their association with the owner. It is also useful to mark them with the letters ‘TM’.

Unregistered trade marks may not be marked with the letter ‘R’ as this is for registered marks only, and it is an offence to use this if a mark is not registered.

Do you own the intellectual property rights?

If you have used a third party to come up with or create your business or brand name, by law, the intellectual property rights will vest automatically in the third party as the creator of the relevant works even though you are paying for their creation.

It is therefore important to ensure that, when using a third party, an appropriate written agreement is in place, transferring ownership of those intellectual property rights to you or your business.

We can help by preparing this for you or assisting in negotiating an agreement presented to you which contains unfavourable terms.

Why register a trade mark?

Consistently using the same branding and marks on your goods and services will result in your business acquiring distinctiveness and will assist in distinguishing your goods or services from those of your competitors.

Having built up a reputation in your brand, unauthorised use of it by a third party could result in you, the party who expended the time and effort in building the same, losing business and goodwill.

Registering your brand(s) / mark(s) as trade marks will give you the owner a ‘proprietary’ right to use them. Your ownership of your registered trade mark will be sufficient to evidence of your right to stop another from using it (or a mark confusingly similar to your trade mark) on goods or services which are the same as (or similar to) the goods or services for which your mark is registered. In such situations there will be no need for you to demonstrate damage / loss arising from that other party’s use.

This should be contrasted with an unregistered brand / mark, where the owner must rely on a ‘passing-off’ action to stop another party from infringing the mark. Passing-off claims are often difficult to prove and can involve lengthy and expensive legal battles. To succeed in such an action, the owner must produce evidence of his ownership of goodwill or reputation in the mark, and evidence that the unauthorised use of his mark amounts to a misrepresentation which is causing, or is likely to cause, damage.

Gathering evidence to demonstrate that there is a misrepresentation, usually in the form of evidence of confusion (or a likelihood of confusion), is labour intensive and costly. Further, protection of a new, unregistered brand name or mark may be impossible since it may not have attracted sufficient goodwill to support an action for ‘passing-off’.

Holding a registered trade mark is a key part of any branding strategy and will provide your business with a ‘hook’ to hang other products or services on. Consistent use of the same branding will add qualities to your products and services; developing meanings, personality, values and associations in the minds of your customers, clients and contacts.

Further, registering your mark should act as a deterrent to others from copying your product or service name and if the trade mark is in an intrinsic part of your product, it may even prevent others from copying your product.

What is a trade mark?

A trade mark is any word, slogan, device or other distinctive feature used to distinguish the goods or services of one business from that of another.

To be registrable a mark, amongst other things, must be:

  • Distinctive in respect of the goods or services for which you are applying to register the mark; and
  • Not deceptive, or contrary to law or morality; and
  • Not similar or identical to any earlier marks for the same or similar goods or services.

A mark may be registered even before a business has put its goods or services on the market and acquired goodwill in respect of the same.

A trade mark is an asset

It is possible for a trade mark to acquire a value separate from your business and as such can be seen as an asset.

A registered trade mark can be used to raise vital finance; intangible assets, such as registered trade marks, are increasingly being used as security to borrow cash.

Further, registered trade marks have a ‘residual value’ so that even if the business stops trading, the trade mark registration may continue in existence and can be sold.

How wide is my protection?

You can apply for a UK trade mark, a European mark, a national trade mark (registered in a particular country or countries), or an international trade mark registration gained under a protocol known as ‘The Madrid Protocol’ (which offers the opportunity to obtain trade mark protection in up to 95 countries using one application). The type of trade mark you decide to register will be influenced by where your business currently trades or will trade in the near future. Consequently, the scope of the protection of your trade mark depends entirely on the type of mark you decide to register.

A UK trade mark registration can be used to prevent other businesses using the same (or similar) mark as yours for the same (or similar) goods and services in the UK.

A European trade mark covers all the member states of the European Union (currently up to 27) and can be used to prevent other businesses using the same (or similar) mark as yours for the same (or similar) goods and services in those countries.

A national or international trade mark registration under the Madrid Protocol will cover those countries in which you have decided to register and can be used to prevent other businesses using the same (or similar) mark as yours for the same (or similar) goods and services in those countries.

Please see attached a summary of the various classes of goods and services which you may wish to register for.

How much does it cost?

Should you require assistance with a European Union trade mark application, we would be very happy to assist you in your application to file the trade mark, or to help coordinate the filing with our third party agent on your behalf.

A mark which is substantially similar to yours and has been applied for or is registered in respect of the same goods and services as the ones you are interested in could hinder or even block your application. It would be better to know about this before you make an application to register your trade mark.

Please note it is difficult to tie down fees likely to be incurred for a national or international trade mark registration as the costs depend on the number of countries you wish to obtain registration for and the official fees payable to each national trademark office.

We can provide you with our estimated fees following our discussion of your needs.

How long will it take?

UK trade mark applications from filing to registration, assuming no objections are raised, will take around three to four months.

European trade mark applications from filing to registration, assuming no objections are raised, will take around five to six months.

Registration times for national and international trade mark applications will vary depending on which countries you choose to register in. We can provide you with an estimated timetable following our initial discussion.

How long does it last?

All registered trade marks, regardless of type, last for ten years from the date of filing. It is possible to renew a registered trade mark and such renewals last for further ten year periods; there is no limit to the number of renewals you can make.

Please note if you do not actively use your registered trade mark for a period of three to five years another party could apply to have it removed from the trade mark register (in legal terms ‘revoked’) through lack of use.

Watching services

Once you have successfully registered your trade mark we recommend that you subscribe to a notification service, as this is the simplest way to take active steps to watch for third party applications which might conflict with your mark. Agents look out for and report on the advertisement in the Trade Marks Journal of any mark which is the same as, or similar to, your marks and notify you promptly if it finds one. This ensures that you are in a position to oppose registration or use of the mark promptly.

A watching service will also reduce the risk that a mark may be published, but you do not find out about it until after the period for opposing the mark has ended.

We can help by assisting you in setting up a watching service with agents and / or reviewing the search results for you, providing a summary of any marks that we think are particularly similar to your marks.

How Moore Barlow can help

If you want a professional and personal service from experienced commercial and technology lawyers, Moore Barlow are here to help. We are recognised by the Legal 500 for providing excellent, proactive, and responsive practice, in addition to ranking in the Chambers and Partners directory and The Times Best Law Firms list.

If you want a professional and personal service from experienced commercial and technology lawyers, Moore Barlow are here to help. We are recognised by the Legal 500 for providing excellent, proactive, and responsive practice, in addition to ranking in the Chambers and Partners directory and The Times Best Law Firms list.

We have offices in LondonRichmondSouthamptonGuildfordLymington and Woking and offer specialist commercial legal services to clients nationwide. Contact Moore Barlow to find out how we can help you and your business.

If you require advice or assistance from a commercial law solicitor, contact our team.