Your name is what you use to promote and advertise your business and it’s what your customers use to recommend your product or service. You build up goodwill in the name through using it.
Therefore, it makes sense to own the rights in it by registering the name as a trademark as a priority. Once registered, the rights in the name may be transferred just like any physical property.
The choice of name is important from a legal perspective. The more distinctive your name, the easier and more affordable it will be to take action against anyone who piggybacks off your success.
There are 6 key points to take into account in order to understand how trademarks operate.
Similar trademark names are a problem
An important objective of trademarks is to avoid customer confusion about the source or origin of goods and services. This means if you wanted to choose a name that was already registered, it wouldn’t be enough simply to make slight adjustments to the name (such as in the spelling or add an extra word) in order to avoid clashing with an existing registration.
The broad scope of protection of trademarks looks at the issue from the customer’s point of view. Without the legal protection of trademarks, consumers cannot rely on finding products and services they’ve liked in the past and want to use again. If the names are too similar, the customers can be confused and disappointed if they mistakenly purchased the wrong product.
Company and domain registrations are not enough
Owning a company name or domain name does not automatically give you a right to prevent others using a similar name. Even if you have registered the .com of the name or limited company, you will still need to check the trademark register first.
You may well be able to use the company or domain name you’ve registered, provided you don’t use it in competition with an existing business that has trademark rights in the name. It depends on the business activity you want to use it for and whether you will have a legal problem.
There is a difference between registered and unregistered trademarks.
It is not necessary to register a trademark in order to use a name. But there are serious downsides to not registering a name. For example unbeknown to you, someone else may have registration which prevents your using the name, or someone else might begin to use the same name or register it first.
If you have been using a name for a long time, you may have built up sufficient rights in it to be able to stop another party using the same name on the grounds that they are ‘passing off’ their business as yours. Bear in mind though, that it costs time and money to take action in these situation and you face all the uncertainties of litigation.
Trademarks are territorial
Trademarks are registered on a country-by-country basis. So if you register a trademark with the UK Intellectual Property office, it will give you the rights to use your mark in the UK. But if someone based in another country uses the same mark, your UK mark does not give you the right to stop them.
Trademarks comprise certain categories of goods or services
Names can be shared by more than one business, provided the businesses are not in competition with each other. The reason for this is that trademarks are registered against classifications, and you are permitted to use the trademarks for those predefined categories of business.
There are 45 trademark classes in all. The overriding issue is that the names must not cause confusion to consumers looking to buy products or services.
Famous marks are an exception to the classification rule
A famous or well-known mark may enjoy broader protection than an ordinary mark, in view of its widespread reputation or recognition. Such marks are not subject to the classification restrictions.
The objections to applications trying to register famous marks in different classes is that the applicant is taking unfair advantage of the mark’s fame and its use could have a detrimental impact on the well-known trademark.
These consideration need to be understood before choosing a brand name. To learn more, read ‘Legally Branded’ written by Shireen Smith.