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Got a business name, but are you free to use it?

1 Jun 2017

 

You are about to start a business. You begin by asking yourself some of the common startup questions…

 

  • What should my trading name be?

  • What should my product names be?

  • How should I brand my services?

  • What should my logo look like?

  • What colour theme should I use?

  • Should I have a slogan?

 

And the list goes on.

 

In all the excitement of deciding on your business name and creating your new branding, it is easy to forget some of the legal issues which surround these startup steps.

 

That’s why we previously looked at what branding is, and why protecting it is vital for businesses.

 

Whether you opt to create your own brand, or instruct a specialist to do this for you, someone needs to take responsibility for answering that all-important question…

 

Am I free to use it?

 

Clearing your name

 

Clearance searches helps businesses answer this question. It is a type of research or due diligence which helps to identify if any of your naming or branding ideas are already in use.

This due diligence stage should introduce you to any businesses or competitors who may already be using the name you have chosen. This is why shortlisting names before committing to one is always good practice.

 

In many cases, just because someone is already using the same name, this doesn’t preclude you from using it too. What’s more important is the legal rights they have over it.

 

Remember, names aren’t the only aspect of your branding. You should also consider all other areas, and in particular, anything which can be protected under trade mark law.

 

Trade marks

 

A trade mark is a sign, expression, or design identifying products or services. It protects, for example, names, slogans, logos and symbols.

 

A trade mark provides the owner (or ‘proprietor') an exclusive right to use the mark they have protected, and this exclusivity allows them to bring a claim against anyone who uses that mark without their consent.

 

There are two features of trade marks which are particularly relevant to clearance searches.

First, trade marks are broken down into 45 classes of goods and services, covering everything from chemical products to legal services. You only apply for the classes of products or services for which you intend on using the mark. Often, businesses are permitted to use the same name where there is no overlap in the nature of the business, and therefore no likelihood of confusion for customers.

 

Second, trade marks are territorial. You apply for a trade mark protection in the specific countries or regions where you will be selling your goods or services. This can be a costly exercise, especially for businesses with an international presence, so a good branding strategy will ensure effective financial investment.

 

Trade mark searches

 

A trade mark search is essentially a search of the various trade mark registers that exist. As with any type of research or due diligence, it’s all about search strategy. Knowing what search criteria to use, where to look, how thorough you must be is all part and parcel of forming a comprehensive trade mark search strategy.

 

The reality is, no search is ever perfect or fully comprehensive. The extent of the search strategy really depends on your budget and attitude to risk. The more comprehensive the search, the less risk your business will be exposed to.

 

This is why a good trade mark search can cost anywhere between a few hundred pounds, all the way to tens of thousands. However, these can be negligible when compared with the cost of defending a potential trade mark dispute.

 

The risks

 

The risks of not clearing a name for use can be costly in terms of time, money, and business reputation. All that effort establishing goodwill in your business identity may be lost if you are forced to rebrand as a result of a dispute with another business.

 

Take these high-profile examples. Onedrive was formerly Skydrive, before having to rebrand because of trade marks owned by Sky. There are a number of other good examples, many of which you will be familiar with.

 

A rebrand may not seem like a big deal now, but as your business grows, so do the risks. Rebranding certainly isn’t cheap, especially when it comes to the types of organisations like those mentioned above.

 

Other rights

 

Unfortunately, it’s not just registered trade marks you need to be aware of. There are other ways rights can be obtained over a mark even if it has not been registered.

 

Sometimes businesses can acquire rights over a name or mark just by having used it in the course of trading. Where a business has been using a mark for a number of years, and customers now associate that mark with that business, they may have established goodwill in relation to it. This is known as a common law right over mark, and where common law trade mark searches comes into play.

 

Other searches

 

So, how would you go about searching for common law trade marks which are not available through the usual trade mark registers?

 

Well, in a similar way you would to find potential competitors, by searching any relevant public resources. The extent of the search really depends on the nature of the business, the mark you want to use, and where you intend on using it.

 

Typically, you could start with an internet search, looking for particular websites or business directories referencing the mark. Company registration databases could also highlight any businesses registered under the name. Finally, it’s also worth covering some of the larger social media platforms, which have become popular for businesses to offer their products and services through. Again, it all comes down to having an effective search strategy.

 

Industry trends

 

As technology improves, and collaboration between the relevant trade mark organisations increases, trade mark searches are becoming more comprehensive, cheaper, and easier to carry out. This should help businesses to cope with the ever-widening scope of where trade marks may be used and found.

 

More importantly, this will have a big impact on the ability for businesses to monitor their trade marks (otherwise known as trade mark watching). Autonomous tools can trawl through huge amounts of information to see if a mark, or something similar, is being used by a potential competitor, allowing businesses to act quickly to bring its use to an end.

 

Am I free to use it?

 

You will never know for certain, but there is plenty you can do to minimise the risk of a rebrand.

 

Pick names which are distinctive and unique to you and your business. Shortlist names before deciding on one. Carry out your own search first to see where you stand with each of them.

 

It can get more complex with logos and other aspects of your brand, and when trading internationally, so seeking professional advice is very important.

 

 

 

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