A pub decides to change its name and hires a naming agency which comes up with a list of potential names that are not registered trademarks in the UK. On implementing the new name, the pub receives a letter from a US company with the same name, ultimately forcing it to change its name once again. This proves expensive. How could the pub have prevented this occurring?
In the UK, names and distinctive features are protected by trademark rights. Rights to trademarks in the UK can be obtained through use over a period of time and/or through registration as a trademark.
Trademarks are territorial in nature. This means that if a mark is registered in a particular country it will provide protection only in that country. But there are exceptions. If the trademark is famous like McDonald's or Coke then, despite the mark not being registered in a particular country, it may still be protected.
In addition, if a mark has been put to extensive use in one country but is not registered, it may still be protected, for example, by the law of "passing off", which prevents one company from misrepresenting its goods or services as being those of another.
To ensure that the pub is free to use its new name, it needs to check it's not infringing the trademark rights of another.
The trademark registers should be checked by a professional firm because rights in trademarks extend to similar trademarks, including conceptual, visual and aural similarity. Only skilled individuals are capable of ensuring that all risks are covered. Who would have thought that Pepsi would object to Ipsei?
If you can obtain clearance against trademark infringement, the common law right of passing off can generally be avoided. It's important to ensure that confusion is not likely to occur because of existing common law rights holders. Information on existing rights holders is available on the internet, from one's own marketing people or specialist investigators. Lack of this type of due diligence was recently highlighted in the EasyPizza case.
EasyGroup, controlled by Sir Stelios Haji-Ioannou, abandoned its High Court action against Easypizza, a north London food outlet which had traded since 1997. The case had become increasingly acrimonious, particularly as EasyGroup had started its own EasyPizza business in 2004.
The notable aspect of this case is that Easypizza had not followed best practice by registering its name as a trademark. EasyGroup, also, seemingly failed to carry out proper due diligence when selecting its name. It's arguable that the entire case could have been avoided had trademarks been filed and properly registered.
Before using a new name:
Check to see if it infringes any third party trademarks rights.
Consult a professional. Charges for clearing a single trademark are between £250 and £500. This is much cheaper than defending a claim for passing off or infringement.
Don't assume that if a mark is not registered you're free to use it. Famous names have extended rights and common law rights exist in unregistered marks. Do proper due diligence and get professional help.
Register your own trademark rights to ensure maximum protection of your branding. It's far cheaper and quicker to protect registered rights.
If branding is created by an external consultancy, ensure that you have those rights assigned to you by agreement.
The average trademark infringement case in the UK can cost up to £500,000 to defend. Rebranding can be embarrassing as well as expensive, not to mention the damage it can cause to goodwill. Best practice at the outset is comparatively inexpensive.