Your product or service’s brand name is how you promote and advertise your business—and it’s what your customers use to recommend you.
Using a strong brand name, your business becomes better known and builds goodwill in its name.
It makes sense, therefore, to own the rights in the name.
You should check online and offline to see if anyone else is obviously using the name. If you don’t make sure that you can use a name, you may risk receiving a cease and desist letter one day.
If your brand name is available and is not purely descriptive—it would be wise to register the name as a trademark.
Here are six key points to help you understand how trademarks operate.
1. Similar trademark names are a problem
The main objective of trademarks is to avoid customer confusion about the source or origin of goods and services.
If you choose a brand name that’s already registered, it almost certainly won’t be enough just to make slight adjustments to the name (such as in the spelling or adding an extra word) to avoid the risk of a trademark infringement claim.
Look at the issue from the customer’s point of view. Without the protections of the trademark system, consumers wouldn’t be able to rely on finding products and services they liked in the past and want to buy again. (Or finding products and services they didn’t like and want to steer clear of!).
If competing brand names are too similar, customers can be confused and disappointed if they mistakenly purchase the wrong product or service.
The more distinctive your brand name, the easier and more affordable it will be to take action against anyone who tries to piggyback on your success.
2. Company and domain registrations are not enough
Owning a company name or a domain name does not automatically give you a right to own the trademark rights in that name for your business, or prevent others from using a similar name.
Even if you have registered the .com domain name and a limited company, you still need to check that you may use the name for your purposes.
You may 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.
Your rights depend on the business activity you want to use it for. For example, WWF and WWF had a long drawn out battle before the Wrestling Federation conceded defeat against the World Wide Fund and changed its name.
3. There is a difference between registered and unregistered trademarks
In the UK, it is not compulsory to register a trademark to use it as a brand name.
And small businesses can often view registration as an expense they can safely defer to a later date.
However, don’t be lulled into a false sense of security: your rights are much more limited if you don’t register your trademark.
Registering your brand as a trademark means you receive notice of, and can object to, a trademark application made by third parties for a similar name. And—as with a domain name—you always run the risk of someone else registering the trademark before you get around to doing so.
If you’ve been using a name for a long time without registering it, you may have built up sufficient rights in it to prevent another party using the same name on the grounds that they are ‘passing off’ their business as yours.
But it costs a lot of time and money to take action in these situations and you face all the uncertainties inherent in litigation.
4. Trademarks are territorial
Trademarks are registered on a country-by-country basis.
So, if you register a trademark with the UK’s Intellectual Property Office, it will give you the rights to use your mark in the UK.
If someone in another country used and registered the same mark, however, your UK registration does not give you the right to stop them.
At least until the legal ramifications of Brexit become clearer, the position in the UK is complicated by the fact that it’s possible to register a trademark—an EU Trademark—that is valid across all 28 member states of the European Union. If someone has registered an EU Trademark before you register a UK trademark, their EU registration would trump your rights.
5. Trademarks comprise certain categories of goods or services
It is possible for several businesses to share the same brand name as long as the businesses are not in competition with each other. An example, is Polo which is registered by separate businesses for cars, confectionary and clothing.
This is because trademarks are registered against types of goods and services. There are 45 classes in all and you can register a mark in several classes if your business activities cover more than one class.
The overriding consideration is whether the names cause, or might cause, confusion to customers and clients looking to buy products or services.
So, if your business makes ball bearings (covered by class 6) and you want to use a name that is already registered by a firm of accountants (covered by class 35), there’s a good chance that would be OK. However, if you were a business consultancy (also covered by class 35), the accountants would probably be able to prevent your use of the same name because that might be confusing to potential clients.
6. The most famous marks can be an exception to the classification rule
A very famous mark may enjoy broader protection than an ordinary mark, because of its widespread reputation or recognition.
Such “household name” marks are often not subject to the classification restrictions.
If you were to try to register Coca-Cola as a trademark—even if you only make ball bearings—the soft drink manufacturer would probably be able to prevent your use of the name.
The law recognises that registration in such circumstances is inappropriate because it would amount to taking unfair advantage of the mark’s fame and its use might have a detrimental impact on the well-known trademark.
To learn more about these and other issues you should consider before choosing your brand name, read my book Legally Branded.