Business development · 29 August 2017

A checklist of legal issues to consider when rebranding a small business

Portrait of a young man and woman holding up an open sign in their store
When rebranding a small business, carry out a thorough search on the new brand as soon as you can

For his latest article, GridLaw founder David Walker gives readers an essential checklist of legal issues that will need considering when rebranding a small business.

Brands evolve, so it’s inevitable you will go through one or more rebranding exercises during your business life. Rebranding is a risky process, so whilst it may be a marketing-lead exercise, it’s vital to keep the legal considerations in mind too.

This checklist will help you safeguard against a rebranding disaster by ensuring the most important legal points are covered.

Start by making a plan

You need to be clear about what you’re rebranding and why. For example, are you rebranding a product, service or your whole business? Are you changing a name, logo or strapline?

Or, are you simply refreshing your brand, solving a problem with your existing brand or amalgamating brands (perhaps after a merger between two businesses)?

Depending on the answer to these questions, there will be different legal implications to consider, some of which I will cover below.

However, when forming your plan, don’t focus solely on the launch of your new brand, you must also decide how best (and when) to retire your old brand.

Make sure your proposed brand doesn’t conflict with anything that already exists

The last thing you want is to settle on a perfect new brand, only to find out that you can’t use it. So, to prevent this, carry out a thorough search as soon as you have an idea for a new brand.

Search the intellectual property office database to see if it, or something confusingly similar to it has already been registered as a trademark. If this search is clear, search the Companies House register to see if there are any companies with the same or a similar name.

If both of these searches are clear, do a general Google and social media search to see what else comes up.

These searches will help you find any unregistered trade marks. These general searches will also enable you to see what your clients will see when they search for you. You don’t want any unexpected PR blunders overshadowing your relaunch!

If you do find an existing brand that conflicts with yours, don’t panic, there’s still a possibility that you may be able to use it. For more information on this, please see my previous article on how two identical brands can co-exist.

If you really can’t use the proposed brand, it’s far better to find out at this stage before too many resources are committed to it or before you face legal action for trade mark infringement.

Think about how your new brand will be protected

Rebranding is a huge investment in time, effort and money so you will want to protect your new brand. The best way to do this is to register it as a trademark, or series of trademarks. However, not all brands are registerable.

To be registerable, your brand must be unique. Trademarks give you the exclusive right to a word, logo, phrase, sound, colour or any combination of these so it mustn’t be the same or confusingly similar to any existing brands. This is one of the reasons you must carry out a trademark search (see above).

Assuming the searches are clear, the next requirement for a trademark to be registerable is that it must be distinctive. If the brand is descriptive, it won’t be registerable. My previous article on overcoming branding issues for a new business will give you some more guidance on this.

Some brands can’t be registered as a trademark. These unregistered brands rely on the strength of their reputation to protect them. If you launch a new brand without any protection in place (either because it can’t be registered or you choose not to register it), it will have no reputation and will be vulnerable to attack.

In some cases, it could take years to develop a reputation that is strong enough to protect the brand so ideally, have the trade marks registered and your brand fully protected before you launch it.

Comply with all legal formalities

Renaming a company adds additional formalities to your launch plan. You will need to check the company’s articles of association or shareholders’ agreement to be sure, but most likely the change of company name will need to be approved in a company meeting.

This will require a special resolution to be passed with at least 75 per cent approval. Once approved, notify Companies House by filing form NM01 and paying their fee.

The Companies Act (and other legislation) sets out your obligations to clearly display the name of your company to the public.

This means you will have to update all of your business stationery, any signs at your premises, your website and invoices etc. to include the new company name. All of this needs to be ready for your launch date.

Notify everyone

Rebranding is an excellent marking and PR opportunity and you will undoubtedly want as many people as possible to know about it.

Make a list of everyone who needs to be informed, especially if the company name has changed. For example, all of your clients, suppliers, the bank, HMRC, trade associations, your landlord and everyone else you have dealings with must be properly notified.

Decide what to do with your old brand

It’s easy to focus all of your attention on your new brand, but you have to decide what to do with your old brand.

Unless they’re renewed, trademarks automatically expire after ten years so you may decide to do nothing and just let them expire.

However, you need to be aware that if you don’t use a trade mark for five years or more, a competitor could apply to the Intellectual Property Office to have it cancelled for non-use.

If you didn’t have any registered trade marks, the strength of your old brand’s reputation will decline the longer it goes without it being used.

What would you do if a competitor started using your old brand and tried to take over your rights to it? Would you mind? Would you try to stop them?

These are important considerations and you may decide to maintain your old brand until the new brand is firmly established.

Maintaining your old branding, at least in the short term, could also be a precaution against the new brand failing. If you needed to, you could revert to your old brand again.

Relaunching a brand is an exciting time for a business but the process needs to be properly planned and managed to avoid a rebranding disaster.

If you have any questions about the legal aspects of rebranding any part of your business, please feel free to email me at editors@businessadvice.co.uk.

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ABOUT THE EXPERT

David Walker is the founder of Grid Law, a firm which first targeted the motorsport industry – advising on sponsorship deals, new contracts and building of personal brands. He has now expanded his remit to include entrepreneurs, aiding with contract law, dispute resolution and protecting and defending intellectual property rights.

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