For the latest in his business development series for Business Advice, GridLaw founder David Walker explains how identical brands are able to be registered and trade independently.
In my last article, I talked about the legal implications of creating a new brand for your startup, particularly the issues you need to consider when naming it.
But what happens when you come up with the perfect name for your business (or a product or service), and after carrying out a search, you find that another company is already using it?
Your initial excitement turns to frustration, disappointment and then perhaps dread as you contemplate the thought of going through the branding process again.
So, what do you do?
Do you have a plan B to fall back on? Are you going to try to come up with something completely new?
Maybe you could take a chance and see if you could get away with using it? But then you run the risk of being caught for trademark infringement or being threatened with other legal action. What do you do then?
Before making any rash decisions that could cost you dearly in the future, there’s a chance that you could legitimately use your first choice of branding and in this article, I’m going to explain how.
The “Polo” example
In some circumstances, identical brands can happily coexist without any confusion between them and no risk of one trademark owner suing the other. I like to use the name “Polo” as a good example of this situation. “Polo” is registered as a trademark for clothing by Ralph Lauren, cars by Volkswagen and confectionary by Nestle.
This is possible because the purpose of a trademark is to distinguish your products and services from those of your competitors.
All products and services are registered in different classes (there are 45 in all) so when you’re searching for existing brands look carefully at the classes of products and services they’re registered in. If your products or services fall into a completely different class to the existing brand (like the example above) you may be able to use it.
Even if the existing trademark is registered in the same classes you want your proposed name to be registered in, all is not lost. If, for example, you’re planning to operate in a completely different industry, so there’s no chance of your customers being confused about who they are buying the products or services from, you could still use your proposed name.
However, you would need the existing trademark owner’s permission first.
If they did grant you permission (and there’s absolutely no obligation for them to do so) they could require you to enter into a trademark coexistence agreement. This is a contract between the two parties where you agree the grounds rules of the two trademarks existing side by side.
The contract could, for example, place restrictions on the industries you each work in now or are likely to in the future. Alternatively, it could specify geographic limitations on where you can both trade. The agreement may also cover situations such as the action to be taken if the trademarks are infringed.
All of this is important because, having gone to the trouble of protecting your brand, you don’t want its strength to be diluted or lost because of someone else not being as vigilant as you. If one party doesn’t fulfil their part of the bargain it is relatively straight forward for the other party to enforce the contract against the other.
Having said all of this, if you have a startup with no trading history and no prior reputation, you should not pick a name that is the same or similar to a famous brand, even if they do something completely different to you.
This is because of the overall strength and reputation of their brand. If they’re a household name, it would seem like you’re trying to build your business off the back of theirs. This would be unfair after the huge investment they would have made in building their brand and they would be concerned that your product or service could damage it.
So, they could stop you doing this even if they didn’t have a trademark registered in the particular class you’re interested in.
As you can see, it is possible for identical brands and names to coexist. However, you need to think very carefully about whether this is the best solution for your business.
For example, even if you get the permission to use the name you want, are the domain names and social media addresses going to be available for you?
What happens when someone Googles your name? You may struggle to get anywhere near the top of the searches if someone else is already well established there.
Most people want a name and brand for their business that is unique to them. However, in some cases there may be a good reason why they want to use a particular name.
So, if this is you, and someone else has already registered a name that is perfect for your business, you may still be in with a chance of using it. However, it would be best to take professional advice before committing yourself to it as you need to tread very carefully.
If you are deciding on a new brand for your business and you would like to know more about what you can or cannot protect, please feel free to ask by emailing me at firstname.lastname@example.org.
Catch up on the rest of David Walker’s startup series:
- Starting a new business? Make these your legal priorities
- Choosing the best business structure for your company
- Why it makes sense to adopt a limited company structure
- Overcoming branding issues for a new business
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