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Company Name And Trade Mark Conflicts

Too often, a limited company is registered under one name, but the name adopted turns out, either then or later, also to have been registered as a trade mark under the Trade Marks Act. Neither Companies House, nor the Patents Office, have any effective system for cross checking these conflicts, and the only solution is that once a company name is accepted by the Companies Registrar, then a trade mark search should be carried out before trading begins.

What happens if two companies do end up trading under the same name? The company has a duty to use its name, and the owner of the trade mark has the right to prevent anyone else using the name. How are these to be reconciled?

A case exemplifying the difficulties came before the Chancery Division in Scandecor Development AB v Scandecor Marketing Ltd and another (Times 9 March 198). The case title says it all, or nearly. Mr. Justice Lloyd referred to the history of such cases but also pointed out that the law now needed to be re-tested under the Trade Marks Act 1994.

The new Trade Marks Act provides that a trade mark is not infringed by somebody who uses their own name. In this situation, the company has its own name and the defence under Section 11 (2) (1) seems to apply. In an earlier case, it had been doubted as to whether the Act was intended to cover the use of company names. In that particular case, the company had not been using its entire, and proper name, and therefore the decision was perhaps not binding.

In any event, in this case, the Judge decided that a limited company using its full name did have a defence under the act.

It should be noted, that the defence also requires the use to be "in accordance with honest practices in industrial or commercial matters". This may sound an oxymoron, but it is not. In essence therefore a company who has long traded under its own company name, but has not registered that name as a trade mark, will have the general right to continue to use that name notwithstanding that somebody else registers it as a trade mark. On the other hand, a company deliberately registering under a name, in order to use that name knowing that it would conflict with an existing trade mark, would be very unlikely to have a defence. Please note also that this case deals only with the law of Trade Marks, and issues might also easily arise under the law of passing off.

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18 October 2013 197 18 October 2013