Workshop: commercial: Registering trademarks

A client walks into your office. He says he wants to start a retail ? stationery business with an online offering, and explains he has registered the domain name and wants you to set up a company for him. He says it should be straightforward (don't they always) as he wants to use his surname and initials. Then he explains his name is William Herbert Smith and so the name he wants is WH Smith's. Do you (a) suggest he goes elsewhere, or (b) say you can help him?

Hopefully the latter, and if you have some working knowledge of IP law the problems facing your new client may be capable of resolution in some way or other. This is perhaps an extreme example, although not as far-fetched as one would imagine, but the growth of the internet and the ability of even the smallest of businesses to trade internationally means that the need to address IP issues for even start ups is greater perhaps than at any time previously.

Building a reputation can occur quickly and in more than one jurisdiction, yet generally speaking there remain significant opportunities for confusion and conflict in the marketplace, which you can help your client avoid.

In the hypothetical case of Mr Smith, he could probably expect to be hit with an action for trademark infringement as well as passing off, based on the rights and reputation enjoyed by his more famous high street namesake. But he also has a defence to the extent that he is using his own name (under the provisions of the Trade Marks Act 1994 section 11(2)(a) and Community Trade Mark Regulations 12(a)).

If Mr Smith is up for a good scrap, he can join the ranks of claimants and defendants who have ended up fighting through the courts over the right to trade under their own name. Paolo Gucci was vindicated over the use of his birth name in competition with his own family's company. But Elizabeth ?Emanuel found out the hard way that, ?although she could trade in her own name, she could not prevent the acquirer of the trademark rights from selling clothing under that name too, as she had in fact contractually lost the exclusive rights. In what the judge described as an instance of 'lawful deception', the purchaser of the trademark was permitted to continue trading as it was unlikely that customers of high-end fashion clothing were deceived, as designers' names regularly change hands.

Ms Emanuel reportedly had the benefit of 299 lawyers advising her pro bono '“ would you really care to make it up to a round figure?

Cybersquatting and 'slamming'

I am sure William Herbert Smith is as honest as the day is long, but others have been rather more 'creative' in seeking to carve out a piece of the action. BT (and others) v One In A Million highlighted the issue of cybersquatting, and not unexpectedly the Court of Appeal came down heavily on the side of the trademark owners against what was dubbed 'a vehicle of fraud'.

And yet most days of the week we encounter the phenomenon known as 'slamming', the 21st century offspring of the cybersquatter: domain name registrars, typically in the Far East, send alarming emails to legitimate trademark owners, warning ?that they have only 48 hours in which to block an 'applicant' who is seeking to register a family of URLs based on our client's brand name. What can look like a small outlay to secure the.cn, .hk and .tw domains can of course balloon into further expense, ?with additional variants and more TLDs (top level domains). As trademark rights are territorial, this is an opportunity to determine whether the client has any real interest in securing those markets and if so then file trademark applications that will 'trump' any domain name.

Meanwhile, the rules at Companies House still allow for the incorporation of near-identical company names that would never be permitted under trademark laws. The limitations of 'DIY' when setting up a business often come under the spotlight only after a new client receives a cease and desist letter because the name that Companies House nodded through suddenly turns out to infringe a registered trademark. It can be distressing to break the news to a three-year-old SME that the trading name was in fact never safe to use.

And it is not only small traders that get caught out: Sainsbury's, John Lewis, Waitrose and Top Shop have all been registered as trademarks in China by parties unrelated to those well-known British brands. And, in Germany, the mighty Google's use of its Gmail brand was thwarted by a local registrant with a near-identical (good faith) mark.

So, the top tips for the practitioner are:

? Always run full trademark searches when considering a brand or company name for a client (www.ipo.gov.uk provides a starting point).

? Check whether domain names are available.

? Check the position at Companies ?House (www.companieshouse.gov.uk).

? Run a general internet search to see if and how the proposed name appears.

While IP cases often become complex, the principles of the law remain pretty simple: to avoid confusion in the market and thus prevent the average consumer being confused. And at least our Mr WH Smith has had the sense to seek advice, rather than relying on the volumes of free but unfiltered information and DIY services available online. And he should probably rebrand rather than risk spending a fortune in the courts'¦ Let's hope his mother's maiden name isn't Ryman.