Business Names

[autolycus]

I have a part-time business/hobby teaching people to drive. It's just a bit of fun designed to add a bit of interest to life and cover the running costs of one of my cars. I do about 4-5 hours of lessons per week.

I started doing this in October 2004 and operate as a sole-trader. The trading name of the business takes the form XYZ School of Motoring.

A few days ago I got a call from a guy who says he is the owner of XYZ School of Motoring Ltd (registered before I started up, according to Companies House). He is based in a different area from me but is about to expand into my area and wants me to stop using the XYZ name. Not sure how he found out about me but, as he asked for me by name, I guess it was from the driving school website which includes my name in the smallprint.

According to his solicitor (he says) he owns all rights to the name, although he didn't specifically say he has it trademarked. He therefore wants me to stop using the name.

I said I was not prepared to do that due to the costs of changing the car signage etc. He said that if I didn't do it in a month then he would have to take action via the courts.

I said that seemed a bit OTT seeing as how I only operated 4-5 hours a week as a bit of fun, and was not likely to be mistaken for him or offer much in the way of competition. I said I thought a court would take a dim view of any action he tried to take as it was a David & Goliath type situation. I also pointed out there were many other driving instructors trading as XYZ in the UK which seemed to surprise him.

It's been left that he will go away and think about it.

Do I have anything to worry about? I don't really care what I trade as, because I'm not trying to build a brand here, but I don't want the hassle and expense of getting a new roof sign sorted out.

Is it worth trying to get the TM on the name myself?

Thanks in advance,
Dave.

[Ozzy]

Hi Dave,
I'm sure that CRossguard will have a better knowledge of this, but it is my understanding that you can trade as anything you like so long as it does not infringe on any common law and/or trademark rights.

The other guy is unlikely to have any trademark rights to the name, but he may have common law rights. However, he will have to prove in court that by you using that name in your area he is losing business in his area. In national businesses this can be easy to prove in court, but in localised businesses such as driving instruction will be a little bit tricky I would imagine.

The difficulty though is if he plans to expand into your area, and he has been established longer, the court may rule in his favour.

Although registering the trademark may help you, it is likely to cost more than changing a roof sign.

[autolycus]

The difficulty though is if he plans to expand into your area, and he has been established longer, the court may rule in his favour.


Someone else suggested to me that this principle is area based. In other words because I have been established longer in THIS area, then it may actually be that I have have a case against the other guy if he comes into my area using the same name (on the grounds that I have been trading here longer with that name).

[bwglaw]

It appears that the other business is XYZ School of Motoring Ltd. By being a Ltd Company registered at Companies House does imply the name to be protected especially against a similar business, who is trading as a sole trader. A sole -trader can change his name overnight. It could be argued that a sole-trader having carried out reasonable investigations would have found a company of the same name, albeit Ltd.

The other company could bring a claim against you for 'passing off' especially where you do the same or very similar work and/or you are using a brand/name that could cause confusion.

If the other company decides to bring a claim against you the courts are likely to take into consideration any investigations you have carried out to check the availability of the name, the size of your business, and how reasonable it would be for you to make the changes.

It would be cheaper to pay for a new roof sign than pay a solicitor to defend a claim for passing off. It is complex and very expensive. I have brought proceedings against another company for a similiar issue. This company was dissolved as a result.


I have a part-time business/hobby teaching people to drive. It's just a bit of fun designed to add a bit of interest to life and cover the running costs of one of my cars. I do about 4-5 hours of lessons per week.

I started doing this in October 2004 and operate as a sole-trader. The trading name of the business takes the form XYZ School of Motoring.

A few days ago I got a call from a guy who says he is the owner of XYZ School of Motoring Ltd (registered before I started up, according to Companies House). He is based in a different area from me but is about to expand into my area and wants me to stop using the XYZ name.

[autolycus]

It could be argued that a sole-trader having carried out reasonable investigations would have found a company of the same name, albeit Ltd.

Thanks for the reply. I did check for other XYZ School of Motoring companies beforehand.

I found this guy (the Ltd company one) in an area about 25 miles away. To my mind, 25 miles away in this business is far enough away for it not be an issue (given that most instructors operate fairly close to home to keep costs down).

I also found about 8 other XYZ School of Motoring sole traders scattered around the country.

I think in this particular industry, you would struggle to find a totally unique name, and I would imagine that most driving instructors operate on the basis of only checking their local area for a similar name - which I did.

[bwglaw]

I found this guy (the Ltd company one) in an area about 25 miles away. To my mind, 25 miles away in this business is far enough away for it not be an issue (given that most instructors operate fairly close to home to keep costs down).

A Ltd Co is entitled to full protection of the name, regardless of where either of you are based, provided the registered name is in England and Wales

I also found about 8 other XYZ School of Motoring sole traders scattered around the country.

They are sole traders just like you and the same principles will apply to them.

I think in this particular industry, you would struggle to find a totally unique name

Understandable, but the Ltd Company's protected name has more rights particularly where the area of work is similar.

Lets take for instance. I set up a business as Fred Bloggs t/as BT - I offer telephony services. Obviously my name is going to cause confusion, whether intentional or not. Who would have more protected rights? me or the genuine BT plc. Like I said earlier, the more the issue is resisted the more complex it will become and consequently the more costly it will become.

Also, do you think the Ltd Co would waste expense on paying a lawyer to contact you? A lawyer would not necessarily act for the Ltd Co if they had no rights. The lawyer would be happy for you to resist so they can make some money by representing their client.

Believe me litigation on intellectual property is messy. Instead of 4-5 hours per week driving tuition, it will be 4-5 hours per week litigation. If they are successful then judgment is entered against you, in your personal name.

[Crossguard]

Registration of a limited company under a particular name provides no legal monopoly to the use of that name whatsoever - it merely stops somebody else registering the identical name on the same register. The situation with domain names is similar.

A passing off action under the common law (i.e. it is not based on statute) protects against somebody else trading off your reputation in a way likely to damage your business or which actually does so. Where two businesses are local in character (e.g. driving instructors) and a long way apart, there is unlikely to be a valid passing off claim. 25 miles is however a bit close for comfort and it can be argued that customers lying in the region between them may be confused. At the end of the day it depends on the facts - passing off is essentially a practical test.

The only effective protection nationally - and it is not even necessary to show confusion if the names are identical - is trade mark registration. That means a business in Cornwall can stop one in Scotland even if nobody thinks the two businesses are connected or if the business in Cornwall expands into Scotland and causes confusion if it has prior trade mark registration.

We charge £400 for filing a trade mark application in one class including the official fee for 10 years protection plus a completion fee of £60, but you should allow a contingency of £200-£500 in case of objections. That works out at £50 - £100 per annum, which is less than house insurance!

The question is, can you afford to take the risk of losing your business identity - after all, you don't ask what the risk is of your house burning down before insuring it.

[injan]

Hold on a minute here

The correct thing to do
and what i would do here is write back to the other XYZ and say
this is my business ran in my area of (your area outlined on a map)
for x amount of years.... sins 1992 etc

(you are lucky they sent you a letter saying that they WANT to move into your area)

Now you can say
If you would like to start trading in my area, as stated in your letter, using my name in this area
we would require a Payment of £xxxxx PA etc (or negotiable)

I'm sure you will understand we have spent vast amounts in marketing our name in this area and have built up a very big client base
and good name etc etc blag blag blag (dont tell them its just your hobby)

any movement into our area is infringement etc etc etc

.....
This is what i would do
force them to pay you if they want your existing area



Injan