A company already exists but not registered

[ricky117]

Hi there

I recently had an idea for a company designing and making specific t-shirts.

I registered the company domain - the .com successfully

We have not started our operations yet.

THe problem is, I recently found out that someone else had registered the same domain (but with a hyphen between the 2 words)

They actually also do the same thing that I intended to do.

Although they have not registered the company name, they have been active since 2009.

Are there any legal implications of me starting the company under the same name if I register it? Will I face any problems in the future regarding the company name and the products I sell?

What happens if they mount a legal challenge and force me to change my company name.

Is it wise to even start the company as I intended, or would anyone recommend I change my company name to avoid such hassle.

 

[MrMichael]

If the name is a distinctive, non-descriptive name, then the existing business may take umbrage at your usage.

You can either:

1) Continue as planned and risk legal action later.

2) Change the name and avoid the risks of later action.

3) Contact the existing domain name owner to see what their thoughts are on your usage of the name. Of course, it's highly likely that they will object but at least you will then have certainty which you will not have under option 1 above.

You should also check the www.ipo.gov.uk website to see whether the term is a registered trade mark.

If the term is a generic term to describe what you do (for example bespoke-tshirts.co.uk), the third parties options will be more limited in terms of restricting your usage.

 

[ricky117]

You should also check the IPO website to see whether the term is a registered trade mark.

I searched the database and they have not registered the name as a trademark.

Also - they are not registered as a company.

This means I can register the name as a trademark and register the name as a limited company myself.

Do they have a case in the future to object to my usage of the name - even though I legally registered it?

 

[MrMichael]

Registering the name as a company confers no real rights over the name and only serves as evidence of the extent of your usage.

You could attempt to register the name as a trade mark but as they, on the face of it, have prior rights they could simply apply to invalidate your registration on the basis of their prior rights.

Also because you are aware of the name, they could arguably suggest you have registered in bad faith, another ground for invalidation.

 

[Steve Sellers]

Do you operate in the same geographical area? Is it likely that a potential customer may confuse the your business and that of the one existing since 2009?

 

[Spencer1986]

i always assumed that if somebody has not registered their company/business name then it was up for grabs from who ever did buy it and register it. This thread suggests that this is not the case, how come?

 

[MrMichael]

Do you think that if you had been trading under a particular name for 10 years, it would be reasonable for someone else to come along, register that name and prevent you from using the name?

 

[Spencer1986]

Do you think that if you had been trading under a particular name for 10 years, it would be reasonable for someone else to come along, register that name and prevent you from using the name?

No, but i was under the impression that all companies/business should have a registered name simply so it is secure and not open to other companies/business to use.

Im not saying it should be one way or the other, im new to business and thats just the impression i got. Im very interested in this thats all.

 

[MrMichael]

Well, as I say earlier in the thread, simply having a company name registered doesn't really give you any additional rights over and above the existing rights you would have if you had just been trading using the name.

If you do register the name, but someone has prior rights in the name from trading, they could take action to prevent you from using the name. This is on the basis of common law passing off. With this action, there are a number of hurdles you have to overcome to be successful. Indeed as alluded to above, if you are in completely different geographical regions within the UK and you are both small businesses, it may be very difficult to satisfy the conditions.

As an alternative to common law rights, the best protection for your business name is a registered trade mark. However, again, if someone has prior rights/goodwill in the name, they could attempt to invalidate your trade mark on the basis of their prior rights.

Hope that's a bit clearer. Let me know if not.

 

[Spencer1986]

Well, as I say earlier in the thread, simply having a company name registered doesn't really give you any additional rights over and above the existing rights you would have if you had just been trading using the name.

If you do register the name, but someone has prior rights in the name from trading, they could take action to prevent you from using the name. This is on the basis of common law passing off. With this action, there are a number of hurdles you have to overcome to be successful. Indeed as alluded to above, if you are in completely different geographical regions within the UK and you are both small businesses, it may be very difficult to satisfy the conditions.

As an alternative to common law rights, the best protection for your business name is a registered trade mark. However, again, if someone has prior rights/goodwill in the name, they could attempt to invalidate your trade mark on the basis of their prior rights.

Hope that's a bit clearer. Let me know if not.

Ahh right, thanks!

So if you have the domain names of your company/business covered and your are trading under that name, even if you have not registered the name officially you are likely to be safe-ish from anybody trying to take the name. Is that fair to say?

 

[MrMichael]

The registration of the name as a company will not be conclusive. It's all about the reputation and goodwill you've developed with a particular name, in terms of the geographical area in which its recognised.

It also depends on the distinctiveness of the name in the first place.

If you want to be as protected as possible, and you have a distinctive name capable of registration, then trade mark registration is best, but having the registered company name is neither here nor there.

 

[VeryMark]

Trade mark registration protects all forms of commercial usage of a name, whether as a company name, business name, product name, shop name, domain name, website name, in fact any form of commercial activity under a name which is likely to lead to confusion.

However, there is also a more limited right to sue for passing off established by having goodwill in a name or identity you have traded under previously, providing you can show a likelihood of confusion and damage. As against a later trade mark registration, this also gives you a right to continue unhindered (but not to expand), and also a right to seek to invalidate and remove such a registration if you can show a likelihood of passing off.

If somebody else is already using the same or very similar name as you for the same kind of business in the same territory, then, even without trade mark registration, it's probably wise to steer clear unless it's ordinary English language usage which is a generic description in the public domain.

....... but what's a generic description in the public domain needs to be checked properly - there are plenty of names you might think are generic which in fact aren't - see our factsheet here.