Business name ownership

[Jules291]

I bought a leasehold property/sandwich shop business in January 2014. I kept the original name and traded for 16 months, unfortunately the business was losing money and I tried to sell but with no luck. I closed the door and walked away with lots of debts which I am now paying off via employment elsewhere. The business has now been leased again and being run as a sandwich shop with the same name, I feel that as I originally bought the business and the name this now belongs to me and the new owners really should change the name or buy the name from me? Am I correct?

 

[Alan]

I closed the door and walked away

So you didn't try and sell the business and goodwill?

 

[Jules291]

Yes I did try and sell, I did put that in the original post

 

[Alan]

I tried to sell but with no luck.

Thanks,I missed that, but my sentiment is you walked away, so what claim do you have?

 

[Jules291]

Well, that is my question? Yes I did walk away so have I just got to forget it and move forward?

 

[Alan]

I guess my opinion, and that is all it is , is you walked away, so you have no claim. If for instance you had a limited company in that name, and you kept it solvent in some way, then you would have a claim, if you had a trademark registered, if you were still trading as a sole trader etc. But you walked away, so can't see what claim you would have. Do you own a domain name in the business name?

Of course, you could always try, write a letter and state you own the brand, you may get some response.

I'm not a lawyer or expert on this, I'm sure others will give an opinion shortly.

 

[Jules291]

Thank you for your honesty and taking the time to comment, I'm not really sure where I stand (if anywhere)

 

[Maxwell83]

So you were trading as ABC Sandwiches, closed the business down but now a new person has reopened the premises and is using the name ABC Sandwiches?

I think without any other protection such as trademark, your only claim would have been passing off, but you have no business which you could claim is likely to be 'damaged' by the act, so I don't think there is anything you can do.

Although, thinking this through, the new owners couldn't know that you weren't planning to ever reopen a shop nearby with that name. In theory, if you own the goodwill then you still could. What would happen then? If you allow them to keep trading under your old name, then that effectively prevents you from using that name again in future perhaps... Maybe a discussion should be had with them.

 

[14Steve14]

To come at this from a totally different angle. If your business closed with lots of debts, and you being a sole trader, what stops your debtors believing that you are running the business again, and could possibly pay more back.

I bet the new owners are getting problems from suppliers and who ever you owe money to, so may be they will eventually change the name. I know I would once I found out what had previously happened.

 

[Jules291]

Good point, but I did ring or write to all I owed money to and arranged payment with them. But you have made a valid point the new owners may well be getting phone calls and letters

 

[RayLevy]

Hi Jules

Maxwell was right in pointing out that you could, in theory, have a claim in passing off, if you were to continue trading - or intend to continue trading - with the same brand name. However, if you are not using that name any more, then there is no loss for you to claim.

The laws of passing off require that:
i) you have a name or reputation in the market;
ii) someone is using your name without your permission, which leads to confusion; and
iii) that misrepresentation has caused you loss of business (or some other loss).

Here, we would need to know that you had a large enough reputation to start with, and that the name was not generic, so it would be clearly identified with you (and not other sandwich shops who might be called the same or similar) and that you are now caused a loss - for example, by being prevented from opening up another store with the same name.

If you could substantiate the above, then there may be a claim here.

Hope that helps.

Ray