We often refer on this blog to the need to register a trade mark because of how difficult it is to stop a competitor using your name without one.
An action called ‘passing off’ is usually the only hope for a business which does not have a registered trade mark and wants to stop a competitor copying its name or logo to take unfair advantage of its reputation.
Passing off requires three things:
- Established goodwill in the name or logo, i.e. the name has a reputation as a result of the claimant’s trading efforts.
- The competitor’s use of the name will confuse an ordinary person enough to make them think the competitor’s product or service is connected with the claimant’s.
- The competitor’s use of the name has caused damage to the claimant – either in lost sales or reputational damage from an inferior product.
It is the second factor which tends to cause the greatest difficulty. It requires evidence from an ordinary purchaser of the claimant’s product or service which shows that they thought they were buying something from can imagine is difficult, expensive and highly unappealing to any business.
Contrast this with the ease of stopping infringement of a registered trade mark where there is no need to show damage so it doesn’t matter whether the competitor has started trading yet and no need to show confusion if the competitor is selling similar goods. Also, it doesn’t matter if the claimant hasn’t developed any sort of goodwill in the trade mark yet. Finally the costs of registering a trade mark are trivial compared to going to court, not to mention the ongoing reputational damage that can be caused by copying which could have been prevented with a registered trade mark.