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unregistered trade mark

The Pitfalls Of An Unregistered Trade Mark

Unregistered trade marks give you as much protection as a sieve in the rain. 

However, there is a glimmer of hope. If you’ve been using your trade mark for several years, and built up a large customer base your rights are limited. But, if another business starts using your name, you only have “passing off” to protect you. 

It all comes down to goodwill

Before you start to relax, passing off is:

  • Difficult to prove
  • Expensive
  • Time consuming

It all comes down to goodwill. To win your case you must show that you have goodwill in your business, and that another business has made a misrepresentation to consumers that resulted – or could result – in damage to your goodwill.

That’s why we always recommend you register your trade mark rather than solely relying on your rights through passing off. 
 

Passing off  

If you register your trade mark you have a registration certificate as evidence of your rights. It’s not so simple to prove the different elements of passing off.

Looking at goodwill, you must demonstrate your trading history (e.g. customer lists, invoices, geographic area of trading and previous advertisements over the years), which takes up a lot of your time and the rather expensive time of your lawyer.

We had a client who had been in business for ten years, but hadn’t registered their trade mark. Another company registered a similar name as a trade mark and began trading in the same area. As a result, our client was losing business. He tried advertising more, but it sent more business to the other company. Despite being in a  good position to meet the various demands of a passing off action, the time required and associated costs were too steep. After much soul searching our client took the difficult decision to rebrand but this time made sure to register the new trade marks.

Registered trade mark rights much stronger

In contrast, registering your trade mark means your brand is protected because it gives you a legal monopoly. Once registered, no one else can use the same or similar trade mark for the goods and services which you have registered, in the territory that you have registered it. 

Renewing it every ten years (when due) and keeping it in use means your registration lasts forever.

Passing off doesn’t give you exclusivity

The bad news if your trade mark is unregistered is that you don’t have a monopoly in your name. As mentioned earlier, you can only stop someone using the same name, if you can prove that their activity has damaged your goodwill. 

It’s also worth noting that you can’t necessarily stop another business in a different location, which in the digital age is a big problem.  

What should you do?

Achieving full protection for your brand comes down to making sure all of your trade marks are registered as early as possible. 

It will save you time and stress, as well as enhancing the value of your business should you ever wish to sell it.

Make sure you don’t leave your brand unprotected. Contact Rachael at Ward Trade Marks using the form below and get your trade mark registered.

Ward Trade Marks Limited is a Bury St Edmunds-based specialist trade mark attorney firm.

Contact Rachael or Bill Ward

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June 27, 2019 Rachael