Trade Marks and passing off

A new outfit has turned up in our locality. They're in the same line of business as us and have started trading; they've already stolen one piece of work from us as a result of using a logo the same as ours in a recent promotion! It's taken us years to build up our reputation! Can they do this? What can we do to stop them?

There are steps that you may be able to take to prevent this 'outfit' from trading further at your peril.

First of all, let's see if Trade Mark law can help. You don't say whether your business has registered any trademarks to protect its rights. You may already have registered your trading name together with the logo that you use on your products/literature/advertising etc. as Trade Marks, giving your business the exclusive right to use them.

If so, the outfit must, in the eyes of the law, be using your mark 'as a sign in the course of trade'. So they must be using it on their packaging, material/ pamphlets, shop fronts etc, in fact much in the same way as you are doing, in order to attract or advertise their business. From what you say, this is the case. If so, and if they are selling the same products and services as you, their use of your logo is infringing your rights and you could start proceedings for trade mark infringement, which may result in an order that they stop using your logo and pay you damages.

We have registered our logo and name as Trade Marks! But I might have got a bit het up. In fact, theirs isn't exactly the same as our sign. It's sort of similar. And to be frank, at the moment I'm not entirely sure what it is they're doing or selling, though their name, and the business they've stolen from us, suggest to me that it's at least similar.

All is not lost! If their logo is only similar to yours (as opposed to being identical) but they're in the same or similar line of business, then you still have rights. But there is an added requirement. You'll have to show that there is confusion on the part of the public, who associate the outfit with your business's trade mark. From what you say, this may have already happened, although events to date may not be sufficient evidence for a claim against them.

One of my bright-eyed assistants has had the idea of going off and buying stuff from them under cover - to gather evidence. I think he's been watching too much of The Bill myself - presumably we can't do this.

Well yes you can. 'Trap orders' are orders or purchases of the offending outfit's goods. They are commonly used in order to gather evidence in cases such as yours. The 'orders' from the outfit should be carefully planned however for maximum effect (and maximum use as evidence) and further guidance should be sought before the 'shopping' is done!

Great! What are we waiting for! I'll go shopping - you write to them, telling them we're suing!

Hang on! Heard of 'threats actions'? It's not quite so straightforward. We need to be careful and consider the situation in more detail. If you threaten a claim for infringement of a trademark against someone, it's sometimes possible for them to actually start a claim against you in turn alleging that your threats are unjustified. That may put you to cost and bad publicity. We need to be a lot more certain of our facts before we start writing letters like that, although this won't prevent us from firing certain preliminary 'warning shots across the bows'.

OK. Let's do the homework first then. But what recompense can we get out of them eventually? And will we have to go to court - we're very busy at the moment with new clients on the Continent.

On the basis that infringement is proven, broadly speaking the court is likely to either award damages or order an account of profits. The first is simple - what loss have you suffered as a result of the outfit's wrongful use of your logo? You'd have to look carefully at the lost business and its value. The second entails the outfit having to state what profit they have made as a result of using your logo. They would then have to 'pay you back' that profit. If we get to the stage where you want an injunction preventing them from trading with your logo then yes, we will have to go to court. However once some warning shots are fired, and if and when we have the evidence to proceed, they may want to talk. There is often room for negotiation and discussion in these cases that results perhaps in the outfit folding or moving elsewhere, or in the two businesses trading in healthy competition. It may be worth carrying out a few investigations into the outfit yourself - beyond the trap orders- to see whether they've anything of value to you - some extra know how for example, or some valuable staff. Buying them off may prove commercially worthwhile.

Good thing we registered those trade marks then. I imagine that without them we'd be in deeper trouble. We've just started using a new one too - best get that registered as well otherwise the outfit will be free to use it I guess. Don't know how to go about registering though - the last person to deal with this has left.

It's always wise to protect your rights to the extent possible. But without trademark registration you'd still have had some rights. You'll have heard of 'passing off'. This is where business A tries to take advantage of the goodwill of business B by, in effect, hoodwinking the public into thinking that A is in fact B, somewhat akin to what the outfit has done with your first logo.

As for registration - we can advise further on this if you wish.

If you have any queries, do not hesitate to contact Frank Jennings on frank.jennings@dmhstallard.com , please provide your full contact details including address and telephone number.

This document is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from taking any action as a result of the contents of this document.