When a new business is started, or when an established company launches a new product or service, it is all too common to overlook the need for comprehensive clearance checks to be carried out on the proposed trademarks. This is even more common in the case of a new business for which the business name and brand are being established but which is some way away from the stage of thinking in terms of trademarks. Checking may be limited to establishing if the domain name is available and doing a Google search. This is asking for trouble. Whilst you should certainly do those things too, they do not substitute for a search of the Trademark Register and further exhaustive searches  to check not only are there any identical or even similar trademarks already out there, but also is anybody already using the mark?

The consequences of not doing so can be severe. Use of a trade mark may end up infringing a third parties right which could mean litigation, re-branding or even withdrawal from the market. Many large (and all very large) companies actively monitor for any perceived breach of their trademark rights. Should your business be identified as a transgressor, the first you are likely to know of it is by receiving a ‘cease and desist’ letter from their solicitors. This will set out the details of the alleged infringement and will demand that you take certain actions almost immediately such as

  •   taking down your website or removing all references to the infringing mark
  •   providing documentary evidence of cancellation of all relative SEO arrangements
  •   removing all infringing products from sale and destroying them
  •   removing and delivering up all stationery or other materials bearing the infringing mark
  •   providing detailed accounts showing the sales of the infringing product
  •   providing a sworn statement of compliance and an undertaking not to re-offend
  •   agreeing to pay all the legal and other costs of the accuser
  •   (Possibly) payment of compensation

There will also probably be the threat of court action for an Interim Interdict to prevent your use of the trademark in any way if you refuse to comply with the demands. 

This can be an expensive exercise as it could mean the re-packaging of goods, changing stationery and redesigning letterheads, websites etc. In fact any goodwill that you may have accumulated in the name through use etc would have to be forfeited, which could be very damaging. A business’ identity will be embodied in its brand and is likely to be its most important asset. It embodies all of the business’ accumulated goodwill.

The risks for small companies are arguably greater. An accusation of infringement by a larger entity may be unfairly made, tenuous at best – but will the small company have the resources to defend an action against the much larger accuser and their lawyers? All the more important to carry out the necessary checks and to take a cautious approach if there is even the slightest possibility of confusion between your chosen mark and that of another party.

To help avoid the above scenario, a tactic often recommended for businesses at the stage of choosing their trademark is to select creative trademarks, probably with no relation to the products or services that are being protected. The rationale for that is that if the mark has no obvious connection to the product or service then the chances of someone else already using it are slim. The more creative and ‘nonsense’ the better the chance of getting a good domain name as well as a few variations on the domain. Also, the more abstract a trademark is (as opposed to it being more descriptive of the goods), the stronger the trademark will be.

Nothing in this awareness article is intended as legal advice. If you have a specific legal requirement or query you should consult a solicitor directly.