Good Business Design

Thorough trademark research is essential before using a name or trademarking it. Good business design requires it.

Trademarks are property like land. Just as you would first do legal searches and carry out surveys before buying physical property, so you should do thorough due diligence on a name before finalising your choice.

One aspect of deciding whether a name is worth proceeding with is to check whether it’s available to use. A related, and equally important issue is whether a name can function as a trademark. Also, is the name cost effective to register in other jurisdictions? Will it be enforceable against copyists?

Considering the brand protection dimension of search results before building a business around a given name and registering it as a trademark is good business design. 

The case of Mr Gu who set up a Chinese takeaway in Barrow-in-Furness in 2009 using the name China Tang serves as a warning for what not to do.

Whether you just use a name or apply to register it as a trademark, first get a legal opinion.

Mr Gu had been using this name for his takeaway for 12 years before he received a cease-and-desist letter from lawyers acting for the high-end China Tang at the Dorchester Hotel in Mayfair. Their rights to use the name stemmed from a trademark covering the restaurant and takeaway category which was registered years before Mr Gu adopted the name China Tang.

During lock down the takeaway side of most food businesses became prominent. That's when China Tang at the Dorchester noticed Mr Gu’s use of the same name. They asked him nicely to change his name, even offering him financial help. But he declined because he refused to believe he couldn't use the name given he’d used it for 12 years, and registered it as his company and domain name.

Even if Mr Gu had registered a trademark it wouldn’t have helped, because trademarks are subject to other people's rights. You must always first establish that a name is available to use before registering it as a trademark. Otherwise, your trademark is vulnerable to cancellation.

Due diligence is about doing internet searches as well as checking the trademark registers for similar or identical names. Only if that gives you the all clear, is it appropriate to trademark the name. The US system is different to the UK and EU approach, because the trademark examiner refuses applications where there is a prior registration.

It's particularly important to ensure your trademark registration is solid and can't be cancelled before extending protection to other countries as I explain in this video What is a Madrid System trademark?  The foundation of an international application is the base application in your home country.

That’s why I’d recommend having a professionally searched and drafted trademark application, before extending your protection internationally. Use that as the basis of your international application, rather than a trademark you’ve drafted yourself. 

I won’t be sending another newsletter this week as it’s Easter this Friday. I’d envisaged releasing a few podcast episodes when I’m back in your inbox on 5 April. However, instead I’ve decided to release the episodes on Friday 3 May to mark the 5th anniversary of the podcast.

I hope you have an enjoyable Easter break.