Business Law: Victoria Spellman on why care is required when naming your company
- Credit: Archant
A leading state secondary school was unhappy when a private adult education college opened just 500 metres away with a similar name.
Heavily over-subscribed Cranford Community College (CCC) objected to the presence of Cranford College (CC) nearby. It accused CC, which draws its students primarily from abroad, of feeding off its goodwill, confusing the public and giving itself a name which served as an instrument of deception.
The school expressed concerns that any perceived connection to CC could damage its reputation and lead to a negative spiral of fewer students and lower funding. It demanded that CC change its name, as well as its internet domain names, and argued that its trade marks were invalid. So, it issued proceedings for “passing off” against the new school.
The traditional form of passing off is an abuse of someone else’s goodwill; for example, a trader misrepresenting that he is connected to another business, so confusing the public into buying from that trader and causing a loss to the other business. Although the law of passing off is primarily concerned with goodwill in the business of a trader, it may be relied on to protect goodwill enjoyed by non-traders such as a charity.
It is, however, tricky to protect a name which is descriptive such as that of CCC – it is a community college in Cranford. That said, it has long been established that a trade name which is descriptive may be protected if its reputation is so good that everyone associates the name with the trader.
The court acknowledged that CCC had achieved academy status and was recognised as a particularly fine school with its places much sought after. It was conceivable that prospective pupils and their parents might mistakenly believe there to be a connection between the two institutions. The school had also produced a number of examples of emails and post being misdirected.
However, the school’s passing off claim was dismissed. The court found it entirely unlikely that local parents and pupils would be confused in a way that would cause it any damage. There had been no misrepresentation on the part of CC, let alone an attempt to deceive the public. There were thus no grounds for revoking CC’s trade marks or requiring it to assign any of its rights.
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It’s important to get it right when setting up a business.
: : Victoria Spellman is a partner at Gotelee Solicitors in Ipswich.