Ltd Company name: changing and 'passing off'

[JonRB]

Hi chaps

Someone asked me a question recently that I couldn't give a confident answer on. If a company were to change its name then would its former name still be protected against 'passing off'?

i.e. If "XYZ Widgets Ltd." were to rename themselves as "SuperMegaCorp Ltd." and then another company came along and started trading as "XYZ Widgets" then would the company formerly known as "XYZ Widgets Ltd." and now called "SuperMegaCorp Ltd." still be able to sue for 'passing off'?

My feeling is 'yes', but I'm not sure enough to give a firm answer to the person who asked me.

[Eric Mc]

My feeling is "No", unless the renamed company could claim that its old name was still valuable to it regarding its business success and reputation.

If I was a judge, I would ask, "If the name was so precious to you, why did you change it?"

[JonRB]

Apologies; I think my question probably needed to be slightly more specific.

Let's say "XYZ Widgets Ltd." had the website www.xyzwidgets.com and when they renamed themselves as "SuperMegaCorp Ltd." they kept www.xyzwidgets.com running and trading with a statement on the 'About Us' page saying "XYZ Widgets is a trading name for SuperMegaCorp Ltd. (formerly known as XYZ Widgets Ltd.) registered in England number 123456789"

Would they then still have a case against "Passing Off" if another company came along and started trading as "XYZ Widgets"?

Edited by JonRB on Friday 16th February 21:23

[Eric Mc]

Trade names are not protected in any formal way - unless you go down the route of registering it as a trade mark. If someone else started using an identical name one you were, or had been using, you could apply for a court injunction to have them stopped - but you would have to convince a judge that your claim was justified.

[tigger1]

Eric Mc said:

Trade names are not protected in any formal way - unless you go down the route of registering it as a trade mark. If someone else started using an identical name one you were, or had been using, you could apply for a court injunction to have them stopped - but you would have to convince a judge that your claim was justified.

Is that right?

What about the fact that a company was registered in that name? Would that not suffice?

Isn't passing off exactly "using the goodwill/ name of another company to benefit your own company"?

[Eric Mc]

If the original company goes to the trouble of changings its name at Companies House to a new official limuted company name, then its original limited company name no longer exists and Companies House will no longer have the right to prevent some new company setting up and using that, now defunct, old company name.

If the original company (which, of course, is now legally called something else) wants to protect the name that it was originally using, its right to protect that name is now much more restricted and will rely on registering a trade mark or applying for a court injunction asnd fighting it out in court, if necessary.

In the UK there is no formal method of regsitering "trading names" as such.

[billsnemesis]

Eric Mc said:

If the original company goes to the trouble of changings its name at Companies House to a new official limuted company name, then its original limited company name no longer exists and Companies House will no longer have the right to prevent some new company setting up and using that, now defunct, old company name.

If the original company (which, of course, is now legally called something else) wants to protect the name that it was originally using, its right to protect that name is now much more restricted and will rely on registering a trade mark or applying for a court injunction asnd fighting it out in court, if necessary.

In the UK there is no formal method of regsitering "trading names" as such.

The original decisions on "passing off" were not restricted to company names and they can apply to a trade name. There is additional protection if you register a trade mark but passing off gives a right to a common law claim even if the name is not registered. For unregistered names the issue is more about evidence than registration.

In the case you quote where a company has used the name as its company name and then changes the company name but continues to use the previous name as a trade name I have no doubt that they could claim passing off if someone else came along and tried to use the old name.

If they changed names and abandoned the old name it would be trickier but not impossible. Again, the issue would be evidential rather than a matter of principle.

If you think of the way products change names (eg Marathon to Snickers) and then consider what would happen if a company came along and tried to market a similar product with the old name they would be trading on the goodwill associated with the old badge. I know that both these names are protected by trademark registration but that is in addition to the common law claims.

Companies House would not address the issue because their job is only to check if the name is in use by a registered company.

[Eric Mc]

That's more or less what I was trying to say.

However, the onus is on the defendant to fight their corner on their prior "ownership" of the name/brand.

Larger companies and organisations are in a better position to defend their brands because, by and large, these names and brands are well known to the public or to the trade in which they operate.

Smaller businesses have a tougher job as their geographical business footprint may be a lot smaller. For example, there could be two dozen "Jones' Bakeries" operating throughout the UK but it is highly unlikely that any one "Jones Bakery" could claim exclusive rights over that particular name. On the other hand, someone setting themselves up as "Allison's Bakery" might have a problem as it is already a national brand.

Thye advent of the Internet is causing changes in these areas in that even small businesses may now have national and even international reach - so protecting their trading name may become much more important to them.

Edited by Eric Mc on Saturday 17th February 11:30