27 July 2009
in the absence of a registered trade mark, a trading name can be protected by a passing off action.

In the past, if a competitor used a trading name for their business, which was similar to an already established business, there were two main ways of putting an end to this unfair competition. First, by relying on a registered trade mark, secondly on the law of passing off. If there’s no registered trade mark, a trade mark infringement case is not possible.

But in the absence of a registered trade mark, a trading name can be protected by a passing off action. This requires company’s to show that they have generated goodwill through a trading name’s use and any duplication is likely to lead to loss of business. Passing off actions can be expensive because of the need to prove goodwill and confusion in the minds of the public.

There are also cheaper, quicker and often more effective remedies available. When a domain names is bought, the purchaser agrees to be bound by a set of terms and conditions, including a domain name dispute resolution procedure. The procedures provide a mechanism whereby if an existing business can show it has pre-existing trade mark rights - whether a registered trade mark or passing off rights - it may be able to have a domain names similar to its trade mark transferred to it.

These procedures are run by ICANN, for .com domain names and Nominet, for .co.uk domain names. They are relatively quick, cheap, done on-line and certainly far cheaper than a passing off action. It will be necessary for companies to show bad faith by any rivals. But bad faith can be shown in many ways and is particularly straightforward if it can show that the name was chosen to divert trade to a rival business. Of the applications made to ICANN and Nominet for transfer of domain names, about nine out of 10 cases are successful.