This article is written by Janhavi Dudam who is pursuing a Diploma in Intellectual Property, Media & Entertainment Laws from LawSikho.
Customers sometimes struggle to understand that a company name and a brand name are two different entities and have different meanings. As a prospective or existing business owner in order to get your legal matters correct, you have to know the major distinctions between the two. Let’s take a more detailed look, shall we?
What is a Brand name?
A company’s products or services, which can be used for advertisement and sales purposes. It requires no legal suffixes. Let’s take the example of Armani, Emporio, Exchange, the most expensive brand of apparel. Under this brand, they even produce perfumes, leather bags and belts, glasses, footwear, and other materials. Another example is the Dell company that offers technology solutions, sells products under its brand such as laptops, desktops. While reading this, one question may come to your mind as to how is it different from the company name? Let’s dive into the discussion.
What is a Company name?
The name given to a company incorporated under the Companies Act is referred to as the trade name or name of the company. To simply put, it is the official name through which a person or a group of people want to carry out any business operation for profit-making. It needs to be suffixed with a private limited company, LLC, Corp, or other legal endings depending on the type of business arrangement it is actually working in. For example, Dell Inc., Giorgio Armani, and Emporio Armani.
Difference between a Brand name and Company name
That’s really simple. One company is differentiated from other companies by a company name. A brand name describes one company’s products from another company’s products. Mostly in the case of popular brands such as Sony, Nike, or Shell, a brand name and the company name can overlap when the company discovers that one name is appropriate for the identity of all its products.
Checklist – When naming your Company
The process of naming is not so easy as thinking about a name and attaching it to your company. Before applying for registration, you need to perform a company name check to make sure that your name is legally available. A Company is like an artificial person in which name statutory requirements such as income tax returns, annual filings, and other legal proceedings are filed. Therefore, you will have to register it under the Registrar of Companies under the provisions of the Companies Act, 2013.
Rule 8 of the Companies (Incorporation) Rules, 2014 as amended by the Companies (Incorporation) Fifth Amendment Rules, 2019 framed by the Central Government under the Companies Act, 2013 lays down the naming rules for companies. It must be both distinctive and acceptable, as per the Act, for a name to be authorized for the incorporation of a new company.
Let’s look at all those factors and other things in-depth to keep in mind when choosing a name for your new company.
The proposed name should not be similar to another existing name
A proposed company name should not be the same as the name of an established company. The following tests are used to determine if a name is similar to that of an existing company. Let’s discuss a few of them-
Tests to determine the similar name
A plural form of any of the words that appear in an existing company’s name does not form a unique name.
Existing Company name- “Cena Private Limited Company”
Proposed name- “Cenas Private Limited Company”
Changes to type, letter case, spacing, or punctuation marks do not form a unique name.
Existing Company name- “Cena Private Limited Company”
Proposed name- “CENAS Private Limited Company” (letter case) or
“CenaPvt. Ltd Company” (Spacing) or
“Cena-Private Limited Company” (Punctuation marks)
Use of the definite or indefinite article in
one or both names.
Existing Company name- “Cena Private Limited Company”
Proposed name- “A Cena Private Limited Company” (indefinite)
“The Cena Private Limited Company” (definite article)
If purposely misspelled words are used as a company name, it shall be verified with properly checked words.
Existing Company name- “Cena Private Limited Company”
Proposed name – “Cenaa Private Limited Company” (Purposely misspelled)
The use of Different phonetic spellings or spelling variations does not form a unique name.
Existing Company name- “G. P. Industries Limited”
Proposed name – “G and P Industries Limited”
Or “Gee Pee Industries Limited” or “G n P Industries Limited” (Phonetic spellings or spelling variations)
Addition of internet related designation such as .com, .net, .edu, .gov, .org, .in does not make a name unique.
Existing Company name – “G. P. Fashion Limited”
Proposed name – “G.P.Fashion.com Limited” or “G.P. Fashion Dot Com Limited”
To make a company’s online presence felt, a matching domain name is always useful. So, make sure that no other company shares a domain name close to the name of your company.
The proposed name should not be undesirable
A name is considered undesirable if it breaches one of the following requirements-
- Violates Emblems and Name Act – The proposed name should not contravene section 3 of the Emblems and Names (Prevention and Improper Use) Act 1950.
- Trademark violation: The name suggested should not violate the name of the trademark or of the trademark which is the subject of an application for registration unless the consent of the owner or applicant for registration has been obtained.
- Includes derogatory words: There should be no words or words in the proposed name that is offensive to any segment of the society.
Checklist – When naming your Brand
Logos, which are visual representatives of brands, are typically associated with brand names. They help consumers recognize and separate the parent companies’ products from others. To make your brand unforgettable, you will need to have a well-designed logo.
By acquiring a trademark or service mark from an approved entity, which is generally a government registry, a brand name is secured from unauthorized use by others. In order to have it trademarked, you need to ensure that the brand name is not already registered.
The very first step in avoiding trademark conflicts is a systematic and thorough public search for trademarks (or brands, trade names, etc) to ensure that any trademark-related disputes can be effectively avoided in the future. A mere google search will also be an extremely useful tool to do a public search.
Guide to conduct Online trademark search
An Online trademark search can be conducted on the Indian Trademark Registry database of the government https://ipindiaservices.gov.in/tmrpublicsearch/frmmain.aspx
- At the top of the list, click Wordmark as the search type.
- Enter the wordmark for which you would like to access the trademark database.
- You may compare the trademark database against the search query under three conditions: “Start with,” “contains,” and “match with.”
- ‘Start with’ – This search shows the prefix part of the mark from the online records.
- ‘Contains’ – This search displays all records that, irrespective of their position, may have in them the mark for which the search is being carried out.
- ‘Match’- This search only shows similar matches.
- Enter the class which applies to trademark. Trademark are classified into 45 classes, 1 to 34 deals with different goods and 35 to 45 deals with the different services as per 11th edition Nice Classification.
- Click search to begin the trademark search
- Then, the website will generate a search report of all possible conflicting marks
After doing deep research, you may have arrived at your desired name of the brand. To protect it from unlawful use and claim it as yours, you will have to register it as a trademark. You can file a registration application to the Controller General of Patents and Designs and Trademarks registry under the Trademarks Act of 1999. Once you obtain a trademark for your brand name, you can sue anyone who tries to use the same name in an unlawful manner.
It is always helpful to take legal advice from a trademark lawyer or IP practice firm who can direct you through the process, as there are several legal implications involved. In many cases, the brand name may become more famous than the company it is owned by. Both company and brand naming are extremely necessary and competent for this purpose.
Congratulations! You have just succeeded to establish an exciting and fast-growing fashion brand. But to grow the business and avoid legal disputes across all disciplines, including intellectual property we need to look at all possible legal requirements involved in IPR to protect the brand.
Legal requirements involved in IPR
Appoint outside IP firm
The key starting point is to find an outside firm that has specialized intellectual property practice. This firm should consider the IP competitive market that the company is seeking to maintain and have precise knowledge of the IP needs and concerns of the company. Look for the firms based on the industry or sector that is associated with your business. The more experienced the firm is with your specific matter, that’s better.
Copyright and the Internet
The first step when using works copyrighted by others is to create a list of copyrighted works required by the company. Meet with the marketing team of the company to decide what copyrighted works you need in your day-to-day business so that they can receive the appropriate permits. Then, create a standard plan for receiving permission (i.e. clearance) and obtaining authorship properly. Start educating the internal staff on when and why copyright notices are required.
Brand owners should be cautious of over-reliance on ‘fair use’ because the exception is narrow, just because a photo, article, or other pieces of content is available on the Internet does not mean that it is free to be used by anyone.
Brand owners will need to take action to protect their own copyrighted content from misuse. To avoid misuse, they should enter into licensing agreements for the company’s own copyrighted works and educate the team of the company about why they should pursue copyright protection for works they make.
If the company hires third parties to create copyrighted works for them, ensure that they are hired on a “work-for-hire” basis and have in place assignment agreements prepared or reviewed by the lawyer.
Protecting the Company’s brand
It doesn’t happen overnight to create a brand name and symbol that will be recognizable immediately. Trademarks acquire strength and value, through use which takes time and resources. Trademarks can be protected at the state level in any jurisdiction and internationally by a single application through the Madrid protocol. Brand owners need to pay attention to territorial limits and ensure that they use their trademark to get as much protection as possible in all areas where the company is doing business.
To prepare an application to register a trademark, Brand owners should appoint trademark counsel with expertise in its industry so, that they can provide strategic guidance on which marks to file for and how to prioritize them, including which classes of services or goods to file for. In addition to this, they can also offer practical guidance on creating an effective trademark plan to track the use of the company’s trademarks or similar marks by others.
Finally, Brand owners must register a domain name as soon as they are recognized, even before applying for a trademark, to ensure that they are available online.
Protecting fashion with design patents
In the fashion industry, looks and appearance matter. Design patents are all about protecting unique ornamental appearances, so before introducing new lines, it makes sense for the fashion industry to consider this type of IP. Please take note that US design patents have specific requirements that might vary from other countries’ design laws. Let’s discuss some key insights about US design patent laws.
Products that have a shorter shelf life (around 3-6 years) will have benefit from the earlier grant of design patent. A design patent can be obtained within an average of 21 months, unlike utility patent applications that can take many years and undergo several rejections. At present, US design patent applications enjoy an estimated 85% success rate. If in a design application, an Office Action is issued, the objections typically concern indefinite drawings which can be corrected with replacement drawings.
The length of a design patent shall be 15 years from the date of grant, which should be sufficiently long to cover a wide range of trendy consumer goods. Design patents cover goods such as handbags, shoes and footwear, jewelry, hair accessories, home decorations / decorative accessories.
A trade secret is any information which may include a formula, a recipe, a program, customer lists, among many other things that derive economic value from its confidentiality, i.e. the fact that others do not know the information, makes it more valuable and one has made reasonable efforts to keep it secret.
It is quite different from obtaining a patent or a trademark to acquire trade secret protection. Most of the companies do not apply or register for trade secret protection. By taking affirmative measures to keep the information completely confidential, they obtain trade secret protection. Employee training and education are essential for acquiring and keeping the protection of a trade secret.
In a company, trade secret information should not be accessible to all but should be limited to the ‘need to know’ basis. Any disclosure of information that is considered to be a trade secret to a third party destroys the confidentiality of trade secrets. For a safer side, signing of non-disclosure agreements with employee or third party and a confidential clause in agreements can be included to avoid disclosure of the information but that does not guarantee trade secret security alone. Therefore, a company should work carefully internally and externally, as necessary, to build and maintain fair and appropriate protections for its confidential information.
Recent landmark cases that have influenced the US fashion industry
Star Athletic, LLC v Varsity Brands, Inc. 137 S. Ct. 1002 (2017)
In 2017, It was a landmark case that went before the Supreme Court. The case focused on the protection of cheerleading uniforms. In particular, it examined whether certain creative elements, such as the stripes of a chevron, could be protected under US copyright law in the design of a cheerleader’s uniform. In other words, without taking away the purpose of the design, that is to be a cheerleading uniform, could these elements be specifically or conceptually separated?
The Supreme Court explained the separability standard in its opinion, stating that in general terms, some creative elements of fabric, whether two-dimensional or three-dimensional, may be protected by copyright law. However, it failed to discuss the protectability of the particular uniforms in question or the level of creativity inherent in it.
To decide if the cheerleading elements were sufficiently original to obtain protection, the case has to go back to the lower court. Although the practical effect of the decision on the US fashion industry is not yet clear, it does give designers some hope of being able to use copyright law to protect at least some creative aspects of their fabrics.
Today, social media platforms are used by so many people and so many brands to post content over which they do not actually own the rights. This is giving rise to a large number of cases of copyright infringement. Besides, when someone hijacks a trademark and registers it as a domain name in bad faith, it is obvious that cybersquatting and trademark squatting are not going away anytime soon.
One recently resulted in New Balance winning $1.5 m in damages against Fujian-based New Barlun, an athletic clothing and shoe manufacturer known for using a slanted N logo on their products, after a series of New Balance battles against a few native Chinese companies.
Two decades ago, Chinese companies started selling sneakers that were very similar to New Balance trainers, which were already famous. With the letter “N” on the sides, their silhouettes resembled famous “dad” shoes. Moreover, in addition to the product’s resemblance, the names of the companies sounded the same. The names were also similar when written down using Chinese characters: “New Boom”, “New Barlun”, “New Bunren”.
On April 16, 2020, Shanghai Pudong New District People’s Court for New Balance Trading (China) Co., Ltd. (a Chinese Subsidiary of the U.S. Massachusetts-based New Balance Athletics, Inc.) against Niu Ba Lun (China) Co., Ltd. (referred to as New Barlun), awarding approximately 1.3 million USD to New Balance for unfair competition.
New Balance argued that the continued use of the New Barlun’s logo was unfair competition, which resulted in the loss of prestige and goodwill of New Balance.
New Barlun argued that under a trademark, their logo is protected, and therefore they were free to use it. (Interestingly, the existing status in the Chinese registry of the New Balance trademark is marked as ‘announcement of an invalid pending’).
The Shanghai Court held that the relevant public has clearly identified the products decorated with ‘N’ letters on both sides of the New Balance sneakers through a long-term widely used and therefore the logo has become a source of identification.
Moreover, the Court decided that the concerned parties should follow the principle of good faith in dealing with disputes based on trademarks, decorations, and other signs, not only to protect prior rights and interests but also to avoid market confusion. The infringing logo is identical to the logo of New Balance, which causes confusion. Although New Barlun holds rights in a trademark, it still violates the principle of good faith due to its violation of previous rights and interests.
While it seems clear that both companies are competitors in the same industry, it must be emphasized that the similarity of a logo put in the same position on similar products creates confusion in the market. This causes the source of the products to be misidentified, which violates the principles of good faith and accepted market ethics, and thus constitutes unfair competition.
As a result, the Court issued an injunction to stop further unfair competition by ceasing to use the infringing “N” logo, awarded New Balance $1.5 million in damages.
Conclusion- By reading the above two recent judgments you might have got some clarity of all possible disputes of IP. By referring to these case laws, we cannot plan the IP strategy. However, to minimize the chances of IP disputes, it is best to discuss all options with appointed counsel. This means doing due diligence to ensure that someone else’s rights are not breached by the company. In-house attorneys must educate their staff on the costs of litigation, monetary and non-monetary.
As you go ahead, your brand becomes famous, if a competitor or infringer using your IP, initiating an IP infringement lawsuit shouldn’t be a wise decision. It is not to say that litigation is never the correct option, but it should only take place after deep consideration of the pros and cons of such action to initiate an IP infringement lawsuit. Sometimes, licensing agreement or cease and desist notice, joint development agreements, open-source software and licensing, key domain name registration can be a cost-effective alternative to filing a lawsuit.
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