02 October 2011

Court decision shows smaller businesses can win ‘passing off’ disputes

A small business has successfully stopped another trader with a similar name from trading in its main postcode areas with that name.

A business called Redwood Tree Services Ltd (‘Services’) had been trading since 1986. It brought a ‘passing off’ action in the courts against another business that had been trading as Redwood Tree Surgeons (‘Surgeons’) since 2004. A passing off action is a court case to stop another business using a name which is the same as, or similar to, your name in relation to their goods or services without your permission.

Passing off cases can be time-consuming and expensive, as you have to show that:

  • Your name has a good reputation (ie there is “goodwill” attached to it).
  • That the name is associated with your business.
  • That there has been a misrepresentation by another trader (which need not be intentional), which leads, or is likely to lead, the public to confuse your goods and services with those of the other trader.
  • That you have suffered damage because of the other trader’s use of your name.

In this case the two businesses were about ten miles apart, but Services’ business was mainly in three postcode areas – GU, SL and KT.

Surgeon argued that the two businesses had co-existed for six and a half years and there was no evidence of significant confusion in the marketplace during that time.

The Court decided that Services was entitled to an injunction to stop Surgeon trading in the name using its name in the GU, SL and KT postcodes. It based the decision largely in its finding that tree surgery was a highly localised business, so that important sources of new business were:

  • Being seen working in a particular area.
  • Personal recommendations.
  • A local services directory, ‘the Little Green Directory’, rather than, say, Yellow Pages.

It therefore decided it could not order Surgeons to stop using its name in the RG postcode area.

Recommendation

  • Businesses, however small, should check appropriate sources regularly, to ensure that there are no businesses operating in their marketplace (or intended marketplace) with the same or a similar name, or consider subscribing to monitoring services that will do it for them, so they can take prompt action if a same or similar name appears.
  • Sources could include:
    • the public index at Companies House, the Trade Marks Register, the Whois domain name registry
    • the internet
    • trade and other directories
  • If an offending name is discovered, take specialist advice in this complex area – particularly, as there may be other remedies available under, for example, trade mark or domain name law, that must be managed and co-ordinated to be most effective.

For more information - or to discuss any issues you may have - please contact Rob Lucas at Shulmans on 0113 297 8941 or at rlucas@shulmans.co.uk.

Case ref:

Redwood Tree Services Ltd. v Apsey (t/a Redwood Tree Surgeons) [2011] EWPCC 14