When companies operating in the same field use similar names, the result can be legal fireworks. That was certainly so in the case of rival furniture retailers, one of which was found by the High Court to have caused public confusion.

The Sofa Workshop Limited launched 'passing off' proceedings against Sofaworks Limited. Passing off is the legal term for when a business trades on the goodwill of another by using a name or trading style similar enough to the other firm that the average person might be unaware that it is a different business.

In upholding the claim, the Court found that a significant proportion of consumers were likely to be confused by the similarity of the two names and might believe that the companies were in some way economically linked. Sofa Workshop had suffered material damage to its goodwill as a result.

Sofa Workshop had also claimed that Sofaworks had infringed its Community Trade Marks (CTMs), but this claim was rejected on the basis that the marks were invalid. That was because they had in some respects not been used and because the company only had a modest trading presence in European countries other than the UK. For a CTM to be accepted as valid, there must normally be substantial use in more than one member state of the EU.

Validity of a CTM can also be established on the basis of 'acquired distinctiveness' where the trade mark can be demonstrated to have a distinct identity in several different EU countries.

Says Roy Colaba of Sydney Mitchell, "This dispute may well have arisen because the new entrant to the market inadvertently chose a trading name too similar to an established business. This could have been avoided had professional advice been taken at the outset."

For further information, please contact Roy Colaba on 0121 698 2200 email, r.colaba@sydneymitchell.co.uk or complete our online enquiry form.

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