Keeping hold of the real power in the name game

In the same week that fashion entrepreneur Karen Millen was told she could not use her own name in business, Specsavers were given the green light to trademark the word should've on the grounds that it had become eponymously linked to the retailer through their long-standing marketing slogan. The two outcomes throw the spotlight on the increasing complexity faced by companies looking to build and retain brand identity.

Karen Millen lost the latest round in her court battle against the current owners of the fashion chain she founded with her ex-husband. The couple sold the retail chain to Icelandic investor Baugur for £95 million in 2004. At the time, the agreement set out that she could not use her name in a new business venture at any time in the future.

Since then, Millen has made a number of attempts to use her name to launch a new business, pointing to the restructuring of the brand following the Icelandic banking collapse in 2008, or by proposing to operate outside the fashion sector, but without success. Her latest bid was rejected by the court, which said there would be too much confusion between the current fashion brand and whatever new business Ms Millen set up.

Confusion was not an issue for the Intellectual Property Office when it announced its approval of a trademark application by Specsavers, despite the request being to trademark the terms should've and shouldve. The move was intended to protect the retailer's well-known catchphrase, should've gone to Specsavers. Despite being a word in everyday usage, the application got the go-ahead on the grounds that a business was entitled to trademark a common word or phrase when it was linked through use or association. The Intellectual Property Office decided that since the catchphrase was introduced in 2003, the word has become eponymous with Specsavers. There will be two months in which objections can be raised to the approval.

The move by big business to stake and defend its claim on every possible aspect of brand identity is behind the increasing numbers of court actions and growing numbers of trademark applications. Figures compiled by the EU show that the number of applications has surged over the past two decades, with the US, Germany and the UK topping the leader board for the number of new trademark applications by country.

The latest action by Specsavers follows in the footsteps of international social media giant Facebook, which has tried to control the twin components of its name. The US Patent & Trademark Office allowed the company to register the word face in 2010, but so far it seems to have held out against the word book. This didn't stop Facebook launching legal action against a small website called Teachbook, which saw the teaching forum compelled to change its name.

Similarly, looking at the ban on Millen, her case is the latest in a long line involving fashion designers who have been prevented from using their name in any new business after selling up, including Royal wedding dress designer Elizabeth Emannuel and Thierry Mugler, amongst others.

But the position in which these designers found themselves contrasts sharply with that of the queen of shoes, Tamara Mellon, who said in her autobiography that Jimmy Choo never designed a single shoe and that she was the real creative force behind the shoe designs that helped found a multi-million pound international company. Mellon made herself synonymous with the Jimmy Choo brand but was free to use her name to build her next business because, unlike Karen Millen, her name was not tied to the company. It meant she was free to capitalise on her reputation when she set up her own Tamara Mellon empire after selling the Jimmy Choo brand to investors.

Where a business bears the name of its founder, it's inevitable that their name will be inextricably linked to the goodwill in the event of a sale of all or part of the business. Any investor will want to ensure that it is going to be able to hold on to all goodwill and any intellectual property, and if that includes the founder's name, then that will be tied tightly to any agreement. That's what lies behind agreements such as those signed by Karen Millen.

Business needs clear definitions of ownership, whether it derives from a founder who lent their name to a brand, or through words, images or even sounds and colours that have become synonymous with a product or company and are capable of being trademarked. For example, the colour purple has become a long-standing battleground for Cadbury's, over its trade marking of a specific pantone reference in 1995.

Choosing to lend your own name to your start-up company may be for reasons of pride, in wanting to put your name above the door as the Victorians did in the glory days of industrialisation, but it's worth taking a cool view of your medium and long term game plan. Do you think you're building a business to sell? If so, you may want to create a company name, so you get to keep your own name for the future.

But where a founder has decided to use their own name, it makes sense to register the name as a trade mark, with themselves as the owner, rather than their company. It's a route that offers great control over the name when negotiating terms in any sale or investment situation, as the trade mark will not be part of the company assets. The founder could choose, for example, to negotiate a license for the new owners to use the name, or, if the founder decides to end their involvement with the original brand, then they may have more leverage to negotiate how they get to use their name again in future.

Millen v Karen Millen Fashions Ltd & Anor [2016] EWHC 2104 (Ch) (16 August 2016)

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This is not legal advice; it is intended to provide information of general interest about current legal issues.