What if someone steals your company name?

Entrepreneurs, in this day and age, might disagree with William Shakespeare, who once said, “What’s in a name,” because there is a lot to their company’s name. It reflects the company’s vision, its product profile and the customers’ expectations. It reflects the brand; the identity of the company.

What if someone else is running a business using the same name as your company? You surely don’t want your brand equity to get diluted and your TG to get confused. So what should you do? Who to approach? 

What legal action can be taken?

The law can come to your rescue through the Trademark Act, 1999 and its various sections.

“The Trademark Act, 1999 provides in Section 135, that in case of suit for infringement (where the complainant’s mark is registered trademark) and/or passing off, (common law remedy applicable to cases where complainant has unregistered trademarks), the relief of injunction, delivery up of infringing goods, damages or account of profits is available,” says Karnika Seth, Attorney at law & Partner, Seth Associates.

“Trademark Act, 1999 also provides criminal remedy in Section 103,” adds Seth.

Under it any person who uses another person’s registered trademark without authorisation can be punished. The punishment can be imprisonment for a term of six months, which can extend up to three years and with fine of not less than Rs 50,000 that could extend to Rs 2 lakh.

There is yet another case that can arise. The other person’s mark might not be the exactly same but deceptively similar (and also registered) to the registered trademark in question. In such a case, an application for rectification to cancel that trademark from the register of trademarks may also be made under Section 57 of the Trademarks Act, 1999 on the ground of any contravention or failure to observe a stipulated condition entered on the register.

How long will it take and how much will it cost?

When starting a legal battle time and cost incurred are major concerns.

According to Seth, criminal remedy and rectification may take about 12 to 18 months depending on various factors. Civil suit may take even longer although by way of interim relief interim injunction is granted at an early stage and a local commissioner is appointed to conduct search and submit a report.

The procedure is not very expensive considering the value in protecting long term interest of the name/trademark.

How to avoid your business name from being stolen?

You have to be foresighted enough to get your company name registered as a trademark as soon as you christen it or whenever you think it is apt. This is the best means of protecting a business name. Registering a trademark acts as a shield against misuse of that mark by other parties. 

Seth suggests, “In case any other person imitates your registered trademark or uses a mark similar to it then criminal and civil remedies are available. Section 27 of the Trademark Act, 1999 empowers registered trademark holders to institute legal action for injunction and damages.”

“If you do not register your company name you can initiate an action against someone stealing your company name only under passing off, which is harder onus than proving an infringement under statutory law. Because to satisfy ingredients of passing off the mark in question should have a very strong popularity and goodwill,” Seth adds.