# Trade mark issue & Sole trader



## lozza (1 Feb 2011)

Hi All

its been a while since I posted here, but I hope you can help.

My logo is currently under application with the Patents office, a large multinational company are objecting to it, I don't think I am infringing on them in anyway and have reduced the classes I was applying for to ensure that I wasn't infringing on them.

Anyway they currently have an extension to file evidence under rule 20(1) but a throw away comment from a family member is stressing me out. I am operating as a sole trader and he told me I should switch to a limited company asap so they can't sue me.  Would they sue me?  I am totally stressed thinking our family home is going to go etc. Sorry if I am being Naïve but my business in a small online business run from home, a business which I have yet to take a salary from as I am still building it. There is no way I could afford to go up against this company.

Any advice appreciated!


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## Paddy199 (1 Feb 2011)

Incorporation does limit ones liability.


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## lozza (1 Feb 2011)

But is it likely that they would do you think? Money is very tight right now and it seems a very drastic thing to do for a business that is already struggling..


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## T McGibney (1 Feb 2011)

If your choice of logo is causing you worry, then change it...


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## dahamsta (1 Feb 2011)

No-one here can tell you whether an unnamed company is going to sue you or not. Either change your logo, incorporate if you can afford it, or take the risk.


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## Pope John 11 (1 Feb 2011)

dahamsta said:


> No-one here can tell you whether an unnamed company is going to sue you or not. Either change your logo, incorporate if you can afford it, or take the risk.


 A logo can be a very powerful addition to the company therefore changing it is not as easy as one thinks, because your logo tells a story about your company. Its best talk to a patent expert, if it is that important


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## lozza (1 Feb 2011)

dahamsta said:


> No-one here can tell you whether an unnamed company is going to sue you or not. Either change your logo, incorporate if you can afford it, or take the risk.



I know and appreciate the point. The logo is not the issue its the name of my website that is the issue. We contain part of the same word and although we sell in the same sector it is completely different areas.

A patent attourney is the best option, just funds are so low


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## T McGibney (1 Feb 2011)

dahamsta said:


> incorporate if you can afford it, or take the risk.



As was mentioned above, incorporation doesn't protect a sole trader from (1) being sued; (2) being held liable - least of all in a dispute with a multinational company.


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## Pope John 11 (1 Feb 2011)

As an example, see below:

Someone uses Boca-Cola for a new drinks product. This would be in conflict with coca-cola because of the use of the word 'cola'.

Both use the same word 'cola', now if they are two different companies then you could easily see that there would be a conflict between the two, in other words one company would be riding on the wave of the other more successful company etc.

This merely is just an example, but I think you get the picture.


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## dahamsta (1 Feb 2011)

T McGibney said:


> As was mentioned above, incorporation doesn't protect a sole trader from (1) being sued; (2) being held liable - least of all in a dispute with a multinational company.



Eh? Mentioned by who? And how is an incorporated company a sole trader?


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## T McGibney (1 Feb 2011)

dahamsta said:


> Eh? Mentioned by who?



Eh? Paddy199....


Paddy199 said:


> Incorporation does limit ones liability.









dahamsta said:


> And how is an incorporated company a sole trader?



The OP said "I am operating as a sole trader and he told me I should switch to a limited company asap so they can't sue me."


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## dahamsta (2 Feb 2011)

Paddy199 said that it limits liability. You said that it doesn't protect them from being liable. These statements are completely at odds with each other.

On the 2nd point, the sole trader can't be sued if he incorporates, the company will. They'd be two completely different entities, and the entity that would be sued would have limited liability.


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## lozza (3 Feb 2011)

Thanks all for your input. I think I need to speak with a legal person on this. Anyone know of someone who would give me 10mins of their time???


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## T McGibney (3 Feb 2011)

dahamsta said:


> Paddy199 said that it limits liability. You said that it doesn't protect them from being liable. These statements are completely at odds with each other.



It would be a sad world if we have to agree with each other all the time. 



dahamsta said:


> On the 2nd point, the sole trader can't be sued if he incorporates.



Of course he can. He's already in business as a sole trader and his logo is already under application with the Patents office. 

Sadly, a business person can't eliminate business risks by simply forming a company.


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## Paddy199 (3 Feb 2011)

They certainly can't eliminate all business risks but they can reduce ones exposure. Why are personal guarantees so important now - because creditors can't get at the shareholders. Unless they have given PGs, retention of title or the directors have acted fraudulently / recklesses and therefore outside their fiduicary duties.

From memory, a legal action cannot be taken against a company thats why an individual from the company has to be a named defendant. However, the liability rests with the company somehow. This is best addressed by a legal person.

But as you all say, he is currently set up as a sole trader and has no protection whatsoever at the moment.


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## T McGibney (3 Feb 2011)

Paddy199 said:


> From memory, a legal action cannot be taken against a company thats why an individual from the company has to be a named defendant. However, the liability rests with the company somehow. This is best addressed by a legal person.



All well and good Paddy, but I don't see how this is at all relevant to the OP's situation? 

Are you saying that if I invent a fizzy drink and call it Boca Cola, I can't be sued if I form a company? That makes no sense to me.


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## dahamsta (3 Feb 2011)

T McGibney said:


> It would be a sad world if we have to agree with each other all the time.



Do you even read your own posts? You said:



T McGibney said:


> As was mentioned above, incorporation doesn't protect a sole trader



It wasn't mentioned above. The exact opposite was mentioned above.


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## Paddy199 (3 Feb 2011)

T McGibney said:


> All well and good Paddy, but I don't see how this is at all relevant to the OP's situation?
> 
> Are you saying that if I invent a fizzy drink and call it Boca Cola, I can't be sued if I form a company? That makes no sense to me.


 
He should definitely get out of the sole trade setup and incorporate. And yes I am saying that as an individual shareholder, your liability is limited to your subscribed capital. There not called private limited companies for nothing. And remember, a company is a seperate legal identidy. As I previously said, I do think a named individual does have to be named as a defendant on behalf of the company for some reason or another. A legal person can clarify this.

I can't see why this business, incl. the website and logos cannot be transferred to a corporate structure and reduce this persons exposure.


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## T McGibney (3 Feb 2011)

But if the multinational company becomes aware that the existence of the logo predated the existence of the company (meaning that he, rather than the company, developed it), won't they be able to take action against him (for developing the logo) in addition to any action they might take against the company (for using it)?


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## Paddy199 (4 Feb 2011)

T McGibney said:


> But if the multinational company becomes aware that the existence of the logo predated the existence of the company (meaning that he, rather than the company, developed it), won't they be able to take action against him (for developing the logo) in addition to any action they might take against the company (for using it)?


 
But how can they prove causation of losses for just developing it? I doubt they could have a substantial claim here.

However, if he is using it and making profits, there could be a substantial claim here. I would rather this element in a corporate structure. And remember, proving causation is one hell of a task.


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## T McGibney (4 Feb 2011)

He isn't making profits though. According to the OP



lozza said:


> my business in a small online business run from home, a business which I have yet to take a salary from as I am still building it. There is no way I could afford to go up against this company.



I still think the simplest way of avoiding any problem is to change the logo and/or brand identity. From what the OP is saying, they can't afford to contest any proceedings brought by the multinational, regardless of whether or not they incorporate.


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## lozza (10 Feb 2011)

T McGibney is correct I cannot afford to contest them.  It is so disheartening I shared the problem with another poster here and they like everyone I have shared with all concurr that this multinationals dispute is ridiculous but they have won the last 63 trademark cases that they objected to so they obviously have a big legal team behind them. And I can't afford to be a David to their Goliath!

I wonder should I wait and see what they put in their next objection to the trademark office and then offer to change my websites name?  Might deter them from going the legal route?

thanks all for your input


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## DeeKie (15 Feb 2011)

Sometimes those that dispute trade marks are willing to enter to a coexistence agreement where both parties agree to stay off the other's turf (so to speak). You could suggest that. 

On the issue of incorporation, you need to remember that you have to transfer all of your assets (e.g. your tm and trading contracts) into the company and that incorporation wont eliminate the risk of being sued for use of the tm up to the point of transfer. However, once the company is incorporated then it does limit your exposure and perhaps it is something you should be thinking about in the long run.


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