Competitor registering same business name.

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csirl

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I have some friends who run a small, but successful family business and have been doing so for approx 10 years. In is a partnership rather than a limited company and the partnership name is registered with the CRO as a business name.

As I dont want to disclose the partnerships real name, lets say they are called "ABCDE Services".

Recently, a competitor who operates nearby registered "ABCDE Services" as a business name in his own name/address. This competitor has done this with mallicious intent. While his own business continues under its original name etc., he has sent letters and circulated documentation under the name "ABCDE Services" which has caused confusion among potential customers and lost business for the genuine "ABCDE Services".

My friends have contacted the CRO over this and the reply from the CRO has been that there is no law against people registering business names that are already in use. The CRO online register shows "ABCDE Services" listed twice, albeit with different registration numbers. They subsequently contacted the Office of Corporate Enforcement and the reply from them that this is not against the law. They've sent the usual cease and desist type letter by solicitor, but got a reply from competitor to the effect that he did not care and wasnt breaking any company law.

This is a small family business without the resources to engage in costly legal action and even if they won, collection may be an issue - competitors business is also small.

Has anyone any advice on how to deal with this situation? CRO seem powerless to do anything, is there any other laws that have been broken and can be used to stop the competitor?
 
They need to find a decent Commercial Solicitor to advise them and to act on their behalf.

Have they considered forming a new Limited Company and another trading name and advising existing clients of the situation, (without been malicious), the new name details etc.etc. A carefuly worded letter should be drafted to circulate and then to reidentify your friends business.

Otherwise they could spend a fortune in legal fess and court appearances which could take ages.
 
Registering a trading name gives no rights to that name.

But trading under a name similar to someone else's is known as "passing off". Unfortunately, there is very little which you can do about it other than taking legal action.

You should ask you solicitor about getting an injunction to stop them. If your case is good, they will have to pay your costs as well.

Brendan
 
If they are a small company and are family , maybe it would be worthwhile to add their family name onto the official name as in 'RyanABCDE Services and email all their existing customers to the effect that there has been confusion due to the setting up of ABCDE Services who has NO connection with them etc.
Very often people refer to companies by the family name anyway regardless of the real name, they could make this a marketing opportunity with some incentive for existing customers etc.
 
Have they considered designing a corporate identity? colour schemes, fonts and logos etc? They could copywrite (Or whatever the correct term is) the logo.
For example, I wouldn't be allowed to make my own coca-cola with their branding.
 
Speaking of Coca Cola, could ABCDE Services register a trademark against the name, thereby making the competitor breach the trademark and get him that way ?
 
csirl said:
My friends have contacted the CRO over this and the reply from the CRO has been that there is no law against people registering business names that are already in use.
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I find this very strange. When I was setting up my own Limited Company, 5 years ago, I wasn't permitted to use the business name I'd originally intended as another company, which had been liquidated a number of years previously, had been registered in that name.

Your friends response from the CRO is inconsistent with what I'd been told. Maybe things have changed but I find it hard to believe that two companies would be allowed to register under the same name - IMO, there is too much risk of commercial confusion, particularly when they're trading in the same locality.

As other posters have recommended, your friends should contact a solicitor.
 
business name and company names are different

The odce are another useless government body.
Passing Off is what you have to pursue, but it is through the courts and costly.
 

What was in the letter and documentation that would lose business?
 
Brendan said:
You should ask you solicitor about getting an injunction to stop them. If your case is good, they will have to pay your costs as well.
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Having recently been threatened with an injunction (I hasten to add I believe completely in the wrong and the persons who threatened it did not proceed as they obviously felt the same deep down!) I would point out that you may have the strongest case in the world and may indeed have costs awarded against the defendant....but you are responsible for paying your own legal team and then you must persue the defendant for these costs like any other debt (and there are numerous threads showing how difficult it is to get money out of people). You don't walk away from court owing nothing. Injunctions are horrendously risky and expensive and your solicitor won't send that threatening letter unless he's sure you are prepared to lose 10 grand+ should it all go pear shaped in court. In the case of a small company it is likely the law will be a waste of space as it often is. It'll make the barristers a good few pound of course but better to take a different route for long term sanity!
 

My friends' do not think that they would ever recover the costs. They believe that the main reason the competitor is doing this is because his business is failing because it cannot compete with my friends' company.

What was in the letter and documentation that would lose business?
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I asked them this question myself over the weekend. They mentioned two things.

1. Letters were written to potential customers along the lines that Mr. XYZ is the new manager of "ABCDE Services" and if you want to avail of "ABCDE Services" services please contact Mr. XYZ - phone & email details given.

2. This is the most worrying one. They were contacted by a supplier regarding unpaid invoices. Person from accounts section of supplier rang them up and was very irate that they had received 2 consignments of supplies and not paid for them. After asking to be faxed copies of the orders, they discovered that the 2 unpaid invoices related to the fake "ABCDE Services". So it appears that the competitor is ordering supplies in the name "ABCDE Services" and not paying for them. Thankfully in this instance, they knew the Managing Director of the supplier and were able to sort it out and MD told staff to be careful and not take orders from the competitor. However, they are worried that similar debts in the name "ABCDE Services" may be run up elsewhere. They fear that potential suppliers will not believe that they are not the same company and will not be interested in stories like "thats not our debt, its the other ABCDE Services in our area......." and will refuse to deal with them.
 
Item 2 would seem to be fraud and perhaps is something to go to the Police for advice on. They might investigate it.

Could you contact all suppliers, informing of the above and how to determine a real order from the geniune company. Also a advertising campaign to inform customers and potential customers of how to identify the geniune company also. By address for example or company identity, logo/branding etc. If you don't mention the fake company specifically it might have a negative effect on the fake company and thus the competitors company by association. Of course theres a risk of adding further confusion, which is harmful to the genuine business. I thinking the genuine business has little or weak company identity in terms of branding, logos etc. Something like advertisting with a photo of the business, and the address etc.

I have no experience of this kind of situation, this is just my 2 cents.
 

They've plans to do this - using their personal names and details of their company history & address in advertising leaflets plus huge emphasis on the correct phone number and email addresses for customers placing orders. They are also copyrighting their logo and use it more prominently in everything.
 
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