Blog posts in Ownership and management

Ten reasons to register your trademark

A trademark is an identification sign which is used by a trader to distinguish his/her goods or services from the same or similar goods or services provided by other traders.

Trademarks protect the goodwill you have built-up or hope to accumulate. Trademarks provide an important and effective deterrent to infringement, and a sound basis for legal action if infringement occurs. 

It is possible to register as trademarks, words, logos, 3D designs, sounds and some smells. 

Here are 10 reasons why you should register your trademark.

1. Price – it’s not expensive (only a few hundred pounds for a UK Registered Trademark (RTM) in one class).
2. Business asset - it’s an asset to your business, which looks good for investors, banks and when you come to sell.
3. Stronger - it’s much stronger than relying on “passing-off” to stop others using the same or similar name or logo.
4. ® - You can legally use this symbol with your RTM.  It is a criminal offence to use it without the trademark being registered.
5. Individuality – it provides a good deal of assurance that your trademark is unique.
6. Defence – you cannot be found guilty of infringing someone else’s RTM if you are merely using your own RTM.
7. Company name/logo – can be protected with an RTM.
8. Domain names – can be protected with an RTM.
9. Twitter names – can be protected with an RTM.
10. Product name/brand name/logo – can all be protected with an RTM.

There is more information available from the government Intellectual Property Office (IPO) www.ipo.gov.uk.  It is possible to apply yourself but it may be best to use a trademark attorney as they are not expensive and will make sure you get the right protection without objections being raised by the IPO during the application process.  Trademark attorneys may also be able to offer some initial free advice too.

Lewis Hands is a European Patent & Trademark Attorney at Handsome I.P. Ltd, www.handsomeip.com

Beating the bullies

The issue of workplace bullying has hit the headlines again with allegations about the Prime Minister. As is so often the case, people’s reactions tend to be shaped by their own views. Labour loyalists are quick to describe Gordon Brown as passionate – but not a bully – while political opponents try to stir things up. That’s not an unusual response.

If an employee at work complains of bullying, there’s a tendency to make a judgement based on what we think of the individuals involved. Unfortunately, that’s completely the wrong approach. Even if you are absolutely certain that someone is not a bully, you must investigate any allegations. Doing so helps show the employee that you take their concerns seriously. It also gives you a chance to identify where things have gone wrong and smooth over any misunderstandings.

Perhaps more importantly, failing to investigate properly lays you open to the risk that the employee makes a claim to the Employment Tribunal. The Prime Minister’s case also raises the question of how you handle things if you too are a ‘passionate’ boss. What are employees expected to do if they think you are bullying them – and at the same time, you are the person they are expected to take their grievance to?

Make sure your business has proper disciplinary and grievance procedures. They could save everyone involved a lot of aggravation.

Chris Walker

Divorce and the SME: could you lose your livelihood as well as your love life?

With most small businesses being family firms, it’s a surprise that divorce isn’t mentioned more often as something of a business risk. What would happen to you and the company if your marriage broke up? Following the recent trend of courts handing out huge payoffs to housewives and husbands alike, could you lose your livelihood as well as your love life?

English courts used to leave family businesses out of the equation when totting up the assets of failed marriages – not any more. Now they try to keep the business in the family if it produces enough income to keep two households reasonably comfortable. But if it doesn't – or a warring husband or wife objects – the business will be included amongst the assets to be divided between them.

The courts take the view that, where one partner in a marriage builds up a business, and the other maintains their home, the home-maker's support may be equivalent or “nearly equivalent” in value. Even where judges are not prepared to go that far, they are likely to value the home-maker's efforts much more highly than his (or, more likely, her) partner does. And in that case, even if the stay-at-home wife/husband had zero involvement with the “family firm”, he or she can still effectively force its sale.

Circumstances that make selling the business more likely include:

• a long marriage – anything over 11 years counts. However, home-makers of less than five years' standing have been given big shares of the joint assets when other factors (see below) have been involved
• where the home-maker has sacrificed their career to support the business-builder
• where children, or other family responsibilities, have fallen on the home-maker
• where one or both of the parties has suffered severe illness, redundancy, bankruptcy or a crisis in which they relied heavily on their partner.

However, some marital events make a sale less likely:

• if the business produces little income now and has poor prospects, or if the income depends entirely on the skill and presence of the business-builder
• a short marriage
• a pre-nuptial agreement (they have no legal standing in England but the courts are likely to take them into account if they were properly handled).

If you are faced with a split, you can take precautions to get the settlement right and fair. Start by valuing the assets you brought into the marriage – professionally, if you think they are substantial. If you are an employer, that includes your business. If you are a one-man band and expect to stay that way, don't bother. What you gain on the roundabout you’ll lose on the swings. The longer the marriage goes on, the less useful the valuation will be – but it might be handy for a sudden break-up.

While you are arranging this valuation, try to reach agreement on how the business will be valued thereafter, and reach an agreement on the business value with your spouse, which should at least remove one source of argument. Do not lie about how much the business is worth; your spouse, or even the Court, will see it as a duplicitous attempt to short-change, and take a hard line.

Try to build up assets outside the business during the course of the marriage – you can sell them if needs be, rather than lose the business. Consider holding a substantial part of the business's assets in cash or other easy-to-reach ways; again, if necessary they can be released to fund the settlement. There are other, though less straightforward, alternatives; seek advice.

Case law: workers’ paid holiday rights while on long-term sick leave

Businesses must take note of a recent decision of the House of Lords, applying a European Court of Justice (ECJ) ruling on the holiday rights of workers on long-term sick leave.

In this long-running case, all the workers had been employed by HM Revenue & Customs (HMRC), and brought proceedings under the Working Time Regulations 1998 (WTR) for unfair dismissal. Earlier this year, the ECJ ruled that a worker is entitled to paid annual leave during the time that he has been on sick leave; where he remains unable to work until the end of his employment relationship, he is entitled to an allowance in lieu of the paid annual leave, to be paid at his normal rate of pay.

Giving its decision in this case, the House of Lords overturned the decision of the Court of Appeal from 2005, and ruled, in accordance with the ECJ ruling, that the workers were entitled to be paid for annual leave that accrued while they were on sick leave, on the basis that their claims for failure to pay under the WTR could be treated as a claim for unlawful deduction from wages under the Employment Rights Act 1996, which provides for a longer time-limit for bringing a claim. While this decision will inevitably increase costs for employers who find themselves in this situation, businesses must not be tempted to dismiss employees on long-term sick leave or they risk facing claims of unfair dismissal and, potentially, disability discrimination.

Case law: overpayments to subcontractor may not be recoverable

Businesses must check their subcontractors’ invoices carefully, as they may not be able to recover amounts inadvertently overpaid, according to a recent Court of Appeal decision.

In this case, subcontractors provided services to the main contractor, and submitted invoices calculated on the basis of a daily rate, although there was no record of the number of hours’ work on which the daily rate was calculated. When the subcontractors told the contractor that they wanted to increase their daily rate, the contractor responded with a claim that the daily rate used for the previous six months’ invoices, most of which had been paid, was too high, and that the subcontractors owed them money. A judge in the county court decided that the contractor was entitled to have the invoices re-assessed on the basis of the work actually done by the subcontractors, and could use the difference to reduce the amount payable on the outstanding invoices. However, the Court of Appeal ruled that the judge had been wrong not to distinguish between paid and unpaid invoices; in the absence of any misrepresentation or mistake by the subcontractor, he had no right to permit the contractor to re-open the invoices that had already been paid. Furthermore, the court found that the contractor had made a further substantial payment to the subcontractors after it became aware of the issue of overpayment, which meant that it had waived any claim to recover the money.

This case acts as a useful reminder to businesses to check invoices carefully and, wherever possible, ensure that charges, and the basis on which they are payable, are agreed in writing beforehand.