Goodwill: unregistered trade marks
The term “trade mark” refers to a name or symbol used to identify the goods produced by a particular manufacturer or distributed by a particular dealer that distinguishes them from products associated with competing manufacturers or dealers. It can also refer to a name or symbol used to identify services provided by one undertaking from those provided by other undertakings.
A trade mark cannot be registered unless and until the holder makes a successful application under the provisions of the Trade Marks Act 1994 or a similar Act in non-UK jurisdictions. Following registration a trade mark will revert to its unregistered status if it is not renewed at the end of its initial registration period.
Unlike the position for registered trade marks, see CG68220, there is no right of action for infringement of an unregistered trade mark. The only protection available in law for an unregistered trade mark would be by means of an action for “passing off”. Passing off is a wrongful invasion of a right of property vested in the claimant. The right which is protected by an action for passing off, however, is not the claimant’s proprietary right in the unregistered mark, name, logo etc which the defendant has misappropriated but the goodwill and reputation of his business which is likely to be harmed by the defendant’s misrepresentation. In order to succeed in an action for passing off the claimant must prove that goodwill existed in the unregistered mark, name, logo etc in question. An action for passing off does not protect the unregistered trade mark itself but the goodwill of the business in which it is used.
An unregistered trade mark is an intrinsic part of the goodwill of a business. It does not exist as a separate asset within the meaning of TCGA92/S21 (1). It is not capable of assignment separate from the goodwill of the business in which it is used.
Any case in which it is argued that an unregistered trade mark has been transferred without the business in which it is used should be referred to the CG Technical Group.
Guidance on obtaining valuations of goodwill is given at CG68300+.