Esolutions is the name for the new Telecom-EDS-Microsoft e-commerce brand, but New Zealand already has a company called E-Solutions, working in the same field. To make matters worse, E-Solutions' technical manager, Bruce Trevarthen, helped set up Telecom's division and still does work for the company on a contract basis.
"I'm reluctant to take legal action until I see how things pan out because they're a big customer and I don't want to burn any bridges," says Trevarthen. But he says the confusion is already taking hold.
"We were contracted by Telecom to do some work for a customer and they were getting confused because we all had 'esolutions' in our email address. We were being blamed for things that were outside our control because to them we were all Telecom."
Trevarthen registered the name with the Companies Office in September 1998 and has been trading since then.
But Telecom spokeswoman Linda Sanders says the name is a generic one that is available for anyone to use.
"EDS has an e-solutions package, so does IBM. It's a generic term. People have been using 'telecom' to describe the whole industry for years without a problem."
Trevarthen has talked with Telecom over this issue many times since he became aware of the problem. He was assured Telecom would only use the 'Esolutions' brand in association with the alliance company names. In an email Trevarthen received from Telecom's Vaughan Smith on October 18, Smith reassured him of that.
"Esolutions is to be used in conjunction with the Telecom, EDS and Microsoft brands when it refers to the alliance. I would not expect confusion."
Sanders says the same thing. "The new alliance will only be using the name 'Esolutions' in conjunction with the three companies' names." However, the press release announcing the alliance used the term 'esolutions' as a separate brand four times.
"We expect e solutions [sic] to play a vital role in New Zealand's emerging online economy," says the release.
Trevar tried to register the E-Solutions name with the Intellectual Property Office (IPO) as a trade mark but was rejected because it was considered a generic name.
The legal position on 'esolutions'
Sheana Wheeldon, a solicitor with commercial law firm Kensington Swan, says the overall issue is a tricky one. "The first issue would be whether anyone has registered the name as a trade mark, not as a company name."
Wheeldon says registering a company name only means that exact name is unavailable to other companies and offers no other protection.
"The only way to get a complete monopoly in a name in your own area is to register it as a trade mark," says Wheeldon, but there may be complications on top of that.
"You would have problems if it was a descriptive name. If it's used generically then no one is likely to be able to claim a monopoly in it."
Wheeldon says there are two other issues that need to be considered with company names.
"The other issues that could be relevant here are passing off or misleading conduct under the Fair Trading Act."
Passing off is said to happen when one business has been using a name for a while in a specific area and another business starts using the same name. The second business could be seen to be passing itself off as the first and probably engaging in misleading conduct as well.
"Misleading conduct is probably easier to succeed on because you don't have to show that you've suffered any damage," says Wheeldon. Customers may be confused and business may even be diverted to the new company. Because the act was intended to offer consumer protection, the courts are keen to make sure people aren't being misled by businesses using names that are too similar to other business names.