Limit the impact of a trademark dispute on your business..
Here's what you need to know to avoid issues.
Words by Dr Martin Douglas Hendry
Trademark disputes can be very disruptive to businesses.
Unless handled in a proactive and tactical way they can have a significant impact on resources including time and money.
In some of the worst-case scenarios, this also means a rebranding exercise and the destruction or loss of previously branded goods.
Whether you are seeking to enforce your trademark, or find yourself in a position where someone is enforcing against you, it is important to seek to resolve the dispute as quickly and as positively as possible.
Virtuoso Legal is an intellectual property specialist law firm that spends 100% of its time helping businesses with IP. A significant amount of the firm's caseload concerns assisting businesses with trademark infringement claims from either side of the aisle. You can read some of our case studies as it relates to solving high-profile IP disputes here.
In this guide, we will look at some of the key ways to resolve of a trademark dispute.
This guide will provide you with some clarity as to what happens during a trademark dispute.
Should you be experiencing a trademark dispute it is recommended that you only act upon the advice of a lawyer who has reviewed your situation comprehensively.
What is a trademark?
A trademark is a sign used to distinguish goods or services of a particular trader from those of other traders. A trademark can be a name, signature, word, phrase, letter, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent. In the UK, you can register trademarks which are capable of graphical representation under the Trade Marks Act 1994. The benefits of registration include that it creates a legal presumption that you own the trademark and that it is distinctive of your goods or services, making it easier to take action against anyone who uses it without your consent.
To be registrable, a trademark must be capable of distinguishing the goods or services of one trader from those of another.
There are a number of different forms of trademark that can be registered in the UK, including:
- Words, including personal names
- Aspects of packaging
- Positioning on a product
Examples of popular trademarks in the UK
For the sake of clarity, we include some examples of famous trademarks below.
- Coca-Cola – One of the most popular and well-known drinks in the world, Coca-Cola is also one of the most popular trademarks in the UK. The red and white logo is instantly recognisable, and the company has built up a strong reputation over the years.
- McDonald’s – Another very popular brand in the UK, McDonald’s is best known for its fast food restaurants. The golden arches logo is one of the most recognisable in the world, and the company has a strong presence in the UK market.
- Nike – A leading sports and fitness brand, Nike is hugely popular in the UK. The ‘swoosh’ logo is instantly recognisable, and the brand is often associated with high-quality products.
- Amazon – One of the world’s largest online retailers, Amazon is also one of the most popular trademarks in the UK. The company’s logo is simple but effective, and the brand has built up a strong reputation for quality and convenience
In each case, the brand element that the buying public recognises and trust is protected by a trademark that stops other businesses from using something similar that could be confusing.
The same goes for businesses of any size, who, having a registered trademark seek to secure a unique "look and feel" in their respective marketplace.
Why might there be a dispute over a trademark?
Businesses seek to register and enforce trademarks as a way of securing a certain look and feel in the marketplace.
Trademark disputes typically arise when a 3rd party makes use of a brand element that is either identical or similar to the registered trademark.
In legal terms, this is known as infringement - which in the practical sense means that something is being used that is legally too close to a registered trademark.
As a result of it being too close, this can confuse the buying public who misattributes the source of the goods.
An example of this might be some sports goods which have a "tick" on them, but which do not originate from the company Nike. It is reasonable to assume that the use of a similar branding element here would cause confusion in the buying public who would then buy this instead of authentic Nike goods.
Whether or not the use of this particular "tick" was deliberate infringement or not - it is likely that Nike would initiate a trademark dispute against the business that made these goods and win on legal grounds.
What are the things that can happen when a trademark dispute arises?
Should a trademark dispute be in the offing, and dependent on the facts of the case and the legal arguments being made, a range of different scenarios can play out.
Outlined below are some of these - from the perspective of the Claimant and Defendant.
When a trademark owner suspects infringement they will typically engage an IP dispute specialist to examine the accuracy of their complaint and gather evidence.
Once this has been completed - the Claimant will usually follow "pre-action protocol" in contacting the other side with a particularised set of legal complaints based on the alleged infringement, and a set of undertakings for the Defendant to complete in order to stop the claim from going any further.
Undertakings are commitments which bind the Defendant to a set of actions in order to not trigger the claim being issued and legally enforced.
They may typically include things such as:
- Cease of use of the offending alleged infringing marks (this can also be legally compelled via the Court in an interim injunction in certain circumstances)
- Offering up and/or destruction of goods and material bearing the alleged infringing marks
- Damages as it relates to the Claimant's estimation of diverted revenue
There may also be other undertakings specific to the claim being made. However, it is important to note that these undertakings are based on the Claimant's assessment and may or may not reflect the reality of the liability.
Crucially, upon receiving a trademark infringement claim, the Defendant should speak to trademark dispute lawyers in order to ascertain their liability and the best course of action moving forwards.
Notably, non-compliance with undertakings will often result in an issued claim which usually seeks to enforce the restrictions listed in the pre-action correspondence via a Court order.
Should such a claim be issued this typically results in a significant increase in resources being spent on the claim, as correspondence, disclosure and evidence gathering will be required to resolve the claim.
It is important that a cost-benefit analysis is undertaken by the Defendant of a claim, to assess whether complying with the undertakings in the first instance, mitigation, or entering proceedings is the most commercially beneficial course of action.
Should a claim be issued, this typically results in further responsibilities for the Defendant including:
- Compliance with disclosure - in essence, offering up evidence relating to the claim for examination by the Court - usually, relates to the extent to which the alleged infringing trademark has been used within the course of trade in order to ascertain the accuracy and commercial impact of the alleged infringement.
- Payment of the other sides' legal costs, should they lose the claim - crucially, should a claim be lost by either side, it is typically the case that the loser can be compelled by the court to pay the winner's legal costs. Ultimately, this is about the restoration of the winning party to the position they would be in should the incorrect claim not have been brought.
As a consequence it is very important to be sure of your prospects of success should a trademark dispute enter issued status.
During this time, various forms of settlement or agreement may be negotiated prior to a trial beginning - these offer the parties various routes to resolve the trademark dispute. (These are expanded upon in the following section).
Should a resolution not be reached, a trial is undertaken, wherein both sides present evidence for and against the trademark dispute.
Trials often take a significant amount of time and resources to prepare for - and can themselves run for several days.
Upon conclusion of the trial, the presiding Judge hands down a legal judgment. This decides the claim for or against the Defendant and will then typically be followed by a further evaluation and decision relating to costs and damages awards.
Notably, any decision at this point is legally binding beyond being a contract between Defendant and the Claimant. As such, any further infringement or deviation from the judgment will be enforced strongly.
For some brands, the importance of the brand in question, and the strength of their legal standpoint means that trial is unavoidable and essential. However, as above it is important that the decision to see a trademark dispute to the point of trial is made with commercial strategy and impact firmly in mind.
What do the parties need to do in order to resolve a trademark dispute?
The resolution of a trademark dispute can happen in a number of ways, and at various different times in the process set out above.
It is important, however, whether the Claimant or the Defendant, to resolve the dispute in such a way as to achieve the best possible commercial outcome.
Below are some of the scenarios that can play out.
Pre-action or issued claim
- Compliance with undertakings (including injunction if relevant) set out in the pre-action correspondence
- Strong denial of the claim made in the pre-action correspondence (and a lack of appetite or legal standing from the Claimant to continue to bring the claim).
- Negotiation of a mutually agreed settlement (e.g. co-existence agreement)
- Defendant success at trial, defendant no longer compelled to comply with full undertakings
- Defendant defeat at trial, compelled to fulfil court order as it relates to the dispute
- Pre-judgment settlement (negotiation of a settlement between parties prior to the judgment being handed down. This is typically in favour of the party who is performing best at trial. Often a damage limitation exercise.
For the most part, it is generally beneficial for both parties for a trademark dispute to be resolved as soon as possible - and in the best interests of both sides.
Despite this, those who own trademarks are well within their rights to enforce the boundaries of their brand as strongly as they wish, as this is the source of their unique appeal in the marketplace.
Erosion of brands can result in a significant decline in revenue and market position, as the unique look and feel of an entity become indistinct and unappealing.
What can businesses do to avoid trademark disputes in the first place?
Trademark disputes can be costly and time-consuming to resolve. They can also damage the reputation of the businesses involved.
That's why it's important to try to avoid them whenever possible in the first instance.
One way to avoid trademark disputes is to do a thorough search before choosing a trademark.
This should be undertaken in order to have a clear idea of what trademarks are already registered and could cause a problem, as well as the litigation appetite from the owners of the trademarks.
This will give you an indication ahead of time whether the use of a brand is likely to result in a trademark dispute.
In essence, there is a strategic approach to brand protection and trademark registration which results in the most distinct and appealing brands which consequently are strongly enforceable.
It is important for brands seeking to enforce their trademarks to be conscientious of the cost of doing so - and awareness that ground given away to collective marginal infringers can erode the distinctiveness of a brand.
This will help to ensure that the trademark you choose is not already in use by another business. It's also important to choose a distinctive trademark that is not too similar to other trademarks.
Seeking to avoid, or mitigate the impact of a trademark dispute is an uneviable position.
Businesses, after all, want to focus on what it is that they do and not be distracted by the stress and responsibility of a trademark dispute.
For businesses of a certain stature trademark disputes are likely to be unavoidable in one way or another.
This is especially so for businesses when they are establishing their brand footprint - or seeking to enforce the contours of their brand.
Crucially there is help out there, and specialist firms like ourselves are able to not only deal with trademark disputes as and when they arise, but help businesses develop strategy to navigate the brand protection landscape.
If you want to speak to our team to discuss how we might be able to assist you, click the button below to book in a free consultation call with our team of trademark dispute specialists.
In this article we have reviewed:
- what trademarks are
- how trademark disputes arise
- what a typical trademark disp[ute can look like
- possible outcomes and resolutions of a trademark dispute
- how to avoid trademark disputes in the first instance
As trademark dispute specialists we have assisted hundreds of businesses in resolving trademark disputes, from either side of the aisle and at each stage of the process.
The key, as mentioned previously, is to ensure that a clear understanding of the commercial position of the business is factored into the process - to ensure that the best possible outcome can be achieved.
Are you in the process of dealing with a trademark dispute? Would you like to speak to trademark dispute specialists to identify your options, ideal outcome and prospective costs?
Our team are ready to speak with you today. Click the button below to arrange a free consultation call with our team, where we will outline how we can help you and provide a quote for our services.
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ABOUT VIRTUOSO LEGAL?
Virtuoso Legal is a team of intellectual property specialists based in Leeds and London - operating worldwide. Virtuoso Legal's team of IP experts have successfully tried cases in the IPEC, High Court, Court of Appeals and United Kingdom Supreme Court. In addition, the team assist companies in creating, commercialising and protecting the big ideas that make their business unique. The firm and its professionals are ranked yearly in legal directories such as the Legal 500 and Chambers and Partners, cementing their status as a Top 2% law firm in the world.
DISCLAIMER: The content within this post is for educational purposes only. Virtuoso Legal does not take any responsibility for those that use this information and waives any liability for any resulting effect on your personal or commercial circumstances. If you are experiencing an issue and need advice, we strongly encourage you to contact a solicitor to identify your best course of action.