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Trade Marks, Goodwill and the Commercialisation of your Brand

Keltie LLP

K2 IP Limited

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BrandsIn the final article in this Intellectual Property (“IP”) series, we look at the protection and commercialisation of brands or trade marks.

Trade marks are business identifiers which are generally comprised of one or a combination of the following elements: words, logos, slogans and even colours, shapes and sounds. Generally, anything in which your business has acquired goodwill and acts as an indication of trade origin can be considered a trade mark.

It is recommended to protect those trade marks of value to your business by registering them at the IP offices of the countries of commercial interest. Trade mark registrations provide prima facie evidence of a business’ rights in a mark and ensure that business is able to prevent third parties causing confusion in the marketplace, or taking advantage of its goodwill in its mark, by using an identical or similar trade mark.

Once in place, trade mark registrations can also be licensed or assigned to generate revenue for your business and are valuable business assets.  

Trade Mark Registration

Step 1: Clearance Searches

Before adopting or attempting to register a trade mark, it is recommended that clearance searches are conducted in the countries of interest, to ensure that there are no conflicting earlier third party registrations.

Unfortunately, many businesses adopt trade marks without being aware of the risk of infringement of earlier trade mark registrations and end up having to undergo a costly rebranding exercise, just as their business or new product under the particular mark is becoming successful.

By considering the issue of conflict at an early stage in the adoption of a new brand (preferably at the brainstorming and design stage), you will avoid having to incur significant legal and rebranding costs later down the line.

Step 2: Assessing the Inherent “Registrability” of the Trade Mark

In order to be registered, a trade mark must be distinctive. That is, it must not be descriptive of the goods and services for which registration is sought or otherwise non-distinctive (for example, being comprised of a generic or laudatory word or expression).

Whilst descriptive marks can be attractive from a marketing perspective, conveying directly to the public the nature of the goods or services in question, these sorts of marks are not desirable if a business wishes to consider registered trade mark protection.

In the event that the chosen mark is descriptive or non-distinctive, it is recommended that it is combined with some other distinctive matter, for example, a distinctive device element, before registration is sought.

Step 3: Preparing the Trade Mark Application

In order to obtain a trade mark registration, it is necessary to specify the goods and/or services for which protection is sought; these should be the goods of current or potential interest to a business. Whilst it is, in theory, possible to seek registration of a mark for all goods and services, there must be a genuine intention to use the mark for those goods and services covered by the registration and so, in practice, it is very rare for a business to look to obtain broad coverage in this way.

Moreover, as the range of goods and services covered by an application for registration increases, so does the cost of the application (goods and services are classified into 45 different classes and the costs of an application are determined by the number of classes covered); seeking protection in relation to a very wide range of goods and services is a costly exercise.

A trade mark attorney will be able to prepare a trade mark specification of goods and/or services, taking account of the practices of the territory in which protection is sought. However, preliminary guidance is available on the UK Intellectual Property Office website.

Step 4: The Application Process

The length of time that it takes for an application to mature to registration varies depending on the territory in which the application is filed but, on average, an application takes between 6 and 18 months to reach registration.

During the application process, applications are usually examined by the intellectual property office of the country concerned and, if accepted, they are published in trade mark journals to give third parties the opportunity to oppose registration, should they consider there to be a risk of conflict.

Assuming no oppositions are filed, or once any oppositions have been dealt with, the registration certificate will issue.

Step 5: Watching

Following registration, it is advisable to set up a trade mark watching service (offered by most firms of trade mark attorneys) to check for any applications filed by third parties for similar or identical marks in the territories of interest, thereby allowing you the opportunity to oppose registration and use of such marks, should you consider there to be a risk of confusion in the marketplace.

There are also companies offering brand monitoring services which can assess how your trade marks are being used by third parties in the marketplace, including on social media sites, and provide warnings of counterfeit and infringing goods and services.

Unregistered Trade Marks

In certain territories, trade marks are protected as a result of their use, regardless of whether they are registered. For example, in the UK, the law of passing off provides businesses with protection over trade marks in which they have acquired goodwill.

However, in order to succeed in challenging a third party using an identical or similar trade mark on the basis of unregistered trade mark rights, it is necessary to provide significant evidence of the existence of these rights, which can be a costly and time consuming exercise.

In contrast, a trade mark registration certificate provides prima facie evidence of the owner’s rights in the trade mark.

Further, whilst it is possible to license or assign unregistered trade marks, third party business parties and, particularly investors, will prefer the security of having an identifiable trade mark registration.

Therefore, unregistered rights should not be relied on in respect of the most important trade marks to a business but can be considered a helpful ‘back up’, particularly for subsidiary brands.

Third Party Marks

Having discussed the protection of a business’ own brands, it is important to touch on the use of third party brands, for example, in business documents or advertising.

As a rule, third party trade marks should not be used without the consent of the trade mark owner. However, where used solely to refer to that trade mark in a descriptive sense, for example, to indicate that you are providing spare parts or accessories, such use will not infringe, providing it is in accordance with honest commercial practices.

It is also permissible to reference a third party’s trade mark in advertisements, to make comparisons between your goods and services and those of the third party. However, in the EU, this ‘comparative advertising’ must comply with set rules. The advert must not be misleading; it must compare material, relevant, verifiable and representative features of the goods and services and the goods and services being compared must also meet the same needs or be intended for the same purpose. Ultimately, the advert must be fair and it must not discredit the competitor or cause confusion.

Joanna Lucas Munce 10 June 2015

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