A trade mark application is not always a good idea...

The issue

It is normally a good idea for businesses to register their trade marks, in order to protect their position if competitors later come along and adopt similar trade marks, whether accidentally or deliberately. However, businesses that file trade marks applications without care or planning may get themselves into unnecessary problems, potentially triggering costly disputes and rebrands at short notice...

How this can arise

The UK and EU Intellectual Property Offices do not refuse trade mark applications due to a risk of conflict with earlier rights (so-called ‘relative grounds for refusal’), they only reject trade mark applications at their own initiative if they breach other regulations (‘absolute grounds’). The UK intellectual property office used to refuse trade mark applications on relative grounds. They still carry out a search, but now they allow trade mark applications even if they identify earlier relevant trade mark rights and, unless the objection is addressed, for example by modifying the application, the IPO write to the proprietors of those earlier rights to see if they wish to oppose the new trade mark application. Furthermore, regular users of the trade mark system may have a watch in place to flag new applications to enable them to decide whether to object (this is a service we provide). What this means is that if you file a trade mark application, you may draw your application – and so your use of the mark – to the attention of the holders of earlier trade mark rights. They may, perfectly reasonably, not only object to your registration of your mark but to your use of it. As a result, we regularly hear tales of businesses who have filed a trade mark application thinking this would protect their rights, but have instead ended up being forced to stop their use of a trade mark in a short timescale just as their business was developing.

The risks are highest for businesses who are already using a trade mark and are heavily committed to it. They may incur substantial costs in having to rebrand, as well as legal costs – and potentially even damages for trade mark infringement. Businesses that have not yet started to use their trade mark may also be disrupted by disputes that arise as a result of trade mark applications but they are more likely to be able to rebrand without substantial cost. Another common situation is that a business is trading without problems in one market, or one geography, but they face difficulties when they register their mark for new goods or services, or in new countries, but they still feel compelled to rebrand globally due to a need to use consistent branding.

Reducing risk

How this can be avoided? The first strategy is to carry out at least some trade mark searching before filing a trade mark application. It is fairly well understood that trade mark searches should be carried out before adopting a new trade mark, to reduce the risk of infringing third party rights, but searching can be useful before starting trade mark filing programs even for businesses that have been trading without legal difficulties to date. If a search finds problems, there are several things which can be done about it.

First, it can be checked whether the earlier conflicting rights are likely to be enforced against the new trade mark use. An earlier trade mark registration may be vulnerable to cancellation for non-use if the earlier mark has not been used for a sufficient period of time (5 years in the UK and EU). If the proprietor of an earlier conflicting mark is not using their mark, perhaps because they have discontinued a product, this might suggest that they are less likely to oppose your use. Occasionally you will find the holder of the earlier mark doesn’t exist any more. Secondly, it is possible to contact the proprietors of earlier rights to ask permission to use their mark, or to pay for a licence, or even to buy their registrations - if they aren’t using them any more then getting some money for an otherwise worthless IP right may be attractive. Another option is to revise your planned use of the mark, for example, to change the mark or add additional graphical or word items to it to take your mark further away from those of others and so reduce the risk of a dispute in practice.

If you are aware of a risk of triggering a dispute, then you might also file a trade mark application with a limited specification of goods and services. The limited specification could be chosen partially to avoid treading on the toes of others and partially to communicate what you are planning to sell with the idea that when the holder of an earlier trade mark registration decides whether to assert their rights, they may be less likely to do so if they are aware that you are only interested in a narrow range of products which do not compete with them in practice. This is not always successful but applicants who instead file for very broad trade mark protection will find that they are much more likely to trigger disputes.

Of course, if there is a risk of triggering a dispute you may well conclude that you are currently infringing a trade mark registration belonging to another, it is simply that they have not noticed, or not felt inclined to write to you as yet. In this case, you run the risk of being forced to stop your use of the mark and you may be incurring an ever increasing liability for damages or an account of profits for trade mark infringement. You may be in a situation where the option of asking an earlier trade mark holder for consent or a licence is too risky to even consider because an approach could lead to receiving a legal letter by return. In this situation you may wish to double check that the risk is real and, if it is, plan to carry out a rebrand while you can do so on your own terms.

There are still more complex circumstances that can arise, for example if you already have some rights. The UK and some EU countries allow some rights for unregistered marks in specific circumstances. In these cases, it is important to think carefully before deciding on a trade mark filing strategy. Sometimes you will find that several businesses are using conflicting rights which requires careful analysis.

The risks of problems arising vary between market segments. In some fields, the trade mark register is very cluttered and there is a high likelihood of stepping on the toes of others. In other industries there are few registrations and disputes are relatively rare.

When should you file an application?

When should you file for trade mark protection to avoid these issues? You might file for trade mark protection sufficiently long before you need to use the mark so that you can proceed through the trade mark application process to achieve registrations in key countries before you actually launch. If third parties adopt conflicting marks at a later date, then the earlier your filing date, the more likely you are to be in a strong position. If any oppositions or disputes arise, you will still have the option of rebranding if you are not yet committed to your mark. However, you should not apply so very early that you run the risk of your registration becoming vulnerable to cancellation for non-use and, of course, no business likes to incur costs any earlier than it needs to.

To minimise the likelihood that filing a trade mark application creates rather than solves problems, take time to think first, ideally file before you are committed to the mark, and take advice from a Chartered Trade Mark Attorney. Once your business has a valid trade mark registration covering your activities you have a useful and potentially valuable asset, but the trade mark application process is not straightforward and naïve applicants who file trade mark applications without care, or with excessive breadth, may well run into problems that could have been avoided with more care and knowledge.

If you would like to seek advice on trade mark filing strategy, please do not hesitate to contact us.