Trade Mark Case Studies
Case Study: Bad faith trade mark registration of a competitor’s business name
This is an interesting and unusual case study where our client, Brenda (not her real name) had a series of problems caused by the underhand behaviour of a nearby competitor. Ward Trade Marks was called in when the competitor registered Brenda’s business name as a trade mark in bad faith.
The key learning point from this case study is that you need to register your business name and any other trade marks as soon as possible.
Brenda is a hard working mum that in 2012 began an online retail greeting card business called Blue Flower Designs (not the real name).
She sold greeting cards, invitations, prints and similar items, all to her own designs and many products were bespoke/ made to order. The business initially began as a part-time hobby but it quickly became very successful growing to a turnover of c£110,000 and 18,000 customers within a few years.
The key sales channels were eBay, Amazon, Etsy and her own website.
After a time a customer called Jane (again, not her real name) ordered some cards from Brenda over several different occasions. However, Brenda noticed that Jane often made petty complaints over the orders, which were unjustified.
Something about this didn’t feel right so Brenda did some ‘digging around’ and that Jane had her own online business selling cards and was based in a neighbouring county.
Further investigations showed that Jane had been copying Brenda’s card designs for some time and passing them off as her own. She asked Jane to stop this but that didn’t work. Jane continued to cause trouble. She made up fake profiles of people on Facebook and fabricated unfavourable reviews of Brenda’s cards and business. To make the fake profiles look more authentic she had ‘scraped’ the internet for photos of real people living in Australia and used their photos for the fake profiles.
Clearly all of this was very stressful and upsetting but to make matters worse Jane got Brenda’s online shop taken down from Etsy on the basis that Brenda had copied Jane’s designs.
Brenda had had enough so she contacted a local solicitor for advice. Based on the advice given she wrote her own letter to Jane telling her to stop.
On the face of it this worked until Brenda was contacted by one of her regular customers to see if she was now connected to Jane’s business in some way? She was puzzled by the question and the customer told her that Jane owned a registered trade mark in the name Blue Flower Designs.
Now Jane’s business name is not remotely close to Blue Flower Designs and she had no business reason to register the name as a trade mark.
On the face of it the implications of this were huge. Jane could prevent Brenda from trading under her long-standing name Blue Flower Designs. Wielding the trade mark registration Jane could also potentially have had Brenda’s online shops removed from all the market platforms and send a trade mark cease and desist letter alleging trade mark infringement and demanding that Brenda stops using the name on her own website. Brenda’s business was under a serious threat and urgent action was needed.
Following a recommendation Brenda contacted Ward Trade Marks for help.
Our first step was to swiftly apply to register Blue Flower Designs as a trade mark in Brenda’s name. We then applied to cancel Jane’s version of trade mark on the ground of bad faith and the ground of our ‘prior use’ of the trade mark.
Brenda won the case, it was not appealed and Brenda was awarded costs. A very satisfying outcome after an extremely stressful situation that lasted several weeks.
Key learning point
The overriding point here is that all business owners should register their trade marks as soon as possible. The temptation to put the job off for a rainy day is very strong but when it is your business and your livelihood at stake delaying it is not worth the risk.
If Brenda had registered her trade mark in the beginning, and displayed the ® symbol against her name Jane would probably not even have attempted the exercise.
Registering your trade mark really is a modest investment when compared to the thousands of pounds of cost you might face if you find yourself in a situation like this.
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Trade Mark Opposition Case Studies
This section reviews three different trade mark opposition case studies.
Trade mark opposition cases come in two forms. The first is where you are defending your trade mark application against an opponent that has earlier rights and does not want your trade mark application to succeed. The second is where you are opposing a new trade mark application that you do not want to be registered (and/or used) because it would erode your monopoly rights, weaken your registration and be confusing for your customers.
Whichever form, the prospect of going into one of these is enough to strike fear into the mind of most business owners. Why is that? Because without a trade mark attorney to help you, you won’t know if the outcome will be favourable, how long it will take to solve or how much it will all cost.
In reality oppositions are rarely taken through the full process to a tribunal decision at the Intellectual Property Office. Rather it is more normal for them to be resolved through negotiated settlement between the parties, or where one of the parties withdraws from the from the process well before the hearing.
This means that the costs of resolving an opposition will often be comfortably within the budget constraints of small businesses. For certain they will be a great deal less than going through the full process to a hearing.
Our value to you
The value that we bring to you in this process is that we can clearly see where everyone’s strengths and weaknesses lie, and we can exploit them effectively to your advantage. We understand the law and the IPO procedures so can advise you on best strategy and tactics along the way. We are also experienced in negotiating settlements to your best advantage. This means that the fees that you pay us can save you thousands of pounds of direct costs or lost opportunity costs if you try to deal with the situation yourself.
Opposition Example 1 – Protecting our client’s long established brand name
Our client is a long established charity (Est. 1875) that helps girls and young women to fulfil their potential. We registered five trade marks for the organisation and have the portfolio on a watch service.
We were alerted of new application by an organisation that had our client’s house brand wholly contained within the trade mark they had applied for. The application was specified in our core classes of interest.
What was at stake?
Our client risked confusion in the market place because of the presence of a similar trade mark in a very similar area of business. The applicant’s trade mark contained our trade mark and consumers could very easily have been under the impression that the applicant’s business was economically associated, or connected to our client.
We issued a TM7A Notice Of Threatened Opposition (TM7A) and contacted the applicant on our client’s behalf. We requested that they withdraw their trade mark application on the basis that the mark would conflict with our client’s well established rights. The applicant did not withdraw their application so we had no choice but to formally file a trade mark opposition (TM7) against the application.
In the end the applicant did not file a response in defence of their application, so the application was deemed to have been abandoned. Albeit the applicant did not withdraw the trade mark application at the earliest possible point, this was a great result for the client whose rights were not compromised and the overall cost was very modest indeed.
Key Learning Point
Trade mark owners need to police their own trade marks. When you have secured your trade mark you have a very powerful monopoly right in the use of that trade mark registered. To police it properly you need to have a watch service in place. If you don’t police your trade mark and you cede the monopoly by allowing new, identical or similar trade marks to come onto the register over a number of years you weaken your brand, allow confusion in the market and potentially reduce your profitability as other businesses divert trade away from you.
Opposition Example 2 – Defending our client’s application against a FTSE listed PLC
Our client set up her business in 2017 providing role play opportunities for pre-schooler and toddler children. The set up is in the theme of a small city and the children have an interactive play experience through playing various roles for example a firefighter, a hairdresser, a doctor, or a shopkeeper. The mock up city is flat packed and fully mobile so it can be brought to wherever the customer is in the back of a van making it ideal for birthday parties or running events in village halls and community centres.
The business quickly became very popular with events regularly selling out and has been expanded to several locations across East Anglia by opening franchises.
The business uses a highly distinctive and memorable brand logo so trade mark protection was essential. We put in the application, and no prior rights were cited by the examiner at the Intellectual Property Office (IPO) so it was very disappointing for our client to receive a Notice Of Threatened Opposition, form TM7A at a later stage.
The opponent was a global, location based family entertainment provider that holds a large portfolio of trade marks, one of which was alleged to be similar to the trade mark our client applied for.
What was at stake?
The real risk for our client was that she may have to withdraw her application and possibly cease use of the trade mark/ brand name that her business is built upon. This would clearly be very inconvenient and stressful and costly given that a rebranding exercise would be necessary. It would also be very difficult to explain this to existing and prospective franchisees.
We opened up discussions with the firm representing the opponent and both parties agreed to enter a cooling off period to give time to settle the issue. Over the next months we negotiated an acceptable compromise settlement with undertakings so the opponent then withdrew their opposition and our client’s trade mark is now registered.
Key Learning Point
It will be very daunting for an SME to have their trade mark opposed by a FTSE listed company. Conventional wisdom would say that you may as well pack up and go home because ‘they have very deep pockets’ and you do not. However if you have an expert to help you, then a really good result is achievable which saves the day.
Opposition Example 3 – Where refiling a new trade mark was preferable to defending a weak brand
Our client is a well established Essex based business supplying bottled gas, outdoor and indoor gas heaters and outdoor catering equipment all over London and East Anglia. He client filed his own trade mark for a range of generic/ own branded items imported from China for resale. He had not conducted any searches and a few prior rights were brought up in the IPO examiner’s report.
One in particular was very problematic because the trade mark was very similar to our client’s mark for similar goods. This mark was owned by a large heating and boiler making company. Our client decided to carry on with the application but in due course he received a form TM7A Notice Of Threatened Opposition.
When our client received the TM7A he contacted and instructed us to handle the case so we took a look at the problem with an objective eye. The opponent’s mark had one weakness which is that it was rather old (well over five years) and cursory investigations seemed to show that the mark was not in use.
Our client had two options a) simply withdraw the application and refile for a different brand name, or b) investigate the opponent’s use through specialist investigators and if the mark has been unused for a continuous period of five years or more, ‘cancel’ it on the ground of non-use. This latter action would then suspend the opposition pending the outcome of the cancellation action at the IPO. If the cancellation action was successful, the opposition would fall away.
There were two problems with strategy b) above. The first is that it is time consuming and expensive with no guarantee of success. The second and more important point is that the actual mark that our client applied for was borderline descriptive so despite having been accepted by the examiner, the trade mark would have been ‘weak’ and difficult to enforce. There was already a certain amount of descriptive use of this mark in the market place, so if the day came when our client needed to enforce it, he may have lost his trade mark through a cancellation action on the grounds of descriptiveness or being ‘devoid of distinctive character’.
This meant that option a) above, withdrawing the mark and filing a new one was the best strategy, which is what we advised our client to do. This time we helped our client to come up with a more distinctive and memorable product name which we successfully registered it for him.
Key Learning Point
Two key points arise from this. The first is the importance of pre-filing searches. There is no substitute for a professional quality search to tell you what is ‘out there’. The second point is that weak and borderline trade marks are a poor investment in any case. If you have a trade mark attorney on hand from the start she will guide you so that you can choose a trade mark is good enough to register and strong enough to enforce in the market place. Before the final application is filed she can also search the registers for you, interpreting the results with an objective trade mark attorney’s eye so that you are unlikely to have a valid opposition filed against your application.