The importance of ™ protection for new and established businesses

Importance of TM Protection for New & Established Business25th October 2012

Allister McManus

Background to Venture Proof

What does VP do? • Help investors, businesses, entrepreneurs & start-ups protect their ideas &

products.• VP has qualified Patent & Trade Mark Attorneys to give you advice.• VP offers a full range of services – from initial searches & advice right through

to preparing & filing applications, prosecution of those applications & post registration maintenance.

• VP offers a number of fixed-price due diligence packages to check whether you are free to protect and use your name or product.

Law Graduate Masters in IP Member of ITMA Registered TM Attorney

My Background

Introduction/background to Trade Marks (TMs)What is a TM?

A TM can be • Words• Logos • Slogans/strap lines • Shapes – product packaging • Characters, jingles, colours

Introduction/background to Trade Marks (TMs)What does a TM do?

Essential function: • Gives consumers a guarantee of identification of a marked product or

service.• Helps distinguish from other products/services• Badge of origin & guarantee of consistency • Implied assurance of quality• Sign to consumer that goods come from certain source & TM owner is

responsible for goods & their quality.• Good example: Apple – we all want the new iPhone 5!

Introduction/background to Trade Marks (TMs)What should you protect?

Choosing a TM depends on the functions it must fulfil: • Distinctive TMs = indispensable tools for identification of goods/services• Advertising & image is increasingly important. Power of a TM to act as a sign

guaranteeing source & quality is increasingly vital to business. • Brand names = invaluable marketing tools. • Many businesses invest significantly in development, marketing & protection

of brands.• Can represent other appealing values or qualities: Aspirational associations of

high end fashion & technology brands.

Introduction/background to Trade Marks (TMs)How long does it last?

• Potentially forever: Initial 10 years renewable indefinitely.• First UK TM to be registered – BASS beer triangle – 1876• Still in force – 136 years!• Class 32: Pale ale• Filed: 01 January 1876• Renewed: 1 November 2011• Next renewal date: 01 January 2022

Introduction/background to Trade Marks (TMs)TMs as a company asset

• TM = property & can be assigned, licensed & sold.• An intangible asset with monetary value - add it to your books & it can increase

your value. • Gives investors & future buyers confidence of a protected & enforceable asset.• Coca-Cola: The name is more important that the physical assets – factories etc.• Successful brand owners know brands can add value to the business & as intangible

assets can represent a high proportion of overall business value.

Introduction/background to Trade Marks (TMs)Brand value - BrandZ

• BrandZ website tracks monetary value of brands as intangible assets - 5 yearly

valuation ranking top 100 brands.• 2012: Top 100 brands total $2.04 trillion in brand value - 5 year growth of 40% from

$1.45 trillion.• BlackBerry not in Top 100 5 years ago, now at #14, with annual growth of 107% &

value $30.7 billion.• Amazon up 63 places #78 to #15: A 46 % growth to $27.5 billion.• Apple, now #3, value of $83.2 billion, up 26 places from #29: 51 % growth.• Google now #1 brand with value of $114.3 billion - 32 % annual growth rate since

2006 (#7 with value of $37.4 billion).

Introduction/background to Trade Marks (TMs)Brand value - BrandZ

Introduction/background to Trade Marks (TMs)Why should I register my company or product name?

• UK traders can rely on unregistered common law rights - Passing-Off.• But: New traders may not be able to stop an identical/similar TM Registration by a 3rd

party – not enough trading goodwill. • Show convincing evidence that you have enough customers who recognise brand

throughout UK – difficult if trading locally or in certain parts of UK.

Real case story: • Competitor registered a TM 4 months after client started using same name. Nothing

client could do – 4 months not long enough to show goodwill.• UK RTM covers whole UK – Passing Off only goes as far as where you are trading. • Registering a TM doesn’t get rid of common law rights - still develop goodwill & pursue

passing-off. • You have registered & unregistered rights that compliment each other in certain ways.

Introduction/background to Trade Marks (TMs)A few common misconceptions

• Searching Companies House does not mean you are OK to use a name. • CH does not include TM Registers. Only gives some indication of unregistered rights. • Proper search of TM registers is vital, particularly for infringement reasons.• Searching Google does not guarantee you are free to use a name. Google useful to

limited degree for checking unregistered rights. • TM owner may have just registered a name & not started trading yet, but could still

enforce the RTM against you.

Due Diligence/Clearance searching & review of your TM…

• Law on comparing TMs = complex & continually changing.• TM attorneys know the law & have experience in analysing searches.• You may have already selected a name but we may find existing problematic TMs.• Advice on goods/services you can cover after the search, or if you should re-brand.• Advise whether any companies with unregistered rights could still object.• A problematic TM is not always the end of the line…find a way around this.• Advise if your TM is actually registrable i.e. is it highly distinctive, too descriptive or

just on the right side of distinctive - knowledge of complex case law.• The sooner a search is carried out the better!

Why should I use a professional?Benefits of using a TM Attorney


Filing & progressing your application - Exam Reports & Oppositions…

• Help you respond to & overcome Examination objections.• Even after careful searching, someone may still oppose. TM attorneys can defend

oppositions or negotiate a settlement for co-existence.

Infringement…

• Searching not just about registering, but also checking if you can use a TM. • Using a similar/identical TM to a Registered TM = infringement & TM owner may

pursue proceedings • Damages, legal costs & court orders. • Advise you if there is a risk of infringement.• Defend you from claims of infringement• Pursue claims of infringement for you.


Post registration brand maintenance …

• Look after your TM to ensure no 3rd parties register confusingly similar names.• Watching service. • Stop counterfeiting of your products & develop strategies.• Maintain strong brand - ensure it does not become generic – e.g. Escalator, Shredded

Wheat.• License to ensure proper use so your TM strength not diluted. • Maintain deadlines & renewals. Ensure all renewal dates monitored & inform you.• Create & follow brand guidelines to ensure you & your licensees/franchisees use TMs

correctly.• Ensure any update or change to your brand is protected or existing rights may be

invalid.


Worldwide Protection…

• Network and access to TM attorneys around the world - cover any country in the world for you.

• Knowledge of individual TM laws around the world.• Protect & expand your portfolio.

Real case example of the benefits of Due Diligence…

• Client supplying major UK retailer with a product did no searching.• UK retailer’s IP dept. found information questioning if product infringed 3rd party rights. • Product already on the water & the UK Retailer threatened to pull it by the following Monday 9AM

unless client could provide evidence that it was safe to sell product.• Client instructed VP who worked quickly to carry out full due diligence report in time. • UK Retailer was satisfied & client saved tens of thousands of £.• Client now carries out preliminary searching in the early stages of any product design.

Why should I use a professional?Media case examples of the pitfalls of not having proper TM protection & Due Diligence

Apple IPAD issue…

• Major legal battle in China over use of Apple’s lucrative `IPAD` brand. • Apple entered into what it thought was an authorised assignment of the TM IPAD from a Chinese

company who owned the rights in China. Global launch of IPAD began in Jan 2010.• Later emerged that company who signed the assignment was one of 2 subsidiaries of same parent

company who since Feb 2010 are pursuing Apple for infringement in China, claiming Apple does not own rights for IPAD in China.

• Chinese Court in Dec 2011 held that the parent company is the rightful owner of IPAD TMs & the company who originally assigned IPAD TMs to Apple had no right to do so.

• Chinese co has so far succeeded in infringement claims against Apple’s distributors in Shanghai.• Request with China Customs authorities has been filed & if successful Apple’s iPads will be seized.• Feb 2012, online retailers in China such as Amazon have stopped selling iPads in China. • Speculated that settlement will be reached – but at what cost to Apple?• Even Apple occasionally has issues with due diligence!


Michael Jordan `Qiaodan`…

• Chinese translation of Jordan is 'Qiaodan' (乔丹 ) - Jordan known as Qiaodan in China since 1980s.• 1993 - Nike registered TM `JORDAN` in China. Didn’t register `Qiaodan`.• Qiaodan Sports Co Ltd is a Chinese sportswear & footwear manufacturer & In 1998 successfully

registered QIAODAN & 乔丹 in China & registered domain name. • Qiaodan has tried to register TMs in English & Chinese for 'Michael Jordan' & his jersey no. • Jordan now engaged in legal battle with Qiaodan to try & stop them selling products under

QIAODAN in China. • Jordan has an uphill struggle - under Chinese law he can’t cancel the Qiaodan TMs - in use for 10

years. • Has to rely on his `personal name` rights & show Qiaodan acted in bad faith & use of his name

damages him by causing confusion among consumers.• Survey found 90% of young people in China’s small cities believe Qiaodan is Jordan’s own brand.• Qiaodan profited heavily from confusion: $45.6 million in 2007 to $456.3 million in 2010.• Qiaodan claim they are doing nothing wrong & there is no confusion or connection!


The lessons from Apple and Jordan…

• TM registrations in many jurisdictions based on `first to file` principle. • Even if TM products only manufactured & not sold in China, consider searching & filing

applications `defensively` to prevent sabotage by 3rd parties registering TMs in bad faith.

• If Jordan & Nike had registered Chinese translation of his name in 1993 - issue may have been avoidable.

• Apple - Carry out enough due diligence before signing TM assignments – make sure assignor is registered owner.

How effective are Registered Trade Mark Rights?Media case example of using RTM rights to stop misuse of your brand

Asda v Specsavers…

• Asda sailed too close to the wind in 2009 with launch of advertising campaign for optician services poking fun at spec savers by using the following:

“Be a real spec saver at Asda”“Spec savings at Asda”

• Asda also used a similar double circular logo to Specsavers:

• Asda tried to be as careful as possible to avoid obvious confusion/infringement of Specsavers’ TM rights. Wanted to sail as close to the wind as possible but stay on right side of the law.

• Specsavers still managed to take successful injunctive action against Asda - Court found Asda’s use of both straplines infringed Specsavers’ word mark & Specsavers logos & Asda logo infringed Specsavers logos when used as part of the advertising campaign.

Tips to take away from this talkAvoid the TM issues discussed today

• Searches prior to use of a name or ASAP after using it.• Register TMs in all territories you trade in & plan to trade in before someone else does!• Monitor your brand portfolio. • Look after your brand – enforce it, license it, strategise & expand. • End up on the BrandZ top 100!• Due diligence before entering into a binding agreement or commercial transaction

affecting your TMs.

Thank you for listening!