Trade mark disputes are like snowflakes in that no two are ever identical (and the relationship between the parties can be frosty!). This can make it unrealistic for a smaller business to be fully prepared for every possible scenario but even a little bit of anticipation and strategic forethought can nevertheless be of great value. As the three alternative reality scenarios shown below demonstrate, making sure that your trade marks are protected effectively at an early stage is a key part of this.

Common background

Amanda is the owner of an SME which offers an innovative SaaS service.  The service is proving to be popular and the client base is growing exponentially.  There are plans to offer related services in the future but, for now, this is the only revenue stream for the SME.

A large third party business then launches a directly competing SaaS service under a very similar brand name but using a very different logo.  It also files corresponding applications to protect its brand as registered trade marks.

The third party’s entry into the market and large advertising budget rapidly start to take market share away from the SME and the impact on the bottom line threatens to put the SME out of business altogether.

What do you do now?

Scenario A

Amanda had heard from a friend that the world of trade marks is complex and that it is worth seeking professional advice.  So she had approached a trade mark attorney to help her protect her brand a year before.  The trade mark attorney had advised her to file trade mark applications for both the name and the logo of the SaaS service and had also written a detailed specification of services in the appropriate classes.  During examination, the UK IP Office had initially asked for some of the key services to be deleted from the application but the trade mark attorney was able to argue against this.  The name and the logo of the SaaS service were subsequently protected as registered trade marks for all of the services applied for.

When the third party issue arises, Amanda informed the trade mark attorney who then wrote a simple cease and desist letter informing the third party of the SME’s rights and demanding that it rebrand its competing service and withdraw its trade mark applications.

Due to the strength of the SME’s case, the third party complied with the demands without the need for any court proceedings.

The total cost for protecting and enforcing the trade marks was roughly £3,000-4,000 and the third party was successfully forced to rebrand.

Scenario B

Amanda had considered taking professional advice but had been put off by the upfront cost and had decided to file the trade mark application herself.  She filed for the logo only and for a limited specification of services so as to keep costs down.  During examination of the application, she received an objection from the UK IP Office and deleted some services from the application at the examiner’s suggestion.

When the third party issue arises, Amanda seeks professional advice but is told that she is not in a strong position as her trade mark registration for the logo does not cover the key services and there are obvious and clear differences between the parties’ respective logos.

As Amanda’s case is weak, the cease and desist letter does not have the desired affect and the third party refuses to rebrand.  She is forced to bring court proceedings for trade mark infringement and passing off.

Eventually the parties reach a co-existence agreement but the third party is able to continue use of its brand and the SME continues to lose market share.

The total cost for protecting and enforcing the trade marks was roughly £15,000-20,000 and the third party was not forced to rebrand.

Scenario C

Amanda was put off by the upfront cost of using a trade mark attorney and had also decided that trade mark protection was not needed for a company of her size.  In any event, she had a company name registration and a domain name which corresponded to the SaaS service and that would be good enough, right?

When the third party issue arises, Amanda seeks professional advice but is told that company name registrations and domain names do not give any exclusive right to the name and she is in a very weak position to take action to stop the third party.

The third party refuses to rebrand and the SME is forced to bring court proceedings for passing off.  It loses the case and has to pay a significant proportion of the third party’s legal costs as a result.

The third party then alleges that the SME’s continued use of its SaaS service name and logo might infringe their trade mark registrations.  The SME is forced to rebrand as its market share is constantly being whittled away and it has been ring-fenced by the third party’s trade marks.

The total cost for trying to protect the brand was roughly £30,000-35,000 (including the third party’s legal fees) and eventually it was the SME itself that was forced to rebrand.

Conclusion

The difference between these three scenarios is stark but it was Amanda’s small decision at the outset to obtain robust registered trade mark protection for the brand that was the critical factor in how the dispute played out.

The upfront cost of making sure that the trade marks were protected properly was repaid many times over.

Author:

Andrew Clemson

Senior Associate
Share this post