Power of Trade Marks

‘Trade marks are often considered to be the most powerful of all intellectual property rights’. Discuss.

The main purpose and function of a trade mark is to provide consumers with a way of distinguishing between the goods and services from one trader to that of another. It allows consumers to recognise a product and certain attributes or qualities which the public can relate to certain products and services, which give the assurance that their requirements of quality and taste will be met. A trade mark may be words, logos, the shape of products or their packaging, the colour used to promote goods and services, or a musical composition used in advertising. As long as the trade mark is capable of distinguishing a business from other traders or actually does distinguish a business from other traders (either purely of its own right or through use over the years) then the trade mark acts as a highlighter for a certain company and is may be protected. A trade mark must be distinctive for the goods and services it provides. Section 1(1) of the Trade Marks Act 1994 defines a trade mark as ‘any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings’. It includes ‘words (such as personal names), designs, letters, numeral or the shape of goods and their packaging.’ Most countries exclude certain terms and symbols from being registered as trade marks. These include emblems, flags, royal insignia, and the rings of the Olympic Games. In addition, marks that are deceptive as to the country of the product’s origin and obscene marks are not registered. Trade marks are registered in one or more of forty-five classes.

There are thirty-four classes of goods and eleven for services. These classes group products that are deemed to be similar in function, and are identified by their number. The life of a registered trade mark is ten years from the date of registration, unless it is renewed. If properly managed and administered the duration of a registered trade mark may last forever. However, if a trade mark owner fails to renew a trade mark on time, it may be removed from the Register. It is up to the owner of the trademark to ensure that it is appropriately renewed. The Trade Marks Act 1994, as amended, is the current law that covers the registration of trade marks and the protection of registered trade marks in the UK. The registration of trade marks in the UK is achieved through the UK Intellectual Property Office. If registration is accepted by the UKIPO, a number of exclusive rights are bestowed upon the trade mark owner. These rights allow the owner to prevent unauthorised use of their trade mark on products that are identical or similar to the registered mark.

In 1862 the Merchandise Marks Act made it a criminal offence to imitate another’s trade mark ‘with intent to defraud or to enable another to defraud’ [1] . In 1875 the Trade Marks Registration Act was passed which allowed formal registration of trade marks at the UK Patent Office for the first time. Registration was considered to comprise prima facie evidence of ownership of a trade mark and registration of trade marks began on 1 January 1876. The 1875 Act defined a trade mark that may be registered as ‘a device, or mark, or name of an individual or firm printed in some particular and distinctive manner; or a written signature or copy of a written signature of an individual or firm, or a distinctive label or ticket’. However, any word or name that was in use as a trade mark before the passing of the Act was entitled to registration, whether or not the mark fulfilled these criteria.

In 1883 the Patents and Trade Marks Act substantially revised trade mark law, reducing the cost of application, and included the facility to register ‘fancy words not in common use’ and ‘brands’ [2] as new marks for the first time. Further major trade mark acts were passed in 1888 and 1905 which both further refined definitions of a trade mark, there were amendments in 1919 and 1938, the last of which was in force until the 1994 Act was passed.

The current UK Trade Mark legislation is the Trade Marks Act 1994, which implements the European Trade Marks Directive into national law. The UK Intellectual Property Office radically altered the way UK national trade mark applications were examined in October 2007. Previously, UK national trade mark applications underwent a full examination both on absolute (distinctiveness) and relative (prior rights) grounds. In 2007, the search which formed a part of the examination of applications on prior rights grounds became an advisory search in a similar fashion to the Community Trade Mark system, bringing into force Section 8 of the Trade Marks Act 1994. This means that a trademark cannot fail to be passed on the basis of an earlier pending application or prior registration for a conflicting mark. Instead, it will be up to the proprietor of that right to oppose the application when it advertised for opposition purposes, although the UKIPO will still advise owners of conflicting application where citations including their marks have been sent to the applicant to assist them in making an opposition [3] .

Absolute grounds for refusal of registration include trade marks which are devoid of distinctive character, trademarks which indicate kind, quality, quantity, intended purpose, value, geographical origin or trade marks which have become generic.

Relative grounds include where there are earlier identical marks for identical goods, where there are similar marks for similar goods and “there exists a likelihood of confusion on the part of the public which includes the likelihood of association with the earlier trade mark” [4] , where an earlier identical or similar mark has a reputation in the UK (anti-dilution provision) in order to prevent consumers becoming confused with products that are similar and expecting a level of quality that perhaps is not present.

Earlier rights can also cause problems with the registering of trade marks. If there is an earlier registered trade mark, or earlier unregistered trade mark such as a mark that could be protected by passing off or earlier rights that are liable to be protected by copyright, design right or registered design. Article 12(1) of the trade marks Directive states ‘A trade mark shall be liable to revocation if, within a continuous period of five years, it has not been put to genuine use in the Member State in connection with the goods or services in respect of which it is registered, and there are no proper reasons for non-use’ [5] . It is also difficult to register a trade mark if the mark has become generic or descriptive in nature.

Registration grants the registered proprietor the ‘exclusive rights in the trade mark which are infringed by the use of the trade mark in the UK without his consent’ under section 9(1) of the Trade Marks Act 1994. Registration grants a statutory monopoly to use of the mark. This means that the registered proprietor can use the registration to prevent others from using the same or similar mark on the same or similar goods or services. Trade marks may not be registered if they describe the goods or services or any characteristics of them or are at all descriptive in nature. Such as marks which show the quality, quantity, purpose, value or geographical origin of the goods or services in question; or have become customary in the line of trade in question, are not distinctive, are three dimensional shapes, are specially protected emblems (most jurisdictions may specially exclude certain designs, such as emblems, mentioned above), are offensive, are against the law (like promoting illegal substances or activities), or are deceptive (there should be nothing in the mark which would lead the public to think that the goods and services have a quality which they do not).

Infringement is the illegal use of a registered trade mark. Infringement takes place when someone uses a sign which is the same or similar to another registered trade mark for identical or similar goods or services; and the public are likely to confuse the two marks. Section 10(1) of the Trade Marks Act 1994 states that ‘a person infringes a registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered’. A person may also infringe a registered trade mark where the sign is similar and the goods or services are similar to those for which the mark is registered and there is a likelihood of confusion on the part of the public as a result (section 10(2)).

Under section 10(6) it is lawful for a competitor to use the trade mark of a registered proprietor ‘for the purpose of identifying goods or services as those of the proprietor’ or his licensee, provided it is ‘in accordance with honest practices in industrial and commercial matters’. This provision is designed to allow competitors to use the trade mark of another for the purposes of comparative advertisement. However, the use of such trade marks must be fair. The question of when a use of another’s trade mark is fair has been visited by the courts a number of times since the passing of the Trade Marks Act in 1994. An important case in this context is Barclays Bank v RBS Advanta [1996] [6] where Laddie J concluded that a plaintiff could not succeed simply by showing that the defendant was taking ‘unfair advantage’ of the trade mark. He needed to show that there was ‘material dishonesty’ before he could succeed in establishing that there had been ‘unfair’ use. Subsequent cases have given rise to the objective standard of the reasonable consumer to ascertain whether a use is ‘material dishonesty’ and therefore unfair.

A person also infringes a registered trade mark where a sign is identical but the goods are dissimilar if the trade mark has a reputation in the UK and its use takes unfair advantage of, or is detrimental to, the mark’s distinctive character or reputation (section 10(3)). Trade marks, or more precisely the goodwill associated with the business conducted under the trade mark, is protected via the Common Law Tort of ‘Passing Off’. If an organisation can prove that it has established, via the use of the trademark, Goodwill in the business associated with that trademark, then this goodwill is protected with the trade mark. Goodwill is essentially a reputation in the mark. Therefore, if another trader ‘passes off’ his goods or services as being a third party’s and misrepresents in some way, either deliberately or innocently, that his goods and services are theirs or they are in some way connected to him or they have endorsed his goods and services, then if the original trademark owner can show that they have or are likely to suffer damage as a result of such use, they will have a remedy in passing off. Unregistered trademarks should be displayed with the ™ symbol to put ‘the world on notice’ that goodwill is associated with the trademark and that the trademark is owned.

Goodwill is what brings to a business repeat orders and new business. Existing customers know the businesses name and refer it to others, some of the biggest are ‘coca-cola’ and ‘mcdonalds’. Goodwill is a type of intangible intellectual property which attracts and retains customers. Where the goods, which generate goodwill, are sold under a trade mark, the trade mark and the goodwill become inextricably linked.

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Traditionally, one of the problems with the trade marks registration system is that it is territorial. Registering your trade mark in the UK does not protect it abroad. If you want to register your mark in countries other than or as well as the United Kingdom, you can protect it in more than one country using a single application. You can do this through two different routes. The first involves applying for a European Community trade mark with the Office for Harmonisation in the Internal Market (Trade Marks and Designs). The European Community trade mark gives protection in all European Union countries. You can apply to register your trade mark in countries which have signed the Madrid Protocol through the World Intellectual Property Organisation.

A registered trade mark can potentially last forever therefore it is a very strong form of intellectual property. However, the trade mark monopoly is limited in scope meaning that you can only register your trade mark for the goods and services for which you use it. It does produce an Evidential Presumption in Court that the registered owner is, in fact, the owner and that the trademark is, as a matter of law, a trade mark. This make the trade mark one of the most important selection of intellectual property law, and provides a legal right to take action against anyone who uses a trade mark without the owner’s permission. Its also allows Trading Standards Officers or the Police to bring criminal charges against counterfeiters if they use the trademark in question. A trade mark is Property in itself which means it can be sold, mortgaged, lent and licensed.

Trade Marks play a fundamental role in protecting business names, product names and the names attributed to services by business. In the event that another business copies a trading name, the original business is left only with rights granted by the law of passing off, which generally requires substantial evidence of trading activity and extensive marketing, in order to overcome the threshold requirements for goodwill and reputation, which in essence is what the tort of passing off protects.

As trade marks represent the unique identity of a business, product or service, trade marks should form a central part to preserving brand identity of capital investment in promoting the business. Supposing two identical businesses that have been trading successfully for a number of years, and one has a registered trade mark and the other does not. If each of these businesses is the victim of another business copying their trading name, the business with a trade mark will almost invariably be in a superior position to protect the exclusivity of its trading presence. In effect, it may be the difference between not being in a position to protect their brand presence due to the more onerous evidential requirements required by making out a case for passing off.

http://www.trademark.eu/

http://www.ipo.gov.uk/tm.htm

Roger D. Blair,. Thomas F. Cotter, Intellectual Property; economic and legal dimensions of rights and remedies, 2005, Cambridge university press, Cambridge,

Mark Van Hoorebeek, Intellectual Property Law, 2009, Nutshells, 3rd edition, sweet and Maxwell, London

David I. Bainbridge, Intellectual Property, 2009, Pearson Education Limited, 7th edition, Essex