The great trademark swindle
With the cost of registering a trademark coming in at a £200 fee payable to the UKIPO, plus professional fees payable to a trademark agent typically exceeding £2,000 plus VAT, it could be argued that the whole area of law is nothing more than a form of legal alchemy; literally, a licence to print money, both for the lawyers and agents who charge for advice and expertise, and for the UK Intellectual Property Office (UKIPO), who collect the registration fees.
The watchdogs of the law, the UKIPO, have the power to refuse a trademark application, which they would formerly do on the basis that a similar attempt at registration might commercially conflict with an existing trademark. The theory therefore was that, if someone tried to register a mark that might draw business away from you, it would be turned down, and if a sufficiently similar trademark slipped through, you could raise a civil action through the courts to enforce your protection.
Even this potted protection offered very little to a threatened business identity. The registration of a trademark in itself does not prevent its use elsewhere by a third party, and if the offender does not voluntarily desist, prior registration offers little practical help.
The Drum speaks from experience. Its sister publication Prospect runs the “The Carbuncle Awards”, an ironic appraisal of architectural folly, and this name is a protected trademark. Except it isn’t. Earlier this year, CMP Information Limited – publishers of Building Design weekly – subsequently created its own “Carbuncle Cup”, with essentially the same purpose, and having raised this politely with the infringers, were told in unambiguous terms by their solicitors, Mishcon de Reya, to bugger off.
“Your clients would need to show a likelihood of confusion on the part of the relevant public,” they said. “The relevant public must be confused to believe that our client’s competition is connected with your clients. That is a fanciful assertion.” Fanciful indeed. Imagine anyone confusing The Carbuncle Awards with the Carbuncle Cup. Pardon us.
If the opposing name is not in itself registered, there is nothing to stop the offender continuing in business short of an injunction, which is highly unlikely to be granted, given that the legal maxim of de minimis non curat lex applies. “The law does not concern itself with trifles.”
Even if a later applicant tries to proceed with their registration of a duplicate trademark, since the law changed on 1 October, the UKIPO will not prevent registration. They will merely inform the prior right holder that he might want to initiate a dispute.
“We operate a notification system,” a spokesman for the UKIPO told The Drum.
“We would notify the applicant that there is something similar on the register. They then make a decision if they wish to proceed. If they do, we would contact the earlier right holder, and tell them someone has applied and tell them they may wish to oppose. If they feel it is similar to their trademark they would file opposition against it.”
The UKIPO then operates as an adjudicator in a quasi-judicial context, but without the legal status of a court. Most prior right holders would presumably prefer the greater weight of raising actual court proceedings, which returns us to the initial question. Is there any point in registering a trademark at all?
Iain G. Mitchell QC is a specialist in trademark law, having raised and won cases in the House of Lords, and in his view, because trademark law is so uncertain, the common law remedy of ‘passing off’ –in other words a straightforward court action based on a more general sense of product confusion’- may be equally, if not more, reliable.
“Trademark protection is necessarily limited to – quite specifically – the application of a trademark. There is a broader common law remedy of passing off, which has both the advantage and the disadvantage of not being predictable,” he says.
“These factors all mean that, though the remedy of passing off is reasonably flexible, and the court can take a sensible view in any particular case, it can be very difficult in any given case to predict which way the Court will jump.”
Mitchell argues that the holder of a trademark is only protected in cases where an infringer attempts to exactly duplicate your product; a scenario which applies more to counterfeiters, rather than similar sounding business names or concepts. In short, if it is not a fraudulent impersonation of your product, you may be out of luck. Mitchell explains.
“The particular benefit of a trademark is not so much in the normal competitive environment – more as a remedy against somebody who is frankly ripping you off,” he says.
“A counterfeiter who uses your trademark is definitely infringing it; but in the world in which businesses tend to be reasonably well advised, it can easily come to a situation where a competitor sails very close to the wind without actually needing to infringe any of your trademarks. So there is a question as to how valuable the trademark is.
“It does have some
value, plainly, but it may well be that your broader remedy based on passing off, would have a better chance of success. The question then is whether, as a commercial decision, it is worth paying the money to go through the whole trademarking process to get that extra degree of protection.”
Scott Kerr, head of corporate law at Semple Fraser solicitors agrees that trademark protection is limited to cases where the infringement is an exact match, rather than a confusingly similar facsimile, and this distinction is enshrined in the applicable UK law, the Trade marks Act of 1994
“The statutory definition of infringement of a registered trademark covers the situation where the trademarks being used are identical, and are being used in the course of trade in relation to goods or services similar to those for which the trademark in question is registered,” he says.
The key point from the Act, he says, is “where there exists a likelihood of confusion on the part of the public,” and it is this nebulous notion, formerly interpreted by the UKIPO, which has been revised. They have narrowed their role to simple notification, and if an applicant opts for adjudication, they will apply an “absolute” test, to establish if the original registration is “distinctive and fitting”. As Mitchell explains, the process is fairly straightforward in cases of like for like copying. The black and white very quickly gets grey in every other instance.
“A trademark protection is a deep protection, but it is a narrow one. If someone is definitely infringing your trademark, you have them banged to rights,” he says.
“The common law equivalent of passing off is a shallow, but broad one – it covers a lot more potentially unfair competitive behaviour, but you may have to work harder to prove your entitlement to the protection,”
Against the fairly rigid criteria required to obtain valuable trademark protection, coupled with the narrow interpretation, the whole process has questionable value. In 2005, the last year for which figures are available, the UKIPO registered 17,626 trademarks at £200.00 each, bringing in some £3,525,200 in revenue. It is debatable whether any of this money has bought legitimate protection, if in the event of a dispute you may have more success incurring the costs of a court dispute.