Using the ® Symbol in Countries Where it is Unregistered

In the UK, the Trade Marks Act 1994 makes it an offence to falsely represent a trademark as registered.

95 - Falsely representing trade mark as registered

(1) It is an offence for a person—

(a) falsely to represent that a mark is a registered trade mark, or

(b) to make a false representation as to the goods or services for which a trade mark is registered knowing or having reason to believe that the representation is false.

The ® symbol is used widely as a warning sign to others that the trademark is registered. There is generally no legal requirement for proprietors to use these symbols to indicate the mark is registered. Despite this, criminal liability does exist for anyone who uses any word or symbol to suggest a mark is registered and it is not.

As a result of the ever increasing globalisation of the market two problems may arise. Firstly, how does the United Kingdom treat those goods with ® marks which relate to overseas registration, but not a UK one? Secondly, how would a UK product with an ® symbol relating to a UK registration avoid trouble in an international market, in particular in the European Community?

In terms of the first scenario, section 95(2) (b) of the Act does lay out some guidance in which proprietors may follow.

(2)For the purposes of this section, the use in the United Kingdom in relation to a trade mark—

(b) of any other word or symbol importing a reference (express or implied) to registration,

shall be deemed to be a representation as to registration under this Act unless it is shown that the reference is to registration elsewhere than in the United Kingdom and that the trade mark is in fact so registered for the goods or services in question.

In practice, if an international product was sold within the UK bearing an ® symbol for the international registration but did not have a UK registration, it would be in breach of s.95. However, if there is some indication that the ® actually refers to its international registration part (2)(b) allows for this. Such indication may include, for example, “trademark registered in France under registration number...” within the product's accompanying literature.

The rules become more complicated when UK entities wish to export goods with only UK registration overseas. In order to be sure, the proprietor would need to consult the registration laws in each territory they wish to trade in. For the purpose of this article, the EU will be the main focus.

Historically, in the EU trademarks were thought to impede the free movement of goods, freedom to provide services and distort competition within the Common Market. The EC Trade Mark Directive tried to harmonise the general conditions for obtaining and continuing to hold a registered trademark. However, member states have the discretion to decide whether or not to adopt certain rules of the Directive e.g. which of the optional grounds for refusing a registration or declaring a mark invalid. The use of the ® symbol in the European Union is not explicitly regulated by trademark legislation i.e. there is no s.95 equivalent. Despite this, it is worth noting other EC incentives that may be affected by the use of the symbol.

In general, Directive 85/450/EEC (Sept 1984) and Directive 2006/114EC (Dec 2006) deal with misleading advertising. Arguably, the incorrect use of ® could constitute as misleading advertising. The intellectual property rights associated with an advertisement needs to exist in every country the advertisement is made in order for it not to be considered misleading. Misleading advertising can also amount to unfair competition.

If a product with an unwarranted use of ® amounted to unfair competition, it could result in the imposition of restrictions on those goods. This could potentially conflict with the EU concept of Free Movement of Goods – guaranteed by Art 28 of the EC Treaty. So, a situation might arise where products are distributed to various member states but trademark protection only exists in certain member states were the products are sold.

The German Supreme Court referred this point to the European Court of Justice in Pall Corp. v P.J. Dahlhausen & Co. 1990 (C-238/89) . The ECJ held that in this context the free movement of goods will prevail. The Court took the view that national provisions could have the equivalent effect to a quantitative restriction. Since this judgement trademark owners do not need to worry about injunctive relief if they engage in inter-Community trade but do not have trademark protection in every member state.

Nevertheless, problems may still arise where there is no inter Community trade e.g. where goods are imported into a member state from outside the EU – this would mean that rules on the free movement of goods in the EC Treaty would not apply. Here, lack of trademark protection for the respective member state may still be unfair competition under national rules, in addition to a probable infringement of that member state’s trademark laws.

In conclusion, inter EU trade seems more flexible when using the ® logo provided it is protected in at least some member states. However, this is not the same for goods sold only domestically in one country or imported from outside the EU into an EU member state. As an extra precaution, proprietors would be wise to follow the UK model and include a reference in accompanying product literature which clearly indicates the country to which the ® symbol relates.

By Nicola Mallon

Trademark infringement and the internet

One of the biggest challenges to the territorial nature of trademark protection is the use of trademarks on the internet. What is the situation, for instance, if a French website uses a trademark registered in the UK to promote the same goods or services? If the website is accessible to users in the UK, does use of the trademark constitute infringement?

“omnipresent cyberspace”
An indication of how this situation might be dealt with in the UK, can be gleaned from the court’s approach in 1-800 Flowers Inc v Phonenames Ltd [2000] ETMR 369. The case concerned opposition proceedings in a trademark application to register the alphanumeric mark ‘800-FLOWERS’. The court was asked to consider whether use of the proposed mark on a website proved that the mark was intended for use in the UK. The Applicant argued that since his website could be accessed by users in the UK, this showed a clear intention to use the mark in that territory.

Justice Jacob roundly rejected this idea, arguing that the mere fact that a website can be accessed anywhere in the world, does not mean that it should be regarded as being used everywhere in the world. Instead, the website owner’s intentions should be assessed based on the site content and the impression a user would be likely to gain when entering the site. Taking the alternative view would lead to the untenable situation whereby any use of a trademark on any website, wherever the owner of the site is located, could amount to a trademark infringement anywhere in the world, since a website exists in an “omnipresent cyberspace”. His Lordship concluded:

...[f]or trade mark laws to intrude where a website owner is not intending to address the world but only a local clientele and where anyone seeing the site would so understand him, would be absurd.

Intention of the website owner
Returning to our initial example, Justice Jacob’s reasoning suggests that a French website using a UK trademark in the course of business, will not constitute an infringement if the site’s activities are not directed towards the UK. The website owner might, for example, point to the fact that the content is written mainly in French, or that the prices are only listed in Euro, as evidence that his website is not targeting UK consumers. What would be the case, however, if his website used a ‘co.uk’ domain name? Could this alter the impression given by the content? The recent judgment by the European Court of Justice in the joint cases of Peter Pammer v Reederei Karl Shlüter GmbH (C-585/08) and Hotel Alpenhof GesmbH v Oliver Heller (C-144/09) suggests that this could be the case. In this instance, the Court held that where a website uses a top-level domain name other than that of the member state in which the trader is established, this would amount to strong evidence that the website’s activities were targeting nationals of other member states.

Local trading
These rulings indicate that there are a number of steps an online trader could take to protect their unregistered trademarks from the risk of litigation. Using a local domain name, for instance, rather than opting for territorially-neutral domain names such as ‘.com’ or ‘.eu’, could be a vital way to indicating a website’s intended recipients. Doing so could also have implications for a trader using an unregistered trademark, who wished to rely on the localised nature of his business as a defence to allegations of trademark infringement where he can demonstrate prior use of his mark. Section 11(3) of the Trade Marks Act 1994 provides that a registered trademark will not be infringed by an unregistered mark used in the course of trade, if the mark has an earlier right and applies within a particular locality. The purpose of the provision is to protect local businesses that may have accumulated good will in a brand used within a restricted geographical area. The courts’ sensible approach to trading on the internet means that local businesses can still find a degree of protection if they can demonstrate, through the architecture of their website, that their intention was to target a localised or regional market.



By Katey Dixon

Design Registration Explained

What is a design right?
A design right is a right of ownership in the appearance of the whole, or a part of a product (internal or external). Whereas a patent protects the way a product functions or how it is manufactured, a design right protects those elements that make a product (or a part of a product) look unique. The owner of a design right has the exclusive right to reproduce the design for commercial purposes.

Do I have to register my design to get protection?
No. A design right is created automatically once the design has been recorded in a design document, or an article has been made to the design. In the UK, an unregistered design right gives the owner an exclusive right to use the design for 5 years after it is first marketed. After this period third parties must be allowed to apply for a licence to use the design, for which the owner may receive royalties. An unregistered Community design right lasts for 3 years from the time it is first disclosed to the public.

What can be registered as a design?
Those features that make an object or a part of an object look original may be registered as a design. The lines, shape, contours, colours, and/or texture and material of an object may therefore form part of a design. Two-dimensional elements, such as ornamentation, graphic symbols and typefaces may also be registered as a design. Computer programs are expressly excluded. For a design to be registrable it must be original (i.e. an identical design must not already be available to the public), and must possess an individual character which distinguishes it from other designs on the market.

Why should I register my design?
• An unregistered design right only protects against the act of copying. If a design can be shown to have been created independently, the owner’s right is not infringed. However, a registered design gives the owner monopoly protection. This means that even if a competitor innocently uses the same or a similar design right to that which you have already registered, this constitutes infringement.
• It is only by registering a design that surface ornamentation of a product can be protected. An unregistered design right will not attach to any two-dimensional elements.
• A registered design right can offer a maximum of 25 years protection, whereas an unregistered right in the UK only offers 5 year exclusive use. An unregistered design right cannot be renewed. The certainty of a registered right may help you secure financial backing, and thereby encourage future exploitation of the design.

Why should I protect my design?
The design of your product may be just as important as the branding of your company. Consider, for instance Apple’s iPod design. Without its futuristic shape and colouring, it would be difficult to distinguish from any other mp3 player. In order to fully protect your investment in your product, you need to prevent competitors from using your design.


For how long does a design right last?
In the UK, a registered design right lasts for 5 years, but may be extended to a maximum of 25 years from the date of filing the application. An unregistered right lasts for a maximum of 15 years from the end of the calendar year when the design was first recorded, or 10 years from when the design was first made available to the public. However, after the first 5 years, third parties must be allowed to license the use of the design in exchange for royalties. In the EU, an unregistered design right lasts for a maximum of 3 years.

What designs cannot be protected through registration?
• a design which appears the way it is for technical reasons, in order to make the product function
• a design which offends public morality or accepted principles
• a design which incorporates a foreign flag or protected symbol may not be used without permission from the country concerned
• A design which includes elements which conflict with earlier copyright protected works

How long does it take to register a design?
If there are no complications, a UK design registration can be completed within 2-3 months. A Community design may take up to 4 months to register.

Should I register my design if I want to keep it a secret?
A Design right must be registered within 12 months of first being made available to the public, otherwise it will not be considered to be novel. This allows a one year grace period in which to test the product on the market before deciding to invest in a design. Once your design has been registered, details of the design will be publicly accessible at the Intellectual Property Office and may be viewed on its website. However, if you want to keep your design a secret, it is possible to postpone publication for up to 12 months from the application date. This is known as deferment. For Community registrations, secret designs can remain unpublished for 30 months.

Does my design right give me protection abroad?
An unregistered design right gives you protection in the UK for 10 years and in the EU for 3 years. A design can be registered in the UK through the UKIPO, in which case protection extends only to the borders of that territory. If you register a design through the OHIM, your design will be protected in the 27 member states of the EU.

Can I register more than one design in an application?
Yes. In the UK it is possible to register a number of new designs in a single application. While the addition of each design will increase the cost, this will be cheaper than filing separate applications. It is also possible to register multiple designs in the EU, so long as the designs are intended to be applied to products within the same class of the Locarno Convention.

Can my design be protected by copyright?
Yes, it is possible that elements of your design (or the whole design) may be protected under copyright. For example, the form and decoration of an article may be protected as artistic works. Copyright protection could also attach to the preliminary sketches upon which a design is based.

What can I do with my design right?
A design right is a property right which can be sold, mortgaged or licensed. For the avoidance of future disputes, it is advisable to register any such transactions with the UK Design Registry. We can provide advice and assistance on all matters relating to IP sales, acquisition or licensing.

Why register your trademark?

Defending your castle

American investor, Warren Buffett famously spoke of successful businesses as, “economic castles with unbreachable moats”. While the castle refers to the product or service being offered, the moat signifies a business’s ability to create a sustainable commercial advantage in a competitive market. Securing your intellectual property is key to defending your product from rival businesses. In a rapidly expanding global market, propelled by the internet, awash with counterfeit products, a company’s trademark is its primary fortification.

A trademark is a logo, image or symbol (or more unusually, a shape, colour or sound) that distinguishes your goods or services from those of your competitors. It not only defines the origin of the goods, denoting quality and accountability, but it creates an image, attracting consumers through its presentation, marketing and advertising. A company is not required to register its trademark, however it is through registration that maximum protection can be effected.

(i) Extending your protection
It is a common misconception that registering your company or domain name prevents others from using that name as a trademark. The only way to guarantee legal exclusivity is to register your trademark. Although it is possible to take action at common-law to prevent a competitor from passing off your unregistered mark as their own, this can be a costly and difficult process. Not only must you prove that good will - in the shape of a strong reputation - is attached to your mark, but you must also show that the misrepresentation is likely to deceive the public.

By registering a trademark the presumption of valid ownership is raised, and all that must be proved is that an identical mark was used without consent for the same goods or services. The unlicensed use of similar marks for similar goods or services will also constitute infringement where it can be shown that there exists a likelihood of confusion on the part of the public. Further protection is afforded where a good reputation can be said to have attached to the RTM (registered trademark). In this case an infringement occurs when a trader takes unfair advantage of the mark, or uses it in a way that is detrimental to its distinctive character.

(ii) Securing your stronghold
Registering your trademark will also minimise the risk of being sued for trademark infringement by a competitor. Under trademark law, registration is a defence to an action for infringement. In the absence of any innocent use defence, using a trademark that has been registered by another business could lead to expensive litigation, forcing you to rebrand your goods or services, thereby losing any associated goodwill amassed to date. RTMs are identifiable by the ® symbol. Since it is an offence to use this symbol for unregistered marks, its presence is likely to act as a strong deterrent for would-be infringers. Moreover having registered your trademark, you will receive notification from the registering office, of applications for similar or identical marks targeting similar market areas. This allows you the opportunity to oppose those applications that, if successful, would threaten the exclusivity of your mark.

(iii) Financial incentives
There are also significant financial incentives to register your trademark. An RTM is a quantifiable asset with a monetary value. It is treated at law as a form of property, and can therefore be bought, sold or licensed for exploitation. By demanding royalties for usage of the RTM under a license, it can serve as a revenue base for the registered owner. RTMs can also be used as a security interest in financial agreements.

Looking at the bigger picture, a business with an RTM, shielded from the risks of lengthy infringement disputes, and confident of the ownership and parameters of its intellectual property, is a business fortified against competitors, and therefore attractive to potential investors and buyers. Registering your trademark is therefore not only a way to safeguard your immediate concerns, but is also a means of protecting your future interests, should you wish to exploit your success through licence agreements, or sell your assets for the value they are truly worth.

Contact us for a trademark registration quote.

Advice on Trademark Ownership

Are you starting up a new company with some colleagues? Has your partner presented a trademark idea for your business? Have you considered the implications assigning trademark ownership might have on your company?

Unlike copyright or patent law, under the Trade Marks Act 1994, a registered trademark does not have a proprietor until an application to register it has been made. The owner will be the person named in the application. An individual, a company or a partnership may be registered as the owner. Ownership can be transferred (assigned) at any time in the application process or after registration. In the UK, a fee of £50 will be incurred for transferral of a registered trademark.



Company / Partnership Ownership

· Transferral or license of a registered trademark

o If the company is sold, the IP rights are generally transferred to the purchaser

o The company can assign or license the trademark to other companies or individuals

o If the company goes bankrupt, the trademark part of its assets can accordingly be sold off.

· When the company owns a registered trademark its value may be increased:

o Registered trademarks are quantifiable assets with a monetary value

o Registered trademarks can serve as a security interest in financial transactions

o Successful registered trademarks can be exploited as negotiating tools in business ventures

· Owners of a registered trademark are entitled to sue a third party for infringement. However, they are also liable in the event that their registered trademark is deemed to have been used unlawfully. Company or partnership ownership protects the individual from potential liability.


Individual Ownership

· Transferral or license of a registered trademark

o An individual may assign or license a trademark to a third person

o In the event of death, trademark ownership passes to the individual’s estate

o If the company goes bankrupt, the IP rights remain with the individual, and cannot be seized as part of the company’s assets. However, in the event that the individual faces bankruptcy, the trademark may be sold off accordingly

· Revenue:

o Ownership of a registered trademark could generate income for the owner, since royalties may be demanded for trademark usage (from the licensee)

o This system of ownership could have tax advantages for a company


Co-ownership

· Co-owners are at liberty to form any agreement concerning the division of rights of ownership. In the absence of agreements, the law will assume that each applicant “is entitled to an equal and undivided share” (TMA s.23). This means that:

o Each co-proprietor is entitled, without the consent of the other co-proprietors, to do any act for his own benefit, which would otherwise amount to an infringement of the trademark

o A co-proprietor may not grant a licence to a third party for use of the trademark, or assign his share without the consent of the others

o In the event of the death of a co-proprietor, his share passes to his estate, not to the other co-owners

Google’s AdWords faces further scrutiny in the Paris Court of Appeal

Both LVMH Moet Hennessy Louis Vuitton and the internet search giant Google claimed victory last week in the latest of a series of challenges to Google’s AdWords business. On Tuesday 13 July the French Supreme Court (Cour de Cassation) referred a ruling in favour of the French luxury goods company back to the Court of Appeal.



The dispute involves Google’s paid referencing service, ‘AdWords’, which allows advertisers to bid for keywords- many of which are protected trademarks- used in Google’s search engine. When an internet user enters a keyword, advertisements known as “sponsored links” are shown in the top of the screen. Consequently, a search on a trademarked word could bring up a competitor’s product or - in theory – even direct the consumer to counterfeit products.



The Cour de Cassation’s judgment affirmed an earlier ruling by the European Court of Justice, which held that the practice of selling keywords associated with registered trademarks does not infringe trademark rights per se. Despite using its official blog to herald that ruling as a triumph for the free flow of information over the shackles of an overly coercive IP regime, the court made it clear that such advertising could constitute an infringement where it “does not enable an average internet user... to ascertain whether the goods or services referred to therein originate from the proprietor of the trade mark... or on the contrary, originate from a third party.” LVMH said that the Supreme Court’s recent decision “will enable the Paris Court of Appeals to rule on Google’s civil liability when using trademarks without the trademark owner's authorization." No date has been set for the forthcoming hearing.



Sources


http://googleblog.blogspot.com/2010/03/european-court-of-justice-rules-in.html

http://www.mediaweek.co.uk/news/1015878/Google-AdWords-held-liable-sale-trademarks/

http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2010/07/12/daily10.html

Is it possible to trademark a smell?

Following the ECJ's ruling in the 2001 Ralf Sieckmann case, courts have continued to support the view that it is not possible to register smells or sounds as trademarks. A smell cannot be adequately graphically represented by a verbal description because it is too imprecise. Manufactured smells (which would include scents and perfumes) can give rise to intellectual property rights which will generally attach to the information describing the ingredients of / or formulae for the smells or to the processes of production (or both). This type of information has traditionally been protected by treating it as a trade secret.

By way of analogy, take for example the ingredients for Coca-Cola®. This information has always been guarded by the company as a trade secret and its disclosure to employees or third parties has always been under the form of non-disclosure agreements. Trade secrets are generally enforced by contract.

The advantage of holding a trade secret is that the intellectual property rights can exist indefinitely so long as you manage to keep it a secret. The trick is to make sure that you have sufficient contracts in place (whether with your employees or contract manufacturers or other third parties) to allow you to disclose freely the ingredients and means of production of your scents on a need to know basis. Any misuse or unauthorized disclosure of a trade secret by a contracted party would generally amount to a breach of contract and an actionable claim in the courts, giving the holder the right to an injunctive remedy (where available) and possible recovery of damages.


If you would like more information on this article or require assistance in the preparation of non-disclosure or employer/employee covenant terms to safe-guard this type of intellectual property, please contact Forde Campbell LLP.