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

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.