Counterfeiting problem? How to enforce your IP rights

This question probably occurs more often than not. A growing business has realised that its Intellectual Property (IP) portfolio is its most valuable asset and registered its name and brands as trade marks. After the initial feeling of all-round protection has worn off, the first infringements show up and the business starts asking itself how it can enforce its rights and stop the infringements.

Registering trade marks can seem relatively straightforward. Businesses can even do it themselves.  However, while registering trade marks is important, it is not enough. They have to be registered shrewdly so they carry a threat to infringers and they have to be policed and enforced. Assuming the trade marks of a business have been well registered (preferably with professional help), the focus then falls on policing and enforcement.

There are two main competitive threats to successful brands:

- Confusingly similar trade marks, and
- Counterfeit goods.

New applications

In the EU, the onus is on the IP owner to defend its rights. This is due to the fact that the trade mark offices do not, as they might in other jurisdictions, bar new applications from being registered on the grounds that similar but unrelated trade marks already exist. The implication is significant. Brand owners have to actively monitor new applications where they are trading and decide whether they are a threat to their own trade marks.

The main purpose of a trade mark is to function as an indicator of origin. The owner of a registered trade mark is granted exclusive rights in the mark registered for specific goods and services and can prevent others from adopting a similar name or logo, which would confuse the public into thinking that the other party’s goods or services under that mark come from the owner of the registered trade mark.  A trade mark therefore enables you to prevent identical or similar marks from being registered for identical or similar goods or services as yours.

Further, the risk of letting an application for a confusingly similar mark proceed to registration is that the scope of protection of the prior right gets watered down. If a brand owner allows other parties to register a similar trade mark, they are less likely to be successful in the future, should they decide to challenge any other application. Keeping the register clean is important.  If you allow other trade marks to co-exist with yours on the register, you risk ‘diluting’ your rights, making it more difficult to take action later on.

To prevent these risks, you can put in place a trade mark watch, so that you are notified of relevant new applications. If a new application is considered to be too close to your earlier trade mark, you can decide on appropriate measures to take against it, such as sending a warning letter or filing opposition.

Counterfeit goods and unregistered infringing trade marks

Counterfeit goods are imitations that incorporate confusingly similar elements to registered trade marks. The first difficulty businesses are confronted with is often to find out about counterfeit products.  A counterfeiter is unlikely to apply to register his trade mark.  In fact, he will want them to stay below the radar as they circulate in the market place.  The same goes for some trade mark infringers, especially those who set out to infringe. 

It is advisable for brand owners to regularly scan the market in which they trade for new products.  This way they will be sure to pick up counterfeit goods and new domestic manufacturers that may be too close to them with their branding.

In the UK, Trading Standards can also assist with this.  Imported counterfeits from outside the EU are harder to spot, but even these can be detected with the help of customs. This can be done by filing an application with customs informing them of your IP rights and asking them to keep a watch out for counterfeits at the border.

Taking action

Several out of court options have been mentioned above. However, sometimes going to court to enforce your rights becomes inevitable. This option is known for being expensive but it often prevents damages that go way beyond lost sales, such as damage to the reputation of a mark, brand tarnishment, brand dilution and even product (hence brand) liability.

In some cases, disputes can also be solved through Alternative Dispute Resolution, such as mediation and arbitration, which are becoming more and more popular as they enable the parties to reach a settlement outside of court, with the help of an impartial mediator or arbitrator, for more limited costs.

It should also be noted that the scope of trade mark registrations is limited geographically.  For instance, a UK trade mark registration will not grant you any protection in China. Therefore, businesses should ensure they protect their rights in all relevant territories.

Conclusion

The trade marks of a business are likely to be among its most valuable assets so it makes sense to protect those trade marks by registration.  However, there is no point in having registered trade marks if you do not enforce them, as sooner or later they will lose their value. 

The owners of successful brands spend a considerable portion of their revenue on IP protection and the effects are obvious. Every one of us attributes certain values and characteristics to brands like Apple, Google, Coca Cola and McDonalds.

This immediate recognition and identity is only achieved by a strong position in the market vis-à-vis every other brand in the marketplace. But it doesn’t happen automatically.  The owners of these brands work hard to police and enforce their trade marks.  They are on top for a reason.