Trademark infringement on the up

Almost three-quarters of brands have experienced trademark infringement in the past year, with four in 10 saying infringement has increased in the past two years, a new survey reveals.

The research, commissioned by CompuMark, a division of Clarivate Analytics, found that 41 per cent of trademark professionals interviewed had experienced up to 10 occurrences of infringement, while a further 22 per cent experienced up to 30 instances in a year, and 11 per cent said they had experienced more than 31 instances of infringements.

Respondents were also asked about the impact of these infringements, with customer confusion (44 per cent) cited as the biggest effect, followed by loss of revenue (41 per cent), and as a resource challenge for marketing or legal (37 per cent). Reduced customer loyalty was cited by 34 per cent of those surveyed, while 33 per cent mentioned damage to brand reputation.

According to the report, 56 per cent said their organisation had taken legal action against third-party infringements, and one-third of the respondents said they had changed a brand name as the result of trademark infringement issues.

“Our report shows that trademark filing is on the increase,” says Jeff Roy, president at CompuMark. “With the ease of doing business on a global scale, the continued emergence of new entrants into the market and the proliferation of additional channels, such as social media, to consider, finding a unique mark to register is harder than ever before.”

“Brands will have to work harder than ever to combat infringement and mitigate the risks associated with it. As a result, the process of searching and watching trademarks is becoming increasingly important and will remain so into the future,” he added.

The report noted that businesses and individual brands were now having to compete on a global platform, with not just a focus on geographical markets but also grapple with the rise of online marketing channels, such as social media and e-commerce sites. The report noted that the global nature of brands, companies and products, as well as new online markets, increased the likelihood of infringements.

As the number of registered trademarks increased, it was also not always possible for brands to watch every single mark, particularly if they were older or part of seasonal campaigns, the report claimed, noting that only 22 per cent of respondents said they watched 76 per cent or more of their marks for infringement behaviour.

“The need for effective clearing, registering and watching of trademarks has never been more important. The consequences of not getting this right can have a significant detrimental impact on brands, including costly legal action, consumer confusion and loss of revenue,” the report said.

It added that the findings demonstrated that companies were choosing to monitor only a portion of their portfolio; notably those trademarks identified as the most valuable and impactful. “However, as the pressures of increased filings and limited budgets continue, the ability to monitor marks will be challenged,” it noted.

While the report does not specifically reference counterfeiting as an activity of trademark infringing behaviour, numerous other reports have highlighted the issues around monitoring for this illicit activity, as well as the scale. At the end of last year, Facebook revealed that for the first half of 2017 the tech firm received more than 377,000 reports of IP infringement covering copyright, trademark and counterfeits. Alibaba has also come in for criticism by the US Trade Representative over the “burdensome and insufficient” counterfeit takedown process on its platform for legitimates rights holders.

Meanwhile, CompuMark also explored the impact Brexit was having on trademark filing behaviour. The survey found that 70 per cent of respondents said Brexit was impacting how they were approaching the trademark process; 22 per cent said they were filing more UK trademarks, with 34 per cent of those respondents being based in the UK. And 31 per cent said they were filing more European Union marks, of which 18 per cent were among the UK sample and 29 per cent from the US.

In addition, almost one-quarter (24 per cent) of respondents said they were filing fewer UK trademarks, with only 7 per cent stating they were filing fewer EU marks.

The research – The Trademark Ecosystem: Insights from Intellectual Property Professionals around the World – sought to understand the state of the industry and the challenges faced. It was conducted by Vitreous World and involved the survey of 300 trademark professionals from in-house and external legal teams across the USA, UK, Germany and France.