Guide to the Law Relating to Trade Marks (part 1 of 2)

From logos to slogans, and from colours to shapes, registered trade marks can form an essential part of any business’ brand.

The registration of a trade mark gives the holder a so called ‘monopoly right’: the exclusive use of a particular mark in connection with a specific class (type) of goods and/or services. The holder can enforce its trade mark rights to prevent third parties from using the same or a similar mark in connection with the same or similar goods and/or services.

Registered trade marks can be very effective in protecting the goodwill in a brand.

This guidance note will look at trade marks, both registered and unregistered, and the respective benefits of both.

A trade mark acts as a sign to distinguish the goods (and/or services) of one trader from those of another: a stamp of unique origin.

A well-chosen trade mark can allow a business to stand out from its competitors and even promote brand loyalty. A poorly chosen mark on the other hand can generate confusion and even dilute the goodwill in a brand.

Therefore, it’s common to consult a trade mark attorney when registering a mark. Whilst it is not essential to consult an attorney, if a business has a particular business plan or strategy, obtaining expert advice at the outset can help to avoid the common pitfalls around registration.

As a first step, a business should identify its key and unique identifying features of its business’ ‘brand’ that it wants to capture as its trade mark(s).

Then, it can look at whether those key features could be protected by registered intellectual property rights.

The Trade Marks Act 1994 (the Act) provides guidelines in respect of what can and cannot be registered as a UK trade mark. The general requirement is that a mark must be distinctive.

Registered trade marks can take many forms, extending beyond a simple logo to protect:

• Names, for example ‘ALDI’ (owned by Aldi GmbH & Co. KG);

• Slogans, for example “Gives You Wings” (owned by Red Bull GmbH);

• Domain Names, for example ‘AMAZON.COM’ (owned by Amazon Europe Core S.à r.l.);

• Colours, for example a particular shade of robin’s egg blue for Tiffany’s; and

• Shapes, for example the shape of the classic glass Coca Cola bottle.

Where a trade mark lacks any distinctive character by the fact that it is descriptive of the goods and/or services; or where a mark is similar to other registered trade marks, the UK Intellectual Property Office (IPO) will generally refuse to register a mark.

Trade marks are registered in classes (numbered for ease of reference) and cover a wide range of goods and services, from textiles to tobacco, from transport services to temporary accommodation. The initial task for any applicant therefore is to consider for what goods and/or services the mark is likely to be used. There is little point in registering a trade mark in respect of a range of goods and/or services for which you have no intention of offering.

Recent case law has confirmed that registrants should be as specific as possible with regard to which services/goods the trade mark is registered against, to ensure a stronger, more robust mark.

Provided that the registration of the trade mark is renewed every 10 years, it can last indefinitely.

However, once registered, the holder of a trade mark is advised to conduct periodic reviews of their portfolio to ensure the protection afforded to the mark is still satisfactory, and that it is represented in the most appropriate classes of goods and services.

As part of the registration process, it is necessary to decide in which jurisdiction the chosen trade mark is to be registered.

Depending upon where a business intends to trade, there are different possibilities in respect of trade mark registration localities; from a UK trade mark, to a wider all-encompassing Community Trade Mark (which covers Europe) or even an International Registration.

Community trade marks cover the UK presently however Brexit has injected an element of uncertainty into this. It is anticipated that guidance on this will be forthcoming from the IPO.

Each jurisdiction has its own registration process and assessment criteria (i.e. what may be registered in one jurisdiction may not be in another). There may also be advantages to registering in one jurisdiction over another.

Therefore it is recommended that expert advice is sought at the outset, so an effective trade mark registration strategy can be devised and implemented with regards to the choice of mark, class and locality.

A registered trade mark can be a valuable business asset, as it can be commercialised: licensed for use by third parties or its value can be realised through a sale.

• Licensing a trade mark may be particularly useful for a franchised business, allowing expansion into other territories or markets.

• Alternatively, if a business wishes to divest itself of a particular commercial operation, it can sell the business and assign the rights in the trade mark to the buyer.

There are of course advantages and disadvantages to licensing and assigning trade mark rights. With regards to licensing, the holder of the mark may retain control over the use of the mark at the same time as securing a royalty stream for the future. However, a disadvantage of this route is that it may come with an ongoing obligation to maintain and protect the trade mark for the benefit of the licensee.

A registered trade mark seeks to protect the goodwill built up in a brand. If a business is seeking investment through bank finance or other funding, there are clear advantages to being able to offer a protected brand, with an understanding of its own IP rights.

The next guidance note in this series (Part 2 of 2) will explain the concept of unregistered trade marks and how they, and registered marks, can be enforced to protect a business brand.

This article is not intended as specific legal advice.  Each case is judged on its own merits, against its own particular set of facts and will typically involve an objective assessment by the court of the precise words used.

The law relating to trade marks is complex and constantly developing.  The purpose of this note is to assist in providing an overall understanding of the legal context within which such rights operate.

Accordingly, in the event of such a dispute it is recommended that formal legal advice from a lawyer with expertise in this field is sought at the earliest opportunity.