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How To Protect And Enforce Trade Marks On The Internet

The internet has transformed our business landscape in ways that were unimaginable as little as 15 years ago. In 2018, a person can set up an online store, and market and advertise their wares or services with considerably less expenditure than they would need if they invested in a brick and mortar based business.

But investing time and resource into creating a brand may prove fruitless if competitors are able to blatantly copy your domain name, hashtags, tweets and/or straplines without your consent.

Fortunately, trademark law has developed along with the online business ecosystem so that organisations are better able to protect the brand they have so carefully cultivated.

Before we discuss how to protect your brand on the internet, it’s important to look at the law of trade marks as a whole, which may make it easier to put digital protection of trade marks into context.

The Law of Trade Marks in the UK

A trade mark’s function is to allow consumers to identify a product or service’s origin. For example, if you buy a product from McDonald’s, you might expect that it to have the ‘golden arches’ symbol on all of the packaging. This is McDonald’s trade mark, and they fiercely protect it. Mary Blair discovered this in the 1990s when she opened a small sandwich shop in rural England and named her shop ‘McMunchies’. McDonald’s lawyers came knocking and demanded she change the name of the shop, claiming they owned the prefix ‘Mc’ and that therefore, Mrs Blair was infringing their trade mark. Although the food giant suffered a wave of bad publicity as a result of the subsequent legal proceedings, Mrs Blair was eventually forced to change the name of her shop.

In response to the proceedings, a McDonald’s spokesman was quoted saying:

“We have made a significant investment over the years to build up the reputation for restaurant services and food items associated with this trade mark and also of the golden arches logo, which is also registered. If someone, either deliberately, or unintentionally, uses our trade marks in their own food or restaurant-related business they are effectively using something that does not belong to them”.

Trade marks can be made up of words, slogans, logos, sounds, three-dimensional symbols, or even smells and colours. To illustrate how broad the range of potential trademarks can be, Hasbro was recently granted a trademark over the ‘yeasty’ smell of Play-Doh!

In the UK, trade marks are comprised of four types which co-exist within the existing body of law:

  • UK registered trade marks
  • European Union Trade Marks (EUTMs), formerly known as European Community Trade Mark (CTM)
  • International registered trade marks
  • Unregistered trade marks

Trade marks are protected only in the jurisdiction in which they are registered. The Intellectual Property Office (IPO) maintains a list of all trade marks registered by British businesses and international trade marks which cover the UK.

The European Intellectual Property Office (EUIPO) manages trade marks registered or designated inside the European Union.

It is possible for trade marks to remain valid indefinitely, provided they are renewed every ten years. Once a mark has been registered for five years, it becomes subject to “use” requirements. This means that if the owner of the trade mark cannot show it has been put to “genuine use”, the trade mark may be revoked.

Registering a trade mark in the United Kingdom

The IPO is responsible for assessing applications for trade marks and granting registration. Before applying for a trade mark, you will need to search both the IPO Trade Marks database and the European Community Trade Mark database[1] to check if the mark you wish to register is sufficiently unique. If an earlier trade mark does exist, an application can still be made. However, the Registry will inform the owner of the existing trade mark of your application, and they do have the right to object. To save time, it may pay to do a little research on the trade mark and its owner to establish whether the mark remains in use.

Once the IPO receives your application, it will conduct its own searches. You will then receive a report as to what, if anything, has been uncovered and will be granted the opportunity to answer any concerns another party may have to you registering your trade mark. After this process is complete and no objections stand in the way, the prospective trade mark will be published in the IPO’s Trade Marks Journal. A further eight weeks is allowed in case any objections from third parties are raised. If none are forthcoming, or any objections that do occur are dispensed with, then the trade mark will be registered.

Registering a trade mark requires a level of expertise; therefore, it is advisable to instruct a solicitor to assist you.

Passing Off

If you discover that someone may be copying your goods and/or services and misrepresenting them as yours, but you do not have a registered trademark, you may have an alternative remedy available under the law of ‘passing off’.

The law of passing off is designed to protect the goodwill that a trader has developed whilst doing business. It can cover names, packaging, slogans, and any other element where goodwill may have accrued. The law surrounding passing off is not contained in any legislation, but has instead been developed through case law. The case of Reckitt & Colman Products v Borden [1990] 1 All E.R. 873 sets out a useful precedent for the conditions which must be present for passing off to occur. These are:

  1. There are particular features which customers recognise as distinguishing the claimant’s goods or services, and goodwill has been developed around these,
  2. Either deliberately or accidentally, the defendant has misrepresented the goods or services they are trading in a way that consumers may be led to think they are those of the claimant; and
  3. The defendant’s misrepresentation has resulted in the claimant suffering damage.

You may ask, why go through the formalities of obtaining a trade mark when you can simply rely on the doctrine of passing off. The answer is this – proving goodwill in a given case is both difficult and expensive. Furthermore, unlike trade mark infringement, it is up to the person purporting to possess the goodwill to prove deception or misrepresentation, making this more onerous for the owner of the intellectual property. If a trade mark is registered, it is for the alleged infringer to prove their actions have not infringed on the trade mark holder’s rights.

The internet and trade marks

The growth of the Internet has significantly influenced the development of the law surrounding trade marks, especially in relation to domain names, meta tags, and social media. This is because now not only do organisations need to ensure their marks are identifiable to consumers, they also need to ensure search engines algorithms recognise distinctive domain names and meta tags.

Domain names and trade marks

Domain names may now be classed as business assets in their own right. For example, the domain name, PrivateJet.com was sold for $30.18 million in 2010. Therefore, if your domain name is integral to your brand, it is imperative you protect it by applying for a trade mark. The term used for others registering or using your domain name in bad faith is ‘cybersquatting’.

The first point to note is that simply purchasing a domain name does not grant you a trade mark over it. Digital marks, like all other trade marks, must be registered. Likewise, cybersquatting can be found, even where there is no “use in the course of trade”. And trade mark infringement, without cybersquatting, can occur where a domain name bears no resemblance to a trade mark, but the web content or code makes illicit use of the trade mark.

In 2017 Yorkshireman Wayne Stephens featured in the headlines after UK regulatory body Nominet Dispute Resolution Service declared his fan-site, ilovealdi.co.uk, took unfair advantage of the German company Aldi’s trade mark rights by using the company’s name in its URL. Mr Stephens was forced to hand over his domain name without any compensation.

To bring a successful case within the Nominet Dispute Resolution Service for a trade mark infringement or passing off, you need to show not only that the cybersquatter is using a domain name similar to yours without any legal right to do so, but also that their actions were in bad faith. An example of the importance of successfully demonstrating the element of bad faith was illustrated in the case of Flatworld Solutions Pvt Ltd v EUIPO Case T-340/16 ECLI:EU:T:2018:314. Here, the company, Flatworld, was contacted by the entity which ultimately became ‘OPS’ regarding possible collaboration in the EU, particularly in Germany. No long-term collaboration was agreed; however, Flatworld signed a memorandum of understanding agreeing to work with OPS on a case by case basis. Flatworld made clear it did not agree to OPS using its logo and domain name, ‘OUTSOURCE2INDIA’, if the parties did not end up working together.

A few months later, Flatworld discovered a company under the name of Outsource2India Ltd[2] had been registered and that this company had an active website using the domain name www.outsource2india.de. Outsource2India Ltd applied to register a sign using the words OUTSOURCE2INDIA as a trade mark. Flatworld applied to trade mark a sign using the same words. Flatworld subsequently applied for a declaration of invalidity in respect of Outsource2India Ltd’s earlier trade mark.

The Cancellation Division of the European Union Intellectual Property Office (EUIPO) stated it was clear that OPS, as it ultimately became, used Flatworld’s unregistered mark (i.e. its domain name and logo) in bad faith. OPS successfully appealed that decision to the Board of Appeal of the EUIPO. However, the Board of Appeal’s decision was ultimately reversed by the EU General Court, which noted:

“In the first place, it should be observed that the intervener knew that the applicant was using, in particular in the German territory, a similar sign for the same services, that could be confused with the contested mark. The applicant offered and provided, from 2006, its outsourcing services, under the name of its non-registered mark, to client companies established in the European Union and, more particularly, in Germany, via its German-language subdomain, hosted by its top level domain name in English. Moreover, it is apparent from the case file that the applicant wished, through the intervener, and not merely via through the commercial interface through which its German-language subdomain operated, not only to build on its presence in the German market by strengthening its relations with its existing customers, but also to extend that presence by canvassing new customers.

After examining all the facts, the court held that by applying to register its mark in circumstances where OPS had been informed by Flatworld, OPS’ trade mark was too similar to Flatworld’s mark, and that OPS had intended to exploit the economic potential of Flatworld’s non-registered mark.

Trade marks and social media

Nowadays, most organisations have a strong social media presence and marketing policy in place that aims to direct advertising through these platforms. Social media allows companies to reach thousands of potential consumers with a single tweet or update, create a loyal following online and, if creative genius strikes, occasionally hit upon the elusive and highly coveted ‘viral’ post.

When a new vehicle for commercial gain becomes available, there are inevitably individuals who seek to trade off a successful and hard-won brand, rather than put in the years of effort it takes to cultivate one for themselves. On social media, this is known as ‘username squatting’. Here, a user may potentially infringe a trade mark by creating a social media profile with a well-known trade mark as their username.

Although username squatting may not necessarily in itself result in a trade mark infringement, if the user goes further by either impersonating the brand or implying that there is a connection between them and the trade mark owner, infringement may occur.

There is also a potential danger, especially with the use of hashtags (#), that someone will spread nasty, offensive, misleading, or even defamatory comments about a particular brand on various social media platforms.

Applications to register hashtags as trade marks have increased across the globe in recent years. Unsurprisingly, the United States Patent and Trade mark Office (USPTO) has seen the highest number of hashtag trade mark applications and has now added specific guidance on the subject in its Trade mark Manual of Examination Procedure; it is likely that other registries, such as the UK Trade Mark Registry and the European Community Trade Mark database will do the same.

The biggest hurdle a company will need to overcome when attempting to register a hashtag is contained in section 3(1)(b) of the Trade Marks Act 1994, which provides that trade marks ‘which are devoid of any distinctive character’ should not be registered. The hashtag symbol itself cannot be trade marked as it is not sufficiently distinct and is a linguistic symbol in free use, and will therefore be disregarded entirely in a trade mark application. However, beverage giant Coca-Cola got around this issue when it applied to trade mark the phrases #cokecanpics” and “#smilewithacoke” in 2014 by ensuring existing trade marks were incorporated into the phrase[3].

It may be advisable for companies looking to trade mark a hashtag to balance the time and expense of doing so against the reach of a particular campaign, the duration of the campaign’s length and whether it is being run only on social media or across multiple channels.

One issue with attempting to trade mark a hashtag is that they are designed to promote consumer interaction, and the way this is done is by people freely using the hashtag. In addition, if the hashtag is linked to a content as part of a greater marketing strategy, organisations may want the content to be shared, using the hashtag as a vehicle. If a campaign is a success, and the content goes viral, it is likely the hashtag will lose its uniqueness and will cease to be valid. To summarise, in principle, a hashtag is capable of being trade marked, but in practice, registering one may prove difficult.

Trade marks and Google AdWords

One area where there has been active debate in the English courts is the use of trade marks as keywords, perhaps best illustrated by the litigation surrounding the Google AdWords service.

Google AdWords allows businesses to purchase search terms (keywords) related to their business so that when these terms are typed into a Google search by consumers, the business’ advertisement will appear at the top of the result’s page.

Some high-profile companies have challenged the fact that Google does not prevent advertisers from using third parties’ trade marks as their own keywords.

For example, in Interflora Inc and another v Marks and Spencer plc [2014] EWCA Civ 1403, a long-running case which was referred to the Court of Justice of the European Union (CJEU) before it proceeded to trial, the court established the principle of a ‘reasonably well-informed and observant internet user’.

“The key question in any such case is whether the advertisement does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to in the advertisement originate from the trade mark proprietor. We believe this question is cast as it is because the essential function of a trade

In this case, Marks & Spencers had selected the keyword ‘Interflora’ as a search term for its Google Adwords campaign. Therefore, when Google users typed in the term ‘Interflora’, an advertisement for Marks and Spencers flowers appeared, contrary to what might otherwise have been expected. It was held that as long as the advertiser was exercising ‘due cause’ when using a third party’s trade mark in its Google AdWords campaign, no infringement was incurred.  ‘Due cause’ was deemed to mean engaging in fair competition and offering an alternative product or service than that provided by the trade mark owner.

In summary

Intellectual property law and the internet is continuing to evolve, and as the case law relating to trademarks in the digital age is further developed, we should have more clarity around how social media marketing and AdWords can impact intellectual property rights. At present, one of the take-home messages for companies is that when it comes to protecting and enforcing trade marks across the internet, obtaining expert legal advice is a worthwhile investment in order to protect your organisation’s brand and best interests.

 

If you have any questions regarding points that have been mentioned in this article, please call us on 020 3588 3500.



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