5 myths about brands and designs – answered!

This article is part 1 of 2. See here for part 2.

1)      It doesn’t matter how we use ® and TM

WRONG!  ® should only be used for registered trade marks – using it when a trade mark is not registered is a criminal offence in the UK whereas TM can be used for both registered and unregistered trade marks.

Neither are compulsory but using ® or TM can act as a deterrent to third parties and we recommend using the appropriate symbol as much as possible.  As well as sending out a stronger signal that the trade mark is legally protected (in the case of ®) it also shows that you take the protection of your brands seriously and understand the legal significance of Intellectual Property (IP) protection.

If you don’t want to use ® or TM next to your trade mark for aesthetic reasons, we recommend including a notice somewhere on your website which lists all of your trade marks and any other IP rights e.g. copyright, designs and patents.

2)      Protecting our brands and designs is something to think about down the line; it isn’t a priority now

WRONG!  Being proactive rather than reactive when it comes to IP protection will likely save you time and money in the long run.

If you are launching a new product, repackaging an existing product or starting to manufacture in a new country – make sure you are free to do so and have the right protection.

This means conducting clearance searches to ensure you can freely sell, manufacture and/or export under your brand name in that country without infringing someone else’s IP rights.

Without proper clearance searches you could be forced to re-brand and prohibited from manufacturing and exporting your products which could have a huge impact on your business.  You could also be liable for significant damages and legal costs, not to mention the embarrassment and confusion in explaining the situation to your consumers and stakeholders.

Assuming you have cleared your trade mark for use, you should apply to register it.  This will make it easier to stop others from registering and using conflicting trade marks. Failure to file the right applications at the right time to protect your own IP could cause you future infringement problems as trade mark rights are territorial and third parties could have obtained rights in those countries before you.  If you already have some existing protection, you should consider whether it is broad enough to cover your expansion, either into new markets or in relation to new products.

3)      We haven’t got it in writing, but everyone knows who owns the rights to our brands and designs

BEWARE!  It may sound obvious, but it’s vitally important to ensure there is no dispute as to who owns the IP, particularly in joint ventures or other, less formal, collaborations so you don’t run into problems later.

If you’re going into discussions with third parties and you’ve come up with the brand name or trade mark yourself ideally you would file any applications before any meetings.  In contrast, if an idea arises through discussions with third parties it’s important to clarify who came up with it by virtue of a written agreement so it can’t be disputed in the future – even the most amicable of relationships can turn sour.

As well as filing applications, you should consider taking the following steps:

  • If you create a design or logo yourself, email a copy to your own email address or post a self-addressed envelope containing the work and don’t open it; the date on the email or postmark prove the date the piece of work was created.
  • If you commission a branding agency in the UK to produce designs or logos, you don’t necessarily own the copyright in it so make sure the copyright is assigned to you.  This could be by virtue of the contract between the parties or by separate assignment.
  • Make sure that the design process is well documented and kept secret in case it is ever disputed so you can prove when the work was created and who owns it.

4)      We’re a UK based company – we don’t need to worry about the rest of the world

WRONG! Not acting early could mean you are prevented from selling, manufacturing or exporting around the world, both now or in the future.

For example, if you are a UK-based company for which the US is a major market, you will need to ensure you are free to use and register your trade mark there and that you don’t infringe existing third party rights.  A couple of specific issues that arise in the rest of the world are:

  • Trade mark squatters in the Far East – in the UK you start building up unregistered trade mark rights as soon as use begins but this is not the case in all countries.  For instance, in China, priority usually goes to whoever files a trade mark first regardless of who’s been trading under that brand name in China and for however many years.

Increasingly, and worryingly, we are seeing the Chinese system being exploited by companies who scour the UK and European trade mark registers and file Chinese trade mark applications for brands in their own name.  They know that if a UK company starts doing well, they may look to sell or manufacture in China (if they’re not already doing so) and when that company comes to file a trade mark application there they will blocked from doing so by the squatters’ trade mark.  More often than not, the only option is for the “rightful” brand owner to buy their “own” trade marks back from the squatters for thousands of pounds.

In addition, and regardless of whether registered trade mark protection is secured by the “rightful” owner in China, you also risk infringing by continuing to sell or manufacture in (or export from) China.

So even if your business doesn’t sell anything in China, if you manufacture there your whole business could be shut down if there is a squatter trade mark, since exporting branded products from China anywhere else in the world will amount to trade mark infringement.

If you do have an interest in China, it’s also worth considering whether you should create and protect a Chinese character version of your trade mark as the vast majority of the huge Chinese population won’t recognise Latin characters.  Again, file this application as early as possible to avoid a version you don’t like naturally becoming your Chinese equivalent, or a squatter applying to register the version you wanted to use.

We are also seeing these issues in other Asian markets including South Korea and Vietnam so if you have an interest in manufacturing or selling in Asia, think ahead and act early to preserve your position.

  • Assignment of rights in China – Chinese practice differs from UK and European practice in a number of ways.  One important difference is in relation to assignments.  Sometimes assignment documents relate to IP rights generally and don’t itemise individual trade marks.  In most countries this is not a problem but the Chinese Registry will not record the assignment unless the specific trade marks are listed.  Ultimately this means the trade marks remain on the Chinese register in the assignor’s name even though they have been legally transferred which can lead to tricky situations, particularly if one of the trade marks is cited against a new application filed by the assignee; if the assignor is no longer an active entity they can’t provide consent.

5)      We need to buy multiple variations of our domain names to stop third parties buying them first

WRONG!  Apart from being practically impossible to buy all domain name variants associated with your brands and company name(s) (not least because of the ever increasing number of generic top-level domains (gTLDs)), it’s also expensive and time consuming.  We therefore recommend sticking to just the few that are most important to you.

Don’t be fooled by companies trying to coerce you into registering all manner of different country codes and gTLDs by saying that third parties are “stealing” them.

If you do come across someone else’s domain whose use or registration gives you cause for concern, it may be possible to take it down or get it transferred to you via one of the domain name complaint services.  There may also be wider infringement issues if the domain is being used in a way which damages your business, so it’s worth taking legal advice to see if everything can be addressed in one go.

This article continues here: 5 more myths about brands and designs – answered!

If you require further intellectual property advice please contact the author, Alice Davies via alice.davies@gje.com.