Today’s blog looks back at some costly trademark and intellectual property slip-ups. Many might describe these slips as the type that small business often make. Not all are strictly trademark related, but trademarks play a central role.
Innocent’s Halo Trademark Cancelled.
In 1999, with success a pipedream, Fresh Trading Limited (‘Fresh’), the company behind the Innocent brand of smoothies hired a design company to develop what has since become an iconic logo trademark (well to smoothie drinkers anyway). This was later registered as a Community trademark. A price was agreed, 1% of the shares in Fresh (!), but no formal agreement was signed. The design co, Deepend doodled up the logo.
In 2001, Deepend went out of business, before the shares had been transferred. And they haven’t been transferred since. The Innocent brand’s trademark logo has been in use ever since.
But was the copyright in the design transferred from the design company to Fresh. Not so says an OHIM Cancellation Division decision (OHIM manage the Community Trademark register). The result, the trademark is to be cancelled. Fresh is appealing and has applied to register the mark again.
There are a number of interesting legal questions governing UK law and equity that are at issue. While Fresh are confident, it may not be plain sailing, unless they can show how the design company was paid. The problem of course, with interesting legal questions is that they are worth fighting and cost money to get the answer to.
The lesson here is to make sure that you transfer the intellectual property rights when you engage an external contractor for your business. It’s a simple contractual clause, but if ignored, even many years later and after the contractor has gone out of business, it can end up costing your business its iconic brand, lots of money and loss of management focus from building continued success.
The Cancellation Board’s decision is interesting for other reasons. It highlighted that you have to back up submissions with evidence. Innocent claimed its logo was well known. Hardly a controversial claim. However, this claim was rejected as no evidence was given that the trademark was even being used. So make sure you satisfy the requirements of any court or other deciding body that you are appearing before or it will cost you even more to put right.
Karen Millen’s Warning from ICANN Domain Arbitration Panel
Picking up from Fresh’s failure to meet the formal evidence requirements in an intellectual property dispute, is fashion house Karen Millen. Like many global fashion brands, it has to fight off online cyber-squatters and counterfeiters and has taken a number of .com domain cancellation actions. ICANN’s UDRP offers a cost effective way to shut down domains that infringe trademarks. It works best with registered trademarks, but can also work with unregistered rights.
A UDRP decision shows how Karen Millen perhaps took some liberties with the rules of evidence under the UDRP scheme and was fortunate not to lose an unopposed application. In fact, it has lost an unopposed application before, so it cannot claim to have been unaware of the rules. A complainant has to prove that a respondent lacks rights or legitimate interests in the disputed domain name. Because it is difficult to produce evidence in support of a negative assertion, the threshold to prove a lack of legitimate interest is low. You only need to put forward a prima facie (this means setting out the evidence that you will rely on, but without having that evidence examined) case on this element, at which point the burden shifts to the respondent to present evidence that it has some rights or legitimate interests in the domain name at issue. The initial burden of proof, however, remains with the complainant.
Karen Millen asserted that the Respondent was selling counterfeit merchandise, but, did not support these allegations with evidence of any kind. As Karen Millen was subject to the same criticisms in an earlier complaint, the arbitrators considered denying Karen Millen’s complaint outright on the grounds that it did not show a prima facie case. However, based on the Panel’s review of the website at issue and data concerning the identity of respondent, it appeared to the Panel that the goods probably were counterfeit, and that justice would not be served by denying the complaint without at least seeking confirmatory evidence of Karen Millen’s allegations. The Panel concluded that it would be appropriate to give Karen Millen an opportunity to provide this evidence. Karen Millen ultimately provided a log detailing the names and numbers of the specific customers that complained about the merchandise, identified the person who reviewed the merchandise and verified it as counterfeit, and confirmed that the merchandise is being held pending resolution of this matter. This was accepted as prima facie evidence.
Interestingly, the Panel went on to warn:-
‘Should Complainant continue in other UDRP proceedings to submit unsupported conclusory allegations, Panels may no longer be inclined to give Complainant the opportunity to supplement its complaint and may instead elect to deny the complaint.’
Apple’s 60 Million Dollar Question:-
When an Apple subsidiary bought the global rights to use the Ipad name from Proview a Taiwanese company, for US$55,000, Apple was sure that it had secured the rights to the Ipad trademark in China, among many other Asian territories. China is Apple’s second largest market after the US. This looked like a great ip and trademark business deal for it.
However, Proview later claimed that it still owned the rights to use the trademark in China, and accused Apple of trademark infringement. Proview sought US$1.6 billion damages and manged to ban Apple’s Ipad from the shelves in many areas.
Both sides had the same documents, but both had different interpretations of whether China was included.
When the dispute went to the courts in China, a mediated settlement is reported to have cost Apple around US$60 million to obtain the rights to use the Ipad trademark in China. However, at least it means that it could get its Ipad on to the shelves, and very quickly off them in the massive Chinese market. But a costly dispute to resolve nonetheless that could have been avoided if the agreement was clear.
Message from TMR Fitzsimons Trademarks
Check out the brands that feature, Innocent Smoothies, Karen Millen and Apple Computers. If you have any questions about dealing with your trademark issues or other intellectual property matters call Michael Fitzsimons directly on +353 (0)41 9843534 for advice.
