Signs, Logos and Phrases: Trade Marks and their Territorial Limitations in a Global Digital World
Whether you know it or not, you have already been exposed to dozens of trade marks already within the day, such as the LinkedIn logo or Instagram’s emblem. But what are these trade marks, how do they work and what’s their value? In this article, we will examine what trade marks are, their commercial significance and, inspired by our very own experience, the problems that arise due to their territorial nature.
What is a trade mark?
A trade mark is a type of Intellectual Property. This means that it can be bought, sold, licensed, or assigned. A trade mark is a registered recognisable name, sign, design, or expression which identifies products or services of a particular source from those of other sources. It is this ability of a trade mark, to identify the producer of a good or the supplier of a service, that gives it value.
Intellectual property (IP) is a category of property that includes intangible creations of the human intellect, such as copyrights, patents, and trade marks.
The best examples of trade marks are trading names and logos. The use of the supplier’s name is the easiest way to specify the source of a good or service, but logos may be even more effective in conveying this information. Think of McDonald’s iconic golden arches, Apple’s bitten apple and Nike’s swoosh. All of these logos are instantly recognisable globally, informing anyone of the source of the goods which exhibit these signs, without needing any writing. Even a specific colour may be trademarked, provided that its use is sufficiently distinct to identify the business which seeks to use it, though it must be noted that this remains a rarity.
Designs and expressions may also be trademarked. The Lego Group had to get a license from Lucasfilm in order to manufacture its Lego Star Wars set, due to Lucasfilm owning a trade mark over the design of characters, vehicles, and sets from the Star Wars franchise. More peculiar is the ability to get a trade mark over an expression or even a single word. Outgoing US President Donald Trump has a trade mark over the phrase ‘You’re fired’, his catchphrase in the television show ‘The Apprentice’. Even more controversially, Marvel and DC Comics jointly own a trade mark over the word ‘Superhero’, preventing its use by other comic-book publishers.
It is clear that the range of trademark-able material is wide and there are over 160,000 different registered trade marks in the UK. Some of these are extremely valuable. Trade marks may even be the most valuable asset of a company, with the most prominent example being Coca Cola, whose trade marks are worth more than the company’s tangible assets.
However, it must be understood that trade marks apply to restrict only the commercial use of the trademarked material and only in specified markets, such as when used by a competitor. The legal rights given to a holder of a trade mark only apply within the markets in which the holder is either currently operating or those markets in which a consumer would expect the holder to operate in.
It is for this reason that when a business applies to register its trade mark, it must specify the industries in which this sign is set to be used. The UK Intellectual Property Office (UK IPO) currently has 45 different classes in which a trade mark may be classified: 34 for goods and 11 for services. For example, the aforementioned trade mark for the word ‘superhero’ is limited to publications (comic books and magazines), as well as playing cards, stationery, and collectable figures.
Once a trade mark is registered, others are prohibited from using the trademarked sign for a number of activities, including affixing the sign to their goods, offering goods on the market under the sign, importing or exporting goods under the sign, or using the sign on business papers and advertising. The holder of a trade mark can sue its unauthorised users and force them to erase the infringing sign from their goods or services. The registered holder can also force an infringing party to hand over goods which bear the registered mark.
More significantly, the registered holder may be entitled to damages as compensation for the loss the infringing use may have caused and the infringing party may even face criminal sanctions, such as fines and imprisonment for the individuals involved in serious trade mark infringement cases. In order for this protection to endure, a trade mark must be renewed every 10 years.
The inspiration for this article arose when we noticed the expansion of our team on LinkedIn, with a new person registering as an employee of Law Forward. The issue with this was that this person was a total stranger to us and was not really working for Law Forward. We quickly found out that this person was working in a newly formed Wisconsin-based law firm, which had the same name as us. It became apparent that this could become a source of confusion and, as future lawyers, we sought to find ways to remedy this, leading us to an examination of trade mark law.
It was at that point that we realised that the current trade mark regime is not suitable for today’s global digital world. A trade mark is only valid within the country in which it is registered. Accordingly, a UK trade mark is only valid in the UK and the Isle of Man. A global business needs to register its trade mark throughout all countries in which it operates. This can be a hugely cumbersome and expensive process. In addition to separate fees for each application, legal advice must be sourced in relation to the trade mark regime of each country, further inflating costs. Global trade and the rise in digital services means more businesses will have to deal with these issues.
There are two main options designed to solve this issue: an EU Trade Mark; and the Madrid system. The first option gives a business the ability to obtain a community-wide trade mark that covers the whole of the EU through a single application, making the process cheaper and easier. This also aids the enforcement of a trade mark, as the registered proprietor of an EUTM can get EU-wide relief, rather than having to initiate proceedings in each member state.
The Madrid system provides a centrally administered system of obtaining a bundle of trade mark registrations in separate jurisdictions. This system does not create a unified trade mark. It merely facilitates the process of obtaining separate trade marks in up to 90 countries through a single application. The cost to use this service is proportional to the number of countries in which registration is sought and distinct enforcement proceedings must be brought to each separate state in case of infringement, making this option available for only the largest businesses.
The fragmented protection of trade marks is set to become even worse, as Brexit removed the legal protection and convenience that the European Union Trade Mark regimes has brought. As per the European Union (Withdrawal Agreement) Act 2020, the UK Intellectual Property Office created a comparable UK trade mark for each existing EU Trade Mark and automatically granted their holders the same rights as those of a UK trade mark holder, without requiring a fee.
Yet, for those EU Trade Mark applications that were still be pending on the 31st of December 2020 and for anyone wishing to register a new trade mark throughout Europe from 2021 onwards, a separate application will have to be made to the UK IPO. Whilst the Madrid system will continue to be available, Brexit is bound to make the goal of a globally enforceable trade mark more distant. In a global digital world, this remains a sore spot for businesses wishing to attract a worldwide audience.