Tag Archives: famous marks

How to trademark: 6 points you need to know

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How to trademarkYour name is what you use to promote and advertise your business and it’s what your customers use to recommend your product or service. You build up goodwill in the name through using it.

Therefore, it makes sense to own the rights in it by registering the name as a trademark as a priority. Once registered, the rights in the name may be transferred just like any physical property.

The choice of name is important from a legal perspective. The more distinctive your name, the easier and more affordable it will be to take action against anyone who piggybacks off your success.

There are 6 key points to take into account in order to understand how trademarks operate.

Similar trademark names are a problem

An important objective of trademarks is to avoid customer confusion about the source or origin of goods and services. This means if you wanted to choose a name that was already registered, it wouldn’t be enough simply to make slight adjustments to the name (such as in the spelling or add an extra word) in order to avoid clashing with an existing registration.

The broad scope of protection of trademarks looks at the issue from the customer’s point of view. Without the legal protection of trademarks, consumers cannot rely on finding products and services they’ve liked in the past and want to use again. If the names are too similar, the customers can be confused and disappointed if they mistakenly purchased the wrong product.

Company and domain registrations are not enough

Owning a company name or domain name does not automatically give you a right to prevent others using a similar name. Even if you have registered the .com of the name or limited company, you will still need to check the trademark register first.

You may well be able to use the company or domain name you’ve registered, provided you don’t use it in competition with an existing business that has trademark rights in the name. It depends on the business activity you want to use it for and whether you will have a legal problem.

There is a difference between registered and unregistered trademarks.

It is not necessary to register a trademark in order to use a name. But there are serious downsides to not registering a name. For example unbeknown to you, someone else may have registration which prevents your using the name, or someone else might begin to use the same name or register it first.

If you have been using a name for a long time, you may have built up sufficient rights in it to be able to stop another party using the same name on the grounds that they are ‘passing off’ their business as yours. Bear in mind though, that it costs time and money to take action in these situation and you face all the uncertainties of litigation.

Trademarks are territorial

Trademarks are registered on a country-by-country basis. So if you register a trademark with the UK Intellectual Property office, it will give you the rights to use your mark in the UK. But if someone based in another country uses the same mark, your UK mark does not give you the right to stop them.

Trademarks comprise certain categories of goods or services

Names can be shared by more than one business, provided the businesses are not in competition with each other. The reason for this is that trademarks are registered against classifications, and you are permitted to use the trademarks for those predefined categories of business.

There are 45 trademark classes in all. The overriding issue is that the names must not cause confusion to consumers looking to buy products or services.

Famous marks are an exception to the classification rule

A famous or well-known mark may enjoy broader protection than an ordinary mark, in view of its widespread reputation or recognition. Such marks are not subject to the classification restrictions.

The objections to applications trying to register famous marks in different classes is that the applicant is taking unfair advantage of the mark’s fame and its use could have a detrimental impact on the well-known trademark.

These consideration need to be understood before choosing a brand name. To learn more, read ‘Legally Branded’ written by Shireen Smith.

 

Hasbro Trade Mark Infringement Claim Stops Launch

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Alleged infringement of the TRANSFORMERS trade mark recently sparked a dispute between the leading computer technology company Asus and Hasbro, a multinational games business.

Hasbro is the maker of a line of toy alien robots named Transformers, able to disguise themselves as automobiles. The Transformers universe features two warring factions of these robots: the Autobots and the Decepticons. First introduced in 1984 the robots have, in the course of nearly thirty years, spawned comic books, animated TV series and a live-action movie franchise.

Filing suit for trade mark infringement, Hasbro alleges that Asus’ release of the Transformer Prime laptop takes advantage of the trade mark in order to make money, a representative stating that ‘Hasbro continues to aggressively protect its brands and products and the specific actions we are taking today against Asus underscores yet again Hasbro’s willingness to pursue companies who misappropriate our intellectual property for their own financial gain.’

So, why is a toy company concerned about a consumer electronics business using the word TRANSFORMERS?  After all, there seems to have been no quarrel between Hasbro and Boots over registration of TRANSFORMERS for cosmetics. How likely are consumers to be confused into linking Asus to the Autobots?  Tablet devices and toys do seem quite far removed from each other.  However, the combination of TRANSFORMER and PRIME does offer some support to Hasbro’s case as discussed below.

Asus has used the word TRANSFORMER when naming its products in the past, releasing the Eee Pad Transformer tablet device at the beginning of January. However, this time round the addition of the word ‘Prime’ has given rise to suspicion, as the leader of one of the robot factions is a character called ‘Optimus Prime’. Hasbro is not sure that this is just a coincidence.

Included in Hasbro’s trade mark portfolio are registrations and applications for the trade mark TRANSFORMERS PRIME in various jurisdictions.  While not yet registered in the US, Hasbro does own UK and European registrations for these words, originally filed in June 2010.  TRANSFORMERS PRIME is clearly a much closer match than just TRANSFORMERS, but is not registered against tablet devices.  It remains to be seen whether the notoriety of the TRANSFORMERS brand will tip the case in Hasbro’s favour despite differences in the goods sold under the mark.

Techweek draws a parallel between the tablet and the robots, noting that ‘the major selling point of the Asus Transformer Prime is that it converts [transforms?] into a form that closely resembles a laptop when the keyboard dock is used’, so mimicking the Transformers’ ability to disguise themselves as vehicles.  Still, the word ‘transformer’ is somewhat descriptive in this context, arguably referencing the functionality of the product rather than ripping off the robot franchise.  Dailytech further observes that ‘The Transformer Prime doesn’t convert into a truck, and the Transformer toys don’t offer the Android operating system with apps and Web-browsing capabilities.’

Asus claims that internal studies have shown ‘no issues’ with its use of the Transformer brand indicating an intention to stick with the name, but if Hasbro has its way it could be some time before the tablet reaches consumers.

Barbie and Bratz – The Story Continues

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MGA Entertainers Inc. and Mattel Inc, the creators of the Barbie and Bratz dolls are set to restart their court battle which occurred initially back in 2004, when MGA first brought out their new Bratz dolls. Since the introduction of the Bratz dolls in 2001, MGA managed to sell $3.3 billion dolls and related products, and made $292 million in profits. With the introduction of the rival dolls, Mattel has suffered a loss of nearly $400 million in profits from their Barbie dolls.

Background

The original case was started because Mattel Inc. the maker of the Barbie dolls accused MGA of stealing their intellectual property in the Bratz dolls concept. According to Mattel the Bratz dolls were created by Mattel’s staff member Bryant. Therefore, Mattel claimed that MGA had used Bryant’s work, whom they had hired away from Mattel and had come up with the sketches for the Bratz dolls while still working for Mattel. Mattel accused MGA Entertainment of a conspiracy with Bryant to steal the idea for the Bratz dolls while he was still working for them.

MGA opposing the verdict

In 2008 Mattel had been awarded $100 million from the legal battle by a judge in South California, and the trademark for the Bratz dolls was transferred over to Mattel. However, in this new case MGA is moving to oppose the verdict of the last jury, claiming that Mattel had hidden evidence in the previous case. Bryant claimed that he came up with the idea when on an eight- month hiatus from Mattel, which were then shown to MGA Entertainment. The attorney fighting for MGA claimed that it was only when Mattel’s profits suffered due to the competition, did they move to crush the opposition.

Two sides to every story

She states “There are really two sides to every story, after the Bratz dolls became an international hit, and after Mattel’s attempts to imitate them with its massive creative genius flopped, Mattel ruthlessly used its power to keep retailers from carrying Bratz.” However, the Mattel attorney Quinn declared, “We will prove to you that Bratz was created in Mattel’s design center, using the same people assembled to create Mattel’s toys, including Barbies. We will prove that Bratz was created by Mattel, secretly stolen by MGA, and MGA took Mattel’s design and with it took Mattel’s sales.”

And this is the crucial point of this court battle namely whether the Bratz doll was indeed created in the course of employment – since, this is the exception to the general principle that all rights in a created work initially vest in the creator. When the work is created in course of employment, the rights in the work, such as design rights or copyrights, are owned by the employer.  It remains to be seen how the court will assess the new arguments alleged by both parties.

With millions of pounds having been spent in legal costs by both Mattel and MGA in this battle, there is a lot to lose. However, according to toy- industry watchers, the Bratz line is no longer as successful as it used to be. Sean McGowan, a toy- industry analyst states that if Mattel win “they get a shoddy brand that is a shell of itself”  and MGA themselves have been crippled trying to fight off these accusations.

If this were a UK case, I would want to find out more about Bryant’s 8 months’ break in employment, and whether he was subject to any restrictive covenants. There may be lessons to learn there in terms of how to avoid intellectual property disputes.

For earlier posts see ‘Mattel Stops Bratz in the US’ and ‘Award disputed in Barbie Infringement Case

Trade mark opposition by London Underground

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Trademarks are registered against classifications, meaning they permit you to use the brand for certain pre defined activities. You set the business categories you wish to use for your trade mark in your application. This means the scope of your rights in the name or logo is limited.

There are 45 classes of goods and services with thousands of descriptions in each class so it is quite common to have the same names registered by businesses operating in different classifications – that is, business areas.  Evidently for the public there is unlikely to be confusion between, say, a law firm that shares the same name as a chemical factory.

London Underground

TFL have registered a number of trade marks for LONDON UNDERGROUND including for the logo UNDERGROUND.  One of their latest registrations for UNDERGROUND was an EU mark granted in April this year. This mark is registered for rather surprising classifications for a predominately transport service, such as a nail products.  They also cover café bar and restaurant services in their applications.  It seems likely that TFL are not actually using their mark for all these classifications.

 Nonetheless, the Underground Restaurant, a business organising supper clubs across London, found their application to register a trade mark opposed by TFL on the basis that ‘confusion could arise’  in the eyes of the public.

Lock out

Some trade mark owners try to lock out others from classifications by registering in a number of classes.  For example, Red Bull chose to register in all 45 classes with the clear intention of not sharing their name with non competing businesses.  But trade mark owners that do not use a classification for 5 years may be challenged for non use. 

So, TFL has 5 years to begin to use its UNDERGROUND trademark registration.  Having registered in 2010 it will be valid for restaurant services for the next five years.

 Brands of reputation

Once a brand becomes well known different rules apply.  Their reputation allows them a wider scope, including to prevent non related businesses sharing their name.  If others are taking unfair advantage of their name, or it would be detrimental to the brand for others to use the same name, such applications to register would not succeed.  For example although TWITTER is widely known as a social media interface and has registered a trade mark for this activity, they have been able to thwart attempts by others to register the mark TWITTER for bird feed, drinks fitness information and precious metals. 

TFL is using similar arguments in their letter to the owner of The Underground restaurant stating our ‘Client is also concerned that your use of The Underground Restaurant trade mark could be detrimental to our client’s brand’

 Interestingly, however, unlike the word TWITTER which is clearly a fanciful concoction, the trade mark UNDERGROUND is both a logo, which should diminish the power of the word element, and UNDERGROUND is a generic term, and arguably descriptive.