Important Trade Mark Considerations During COVID-19 and Beyond
Date Posted: Thu, 14 May, 2020
In our recent Business Continuity Survey, we observed a de-prioritisation around compliance and legal matters as companies admitted to fire-fighting to survive in a pandemic. Activity around immediate financial concerns flooded the corporate to-do list understandably and only 14% of companies stated that legal and compliance considerations were a current priority.
Here, BBG Member Kate Symons, owner of Symons Intellectual Property LLC provides her expertise and a case study to clearly demonstrate a potential scenario for an SME during this disruption. We are keen to highlight this area to the BBG membership to avoid long term issues around trade marks and licensing:
There are no two ways about it, COVID-19 is impacting us all, one way or another, and for the most part, not in a good way.
This pandemic may hurt some businesses, but it will open doors for others, and a successful business can weather this storm if it demonstrates flexibility, adaptability and diligence.
From a trade marks perspective, if a business is transforming the scope of its commercial activities to survive in this current climate (e.g. offering new products or services), it is important to consider how this will impact the brand, so as to ensure it is not exposed.
If the brand or trade name is not fully protected (by way of trade mark registration) for all of the goods and/or services that is offered for sale under it, this could lead the door wide open for third party conflicts.
The first question a business should resolve to answer is, is its brand name available for use [and registration] for the extended activities of trade?
Let us consider for a moment the following scenario:
Company “A” has a valid UAE trade mark registration to cover flowers because it sells flowers in a boutique under the brand “Bliss”. The pandemic prevented the ability to trade due to the lockdown, so it was forced to channel trade solely through its website. It swiftly starts a flower delivery service and sales are going well. It then expands its product range to complementary goods such as chocolates and vases.
Company “A” does not have trade mark registrations in the UAE to protect the brand “Bliss” for flower delivery services or chocolates and receives a complaint from Company “B”, who has a valid UAE trade mark registration for the same trade mark “Bliss” for chocolates.
In order to avoid an action for trade mark infringement, Company “A” decides to cease all further use of “Bliss” and destroy all of its chocolate products bearing this brand.
Had Company “A” carried out a trade mark search of “Bliss” for the extended activities at the outset, it could have easily avoided the significant costs associated with the manufacturing, packaging and advertising of the chocolate products it can no longer market.
In my experience, clearance searching is widely overlooked and under-utilised and yet, the cost and damage that can happen, should a successful complaint surface later down the line, far outweighs the relatively minimal cost of just dotting the ‘I’s” and crossing the “t’s” in the beginning.
Surprisingly, trade mark registration is also often placed at the bottom of SMEs “to do” list and in the UAE, it is not hard to see why, as the official fees rank as being some of the highest in the world.
Pleasingly, however, the UAE Ministry of Economy recently took the initiative (on 5th April 2020) to announce a reduction of its official fees in relation to trade marks. Whether the slashing of fees was already in the pipeline, or if it came to pass because of COVID-19, the timing of the announcement is commendable. Brand owners will now benefit from a reduction of around US $600 to register a trade mark. Hopefully, this may open doors to the SMEs that previously could not justify this outlay.
While businesses will understandably be looking to cut corners in the current climate, it can often prove a false economy.
Coming back to Company “A”, in the initial process of obtaining trade mark registration, to save on costs, it elected to protect only the core goods of flowers. It turns out that while the flowers are hugely popular, the boxes it packages the flowers in are its main USP. This is evident by the sheer number of counterfeit boxes popping up all over the UAE. Had it taken the extra step to secure a trade mark registration to cover the boxes, along with the flowers, Company “A” would be able to access all available platforms for enforcement, in relation to the boxes. For example, it could file a complaint with the Dubai Economy’s Intellectual Property division to secure the destruction of the fake boxes and penalise the counterfeiters with fines.
A final point to note is that gaps in protection will almost always present a road block when it comes to franchising or licensing opportunities. A franchisee, licensee or venture capital company will seldom invest in a brand that has not been properly registered.
The biggest paradox is that while physically, we are standing still, our businesses and attitudes to how we conduct business are having to adapt and change with the times. Brand protection needs to change with it. A business with a strong brand, that has the right trade mark protection in place, can withstand this crisis and who knows, may even thrive.
Kate Symons is a Chartered Trade Mark Attorney and owner of Symons Intellectual Property LLC -www.symonsip.com. Please contact Kate on 052 890 3087 or email email@example.com