In the fourth part of our series on contract management pitfalls, we look at the risks arising out of varying the terms of construction contracts.
Last year there was a report on the registration and use of the “Co-operative” brand by Urban Outfitters as part of an urban exclusive fashion label. No doubt an attempt by the American fashion chain to take advantage of the “aura” and reputation associated with the co-operative movement and its long established brand.
As with any business, your brand is one of your most important assets. It is not just your trading name, but also the “look and feel” of your business – it is the way customers identify with what you do and part of the personality that attracts them to it. Brand misuse can be particularly damaging in situations where someone working under your brand provides an inferior service, or has a way of doing business that conflicts with standards set by the brand owner. The customer associates the sub-standard experience or conflicting ethos with you and your business, resulting in a loss of customer loyalty that could take years to revive.
Intellectual Property Protection
In the UK, it is possible for brand owners – including those who run social businesses - to rely on a range of intellectual property rights to protect different elements of their brand, including copyright protection in logos, short pieces of music, packaging or labels, registered or unregistered design rights in different design aspects, patents in inventive products and domain name protection. However, the most common and effective form of brand protection is provided through the UK system of trade mark registration. Trade marks cover not only pure text, but can include any distinctive colour, typeface, font, stylisation and any incorporated images or logos.
A registered trade mark provides you with an exclusive right to use the registered name or logo in relation to the relevant services. This means you can prevent anyone using the same or a similar name in the same or similar line of business. An important feature of trade mark infringement is that in a straightforward case, you don’t have to show that the use of your mark caused any confusion to the public and so a claim will often be cheaper and easier to pursue.
Unregistered trade marks can be protected via a court claim for “passing off”, which requires that:
- your business has acquired “goodwill” (a brand that is worth something) or a reputation in the market and is known by distinguishing features;
- someone misrepresents (whether or not intentionally) that goods or services offered by them are yours; and
- you will, or are likely to suffer, damage as a result of this misrepresentation.
In contrast to trade mark infringement, a key element of a passing off action is to show there is a likelihood of confusion within the relevant sector of the public.
Beyond the UK
Intellectual property rights are territorial in nature and only provide protection in the jurisdiction in which they are created or registered. It is therefore advisable to check the protection available in each country before any brand launch outside the UK. There nevertheless remains an ongoing drive towards global harmonisation of Intellectual Property Rights. It is already possible to secure some rights (such as trade marks and patents) across Europe and worldwide and further some countries, after compliance with local requirements, may even agree to extend existing UK rights within their jurisdiction.
Finally, if you are setting up a new business, you need to take care (and do some investigation) to avoid adopting a style that is reminiscent of a popular brand in your area of activity, or a mark that is identical/similar to a registered trade mark. “Imitation being the sincerest form of flattery” is unlikely to hold much sway with the brand owner.
Sarah Webb is a Partner and Head of the Governance and Commercial team at Anthony Collins solicitors - an expert in all areas of intellectual property, she advises clients regularly on the exploitation, protection and enforcement of IP rights as well as complex ownership disputes.
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