Trademark right means that the owner is entitled to prevent others from using the same or a similar trademark with respect to the same or similar products. The Coca-Cola Company, for example, could prevent another soft drink manufacturer from using the trademark Koka-Kola.
The most fundamental function of a trademark is to be an indicator of origin so that consumers know that products A and B are manufactured by different companies. Trademark infringement occurs when there is a “likelihood of confusion” regarding the origin of the product. If there is no likelihood of confusion, there is usually no trademark infringement. There are circumstances where it is possible to use another company’s trademark without infringing it. These are the most common situations:
1. Descriptive use
A registered trademark can be used in a descriptive sense. For example, when Apple introduced its ultralight laptop “MacBook Air”, Samsung’s response was to advertise their own ultralight laptop as “lighter than air”. A company cannot prevent other companies from using a trademarked term to describe the other company’s products. Particular care should be given to the fact that the other company is using the trademark descriptively, and not as a name of their own product. The latter would constitute an infringement.
2. Indicating compatibility
There are many products that contain replaceable parts. For example, it is common that razors have replaceable blades, printers have replaceable cartridges, and phones have protective add-on cases. It is also common that there are many different companies manufacturing these parts. It is possible to use another company’s trademark to indicate compatibility when it is necessary in order to indicate the intended purpose of the product. If you make replacement parts, you should also be aware that your product does not infringe any patents of the original brand owner.
Replacement parts are commonplace in many markets. A coffee producer might make pods that are intended for Nespresso coffee makers and it could inform on the packaging that the coffee pods are to be used with Nespresso coffee makers. A blade manufacturer has the right to inform in the packaging that the blade is compatible with Gillette handles. If there is, for example, a commonly known technical standard that can be used to convey the full and necessary information about the intended purpose of the product, then that should be used instead of another company’s trademark. In particular, with respect to consumer goods, it is not common to have such commonly known standards. A coffee producer could perhaps replace “Nespresso” with “to be used with coffee makers corresponding to technical standard EU:XUSHD_18376” (invented), but an average consumer would most likely not know that the pod could be used for a Nespresso coffee maker.
The same is true for retail, repair and installation services. A car repair shop, for example, has a right to inform the public that they repair “BMW” cars. Alternatively, they could say that they repair German-made cars that have three letters in the name, but that would not be a very convenient way of conveying the same information.
Whether another company’s trademark is used descriptively or indicating compatibility, all such use must be with “honest practices in industrial and commercial matters”. In practice, this means that:
- it is not done in a manner that gives the impression that there is a commercial connection between the company and the trademark owner
- it does not affect the value of the trademark by taking unfair advantage of its distinctive character or repute
- it does not discredit or denigrate the other trademark
- the product is not portrayed as an imitation or replica of the product bearing the original trademark
If these conditions are met, the use of another company’s trademark is permissible in these circumstances.
3. Comparative advertising
Another company’s trademark can also be used when comparing two products. For example, when Microsoft makes a new computer it is entitled to compare it to other computers (e.g. MacBook) provided that certain conditions are met. In the EU, these conditions include the following:
- the use is not misleading;
- the comparison is made between goods meeting the same need or having the same purpose;
- it compares one or more relevant and verifiable feature of those goods (e.g. price);
- does not discredit or denigrate the other trademarks;
- it does not take unfair advantage of the reputation of the other trademark;
- does not present goods or services as imitations or replicas of goods or services of the other trademarked goods;
- does not create confusion between the marks
The above list is slightly simplified (see Directive 2006/114/EC, Article 4). Comparative advertising is a legal minefield, so it should not be undertaken without legal advice.
There are certain circumstances where using another company’s trademark is allowed. Even so, startups and SMEs should be very careful in adopting this approach, as it contains a lot of legal risks and larger companies are highly protective of their trademarks. For example, the litigation that finally confirmed that a Finnish company LA-Laboratories had the right to refer to the Gillette Sensor trademark took seven years. Although they were cleared in the end, they were tied up in terms of time and money because Gillette decided to sue them for trademark infringement. Such a protected suit is a huge financial and existential risk for any startup. So it might be better to be wise than right and leave other companies’ trademarks alone.