Reputation – trademark’s superpower

by | Aug 10, 2023 | Insights | 0 comments

Did you know that trademark protection improves with age? The more you use your trademark, the stronger protection it gets against other trademarks. If your trademark gets widely known and recognised, it may even reach a special status called “trademark with reputation”. It will give you powers that ordinary trademarks cannot give you.

Different levels of protection – distinctiveness of the mark

Not all trademarks get equal protection. We have on several occasions written about distinctiveness being a necessary condition for any legal protection. In addition, for being a threshold for legal protection, it is also an important factor in assessing what kind of legal protection it gets.

According to EU case law, “the more distinctive the earlier mark, the greater the risk of confusion. Since protection of a trade mark depends… on there being a likelihood of confusion, marks with a highly distinctive character, either per se or because of the reputation they possess on the market, enjoy broader protection than marks with a less distinctive character.

For trademarks with low distinctiveness, the challenge is that it is difficult to prevent others from using trademarks that are quite similar. For trademarks that have high distinctiveness, other brands must keep a bigger distance, i.e., the marks must be clearly different.

 

Inherent and enhanced distinctiveness

There are two factors that affect distinctiveness. The first is inherent distinctiveness. Every trademark has some degree of in-built distinctiveness. For example, Xerox being an invented word, has a high degree of inherent distinctiveness. Booking.com, being descriptive, has a low degree of inherent distinctiveness (or even no distinctiveness). 

Every trademark, from the beginning, gets a place in the sliding scale of distinctiveness. You don’t have any control over what that place is. It is determined solely by the in-built qualities of the trademark. That place, however, is only the starting point. From that moment on, your actions have an impact on the distinctiveness of your mark.

The more you use your trademark, and the more people know it and recognize it, the more distinctive it becomes. The higher the recognition of your mark, the more distinctive it is considered. This is called “enhanced distinctiveness”. When assessing whether a mark has enhanced distinctiveness, the following aspects are taken into account:

  • the market share held by the mark; 
  • how intensive, geographically widespread and longstanding use of the mark has been; 
  • the amount invested by the undertaking in promoting the mark; 
  • the proportion of the relevant section of the public which, because of the mark, identifies the goods or services as originating from a particular undertaking;
  • statements from chambers of commerce and industry or other trade and professional associations.

The practical impact of having enhanced distinctiveness for your mark is that you can block other trademarks that you might otherwise not be able to block. I.e., the no-go zone around your mark is larger.

 

Reputation – the ultimate protection for your trademark

If you have used your mark intensively for a long time, it may have enhanced distinctiveness. What’s more, if you can show that your mark has “reputation”, it can enjoy protection even where the goods and services are not similar.

Trademark laws are primarily concerned with making sure that two brands are not liable to be confused with one another. Beyond this, if a company uses a lot of resources to make their brand famous, they get protection for this investment by allowing them to prevent, under limited circumstances, the use and registration of later trademarks that try to take advantage of the reputation of their trademark. In these circumstances, it is not required that there is a likelihood of confusion between the two marks. For example, Google is a trademark with a reputation. Because of this, they could prevent others from using the mark Google for clothing or energy drinks.

This strengthened protection is not automatic. In order to be able to prevent an EU trademark later registration, the owner of the prior reputed mark must show all of the following conditions:

Registered trademark with reputation. The trademark with a reputation must be registered. It is not possible in the EU to claim to have a trademark with a reputation that is not registered. Also, the owner must show that the mark has reputation. For a trademark to have reputation, it must be known by a significant part of the trademark’s target audience. There is no fixed percentage that is required for a mark to have reputation. It is an overall assessment of all the evidence. To show that a mark has reputation, it is generally required to demonstrate that the mark has been used intensively for a long time, and the owner has spent considerable resources in promoting the mark. Consumer surveys are often the most persuasive pieces of evidence. Reputation must exist at the time of filing of the later trademark. 

Similarity of trademarks. There must be some similarity of the trademarks in question so that the target audience makes a connection between the marks. The similarity required is less than in normal cases of likelihood of confusion. The only thing that is required is that the older mark brings the reputed trademark to mind. They do not have to be so similar that they could be confused with one another. If the later mark brings the mark with reputation to mind, this condition is satisfied.

Unfair advantage of or detriment to the distinctiveness or reputation of the mark. Here there’s two alternatives. If somebody started using the trademark Google for clothing, they would clearly take unfair advantage of the reputation of a famous mark. The same thing if somebody started making headphones called Coca-Cola. This would enable them to unfairly benefit from the attractiveness and recognition of the Google and Coca-Cola trademarks. The second alternative is detriment to the distinctiveness or reputation of the reputed mark. This takes place when the younger mark erodes the uniqueness of the famous mark. For example, if somebody uses the trademark Rolls-Royce for restaurant services, this would reduce the distinctiveness of Rolls-Royce trademark even in relation to cars, because the consumers would now have other associations with the brand, where previously it had only one (cars). Consumers would no longer associate Rolls-Royce only with the car maker. Second type of detrimental effect can be towards the reputation of the trademark. This can take place for example where the reputed trademark is used in a context that is harmful for it. For example, using a vitamin supplement brand name (or a close variation) for tobacco products or a baby food brand name for rat poison would clearly be detrimental to the reputed brands.

In most cases where the owner of a reputed mark fails, it is in establishing the unfair advantage or detriment. Even if the reputed mark is very well-known, unfair advantage or detriment is not automatically assumed. It will have to be established in each case. For example, very recently Rolex failed to prevent the registration of a similar look crown logo because they did not manage to explain how the later crown logo would be detrimental to the distinctiveness or reputation of the Rolex crown logo. 

Also, the conditions mentioned above are interrelated. For example, the higher the reputation and recognition of the reputed mark, or higher the similarity of the marks in question, the easier it is to establish that there is unfair advantage of or detriment to the reputed mark.

 

Final hurdle – due cause

If the owner of the reputed mark has established all of the above requirements, they can prevent the use and registration of a later trademark, unless the owner of a later trademark can establish that they have a “due cause” (legitimate reason) for the registration and use of the later mark. The assumption is that there is no due cause, and it must be established. An example of due cause was when the Belgian mineral water company, owner of a reputed trademark SPA (for waters) could not prevent the registration of a trademark CAL SPAS for spas. The reason was that the term “spa” is completely generic for spa services. Similarly, Apple would not be able to stop a fruit company from using trademark EXE APPLE for apples.

 

Conclusion

Trademarks with reputation enjoy particularly strong protection. This protection can reach even to trademarks that are used for completely different products or services. This also sets them apart from ordinary trademarks, that give rights only against later trademarks that cover similar goods and services.

See related posts:
Trademark pyramid
Ten important trademark concepts and tips and to master
How to assess a trademark’s descriptiveness

 

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