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1 May 2015Trademarks

Well-known trademarks: Your reputation precedes you

It is highly likely you are familiar with the Ford motor company. Its logo, with the word ‘Ford’ spelled out in joined-up white writing against a blue background, is an established symbol across the word. The contribution of Henry Ford and the Model T to US industry has a secure place in history, and its employment of 166,000 people across 65 plants throughout the world means its present position also seems assured.

But for Rospatent, Russia’s intellectual property office, Ford’s reputation was not strong enough for the company to obtain “well-known” status in Russia: in March 2014, its application for a well-known trademark was rejected.

A year later, Russia’s Intellectual Property Court ordered the case to be reviewed again, which raises the question of what constitutes a well-known brand in any single jurisdiction.

Obtaining well-known status can be important for trademark owners. The World Trade Organization’s TRIPS Agreement allows signatory states to grant an exclusive right to well-known brands to protect their trademark across all classes, even if their goods or services don’t apply to them. Such trademarks also do not need to be renewed.

How famous a company is within one jurisdiction is very difficult for national IP offices to measure. In the absence of concrete criteria, offices have to devise their own methods for establishing what is a well-known company in their jurisdiction.

The example of Ford reminds us that translating the popularity of a brand from jurisdiction to jurisdiction can be tricky. Eugene Arievich, partner at law firm Baker & McKenzie, admires the specialised IP court because it is not afraid of “making Rospatent angry” by reversing its decisions.

“It’s a great court. A very brave court, too. It’s never shy to overturn decisions. In nearly two years of operation I have seen no case of bias. Litigation against foreign parties has been extremely fair,” he adds.

Of the 149 brands that have achieved well-known status in Russia, almost half are foreign. Familiar Western brands such as Coca-Cola, Chanel, Nike and Cartier rub shoulders with established Russian names such as Lada, the automobile made famous during the Communist era.

What constitutes well-known?

Well-known is a subjective term, but there have been attempts by the Russian authorities to define it. Rospatent sometimes commissions opinion polls which, Arievich says, are the most “persuasive” feature for Rospatent when considering an application for well-known status.

But these have to be “legally defensible” and cover a broad scope of the population over a “justified geographic span” rather than just relevant parts. Ford’s application to Rospatent initially suffered from a lack of evidence, says Arievich.

Defining well-known is a problem that also exists in other jurisdictions. Richard LaBarge, partner at law firm Marshall, Gerstein & Borun, says the US system operates on whether a brand is a “household name”. Inevitably, this produces problems for brands in a country as diverse and large as the US.

Unlike in Russia, in the US Ford perhaps benefits from being an industrial bastion that has a long history. LaBarge says other companies that have spent many decades sitting in the public’s imagination also benefit from this system. He says the US Patent and Trademark Office (USPTO) looks at “how long a company has been around” when measuring its fame.

For modern companies, however, the question is trickier, as LaBarge explains. “If the company hasn’t been around for more than a year then you might find it too hard to establish yourself in the eyes of the USPTO. I don’t think the USPTO is particularly sophisticated at looking at evidence of online use as an indication of what people are familiar with, so they tend to look at traditional advertising dollars, rather than online presence,” he says.

“Proving fame of a modern company using an online presence instead of bricks-and-mortar stores will be tricky.”

This highlights a problem with measuring the fame of a brand in the US. Foreign companies can establish themselves in the minds of US consumers through online channels and develop a fame that may not require bricks-and-mortar stores, but when attempting to achieve well-known status, foreign companies have struggled.

“I don’t enjoy going on the record saying this, but I think there is a prejudice against foreign brands at the USPTO in attempting to register well-known status,” LaBarge says.

India

In 1999, India adopted the Trade Marks Act as part of its own process of harmonising domestic law with the World Trade Organization’s TRIPS Agreement. Under the act, trademark owners are able to attain well-known status without having to register their rights with the Indian Trade Marks Registry. It also gives them grounds to oppose trademark registrations that may confuse consumers with their well-known status.

“If the company hasn’t been around for more than a year then you might find it too hard to establish yourself in the eyes of the USPTO."

But it has not always been a smooth ride for established brands. In 1987, Nestlé’s application to register ‘Kit Kat’ as a trademark was rejected by the Trade Marks Registry. Shortly afterwards, a food company called Kolkata attempted to register ‘Kit Kat’ as well, but this was also rejected.

In 2013, the Intellectual Property Appellate Board dealt with appeals from both applicants, before falling on the side of Nestlé after having recognised its use of the mark outside India from as early as 1935. Nestlé also supplied further evidence of invoices and export sales, which made a convincing argument that more people associate ‘Kit Kat’ with the Swiss chocolatier than with the food company Kolkata.

In February 2014, Microsoft, represented by law firm Anand & Anand, was granted well-known status in India following a trademark dispute with Kurapati Venkata Jagdeesh Babu. In order to persuade Judge Manmohan Singh, Microsoft submitted detailed invoices and Whois records of its domain names containing the name Microsoft.

Singh said: “It is the case of the plaintiffs that ‘Microsoft’ is well known and enjoys a stellar reputation all across the world. Therefore, if that segment of the public which uses the products/services/domain name of the plaintiff under the well known trademark ‘Microsoft’ comes across similar products/services/domain name bearing the trademark ‘Microsoft’, it is likely to believe that the said products/services/domain name have a connection to the plaintiffs.”

It means Microsoft joins big Indian companies such as Tata Group in having well-known status.

Singh said: “As per the material placed on record ... it is evident that the trademark Microsoft is a well known trademark. The same is known to most people in the entire world. No-one is entitled to use the same either as a trademark or part of its trading style/corporate name in relation to similar or dissimilar business as the said trademark has a unique goodwill and reputation.”

A notable aspect of this case was the absence of the defending party during the proceedings. Singh awarded Microsoft damages of 20,000,000 rupees ($320,000) and a permanent injunction against the opposing party’s products. A similar incident happened to Microsoft in 2007 when, in a passing off claim filed against an individual called Rajendra Pawar, the defendant did not turn up to legal proceedings.

In the ruling, the judge presiding over the case said: “Perhaps it has now become a trend of sorts, especially in matters pertaining to passing off, for the defending party to evade court proceedings. Those who recklessly indulge in such shenanigans must do so at their own peril, for it is now an inherited wisdom that evasion of court proceedings is not de facto tantamount to escaping liability.”

At the centre of being a well-known brand is a dilemma. While it provides companies with extended trademark rights, it also burdens them with a responsibility to be constantly vigilant about abuse. Big brands are big targets for those looking for what might be easy money.

In the global economic environment, reputation can often travel fast. An emerging company in the US may find it has the attention of Indian consumers before it has begun to think about expanding its enterprises, and the internet accelerates this. Where once the likes of Ford and General Motors took decades to establish themselves as major market players, Facebook and Google have done it in less than a decade.

While measuring what is well-known is always going to be difficult—considering its inherently subjective nature—the likes of Russia’s IP court and India’s IP laws show there is an openness towards recognising fame.

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