Trademarks in the British Virgin Islands
These calls resulted in the recent release of the exposure draft of the Trade Marks Bill by the Financial Services Commission, which will be a major re-write of the trademark law.
More than 400,000 companies are registered in the British Virgin Islands (BVI), which also have major presences in China and other Asian markets, and the jurisdiction has won favour with many international bodies as the world’s corporate domicile of choice.
The need to protect brand perception is increasing as approximately 350,000 people visit the British Overseas Territory annually who, according to statistics from the World Tourism Organization, have positioned the BVI in the top 10 tourist markets in the Caribbean consistently over the last decade.
There are two primary pieces of legislation regulating trademarks in the territory: the Trademarks Act, 1887, and the Registration of United Kingdom Trademarks Act, 1946.
The latter allows a UK registered trademark (but not a UK registered service mark) to be re-registered in the BVI and to remain so registered with all the rights and privileges attached to it in the UK, as long as it remains registered in the UK.
However, if the trademark is not registered in the UK, because the BVI is not a signatory to any international trademark treaty, including the Madrid Protocol, the best means of protecting a global trademark in the BVI is by registering it under the Trademarks Act.
Primary deficiencies
Although a trademark does not need to be in use in the Territory before registration, and merely having an intention to use the trademark is sufficient for purposes of registration, there are several limitations to registration in the BVI.
The most significant limitation is that service marks are not registrable in the BVI. When making an application for registration the applicant must indicate, among other things, the goods to which the trademark applies. However, because every country may have its own system of classification this is a major obstacle for global trademark owners who may wish to register trademarks in several jurisdictions.
Therefore, the Nice Agreement Concerning the International Classification of Goods and Services was adopted and entered into force on April 8, 1961, with two subsequent revisions. By 1992, 134 jurisdictions around the world were either parties to the Nice Agreement or otherwise adopted the Nice Agreement for use as their national classification system.
However, the BVI is not a party to the Nice Agreement, nor has the international classification established under it been incorporated into its law. The BVI continues with its own classification system of goods. The BVI’s classification system consists of a list of classes which is unaccompanied by any explanatory notes, and there is no alphabetical list of goods.
However, the list of classes describes in very broad terms the nature of goods contained in each of the 50 classes of goods. For instance, the heading of class 9 (musical instruments) implies quite naturally that all musical instruments such as saxophones, violoncellos, banjos, etc, are placed in that class.
Since there are no explanatory notes, related goods that might give rise to doubt as to their correct classification are not given any consideration. However, such goods may be referred to the registrar for determination and the registrar’s decision is final.
Well-known trademarks
Neither the Registration of United Kingdom Trademarks Act nor the Trademarks Act protects the proprietor of a trademark which, although not registered, is well-known. Therefore, unless the owner of the well-known trademark is prepared to register the trademark, the only protection available is under the tort of passing off.
Although the registrar of corporate affairs, who is also the registrar of trademarks, will not incorporate a BVI company if its name closely resembles that of a registered trademark or a well-known trademark, there is no statutory requirement for this and because there is no common law definition of what constitutes a well-known trademark, the practice is highly objectionable.
However, draft legislation circulated for public consultation in 2011 by the Financial Services Commission proposes to address this situation.
An unregistered trademark owner may prevent another person from passing off its goods. However, since there is no statutory protection for service marks, a BVI court is unlikely to extend the classic definition of passing off to cover services, as opposed to just the sale of goods. A claimant in an action for passing off must establish that there was goodwill and misrepresentation.
Comparative advertising
Neither the Registration of United Kingdom Trademarks Act nor the Trademarks Act makes specific reference to comparative advertising, which normally involves the use of the registered trademark, owned or licensed for use by another, by the advertiser to identify the goods with which he wishes to compare his own.
Furthermore, there is no self-regulating body for the advertising industry providing rules relating to comparative advertising. Therefore, it is necessary to rely on the tort of malicious falsehood where it is alleged that statements made in an advertisement are false and made maliciously.
Relief against non-infringers
Infringement does not cover all persons who may come into possession or control of goods bearing spurious marks. Equity, however, will not allow a person with infringing goods in his possession or control to aid the infringement by letting the goods get into the hands of those who may use them or deal with them in a way that will invade the proprietor’s rights.
The trademark proprietor can, therefore, seek an injunction against a non-infringer who is in possession or control of the infringing goods. There is no statutory remedy for a person who has bought goods in good faith which bear an infringing trademark or a mark the use of which amounts to passing off.
The common law principle is caveat emptor, and would ordinarily not allow even an innocent buyer to obtain relief against the trader. However, the sale of infringing goods may amount to a breach of the statutorily implied terms that the seller has a right to sell the goods concerned and the buyer will enjoy quiet possession under the BVI’s Sale of Goods Act.
By search and seizure orders under the Eastern Caribbean Supreme Court Civil Procedure Rules 2000, previously known as Anton Piller orders, the court will allow evidence to be seized and secured, pending a hearing. This provides an ‘equitable’ remedy in cases of trademark infringement and is the only real tool against counterfeiters operating in or from the BVI.
Assignments
An assignment is a complete transfer of ownership and, although since 1938 it has been possible in the UK to assign a trademark with, or without, any corresponding goodwill, it is not possible to transfer a trademark in the BVI without the corresponding goodwill unless the trademark registration is based on a prior UK registration.
All that is necessary for the assignment of a trademark registered based on a prior UK registration is a certified copy of the UK certificate demonstrating the assignment in the UK along with the necessary authorisation appointing an agent in the BVI. However, to transfer a registered trademark not based on a prior UK registration there must be a deed of assignment signed by both the assignor and the assignee.
It is advisable that a general assignment agreement be entered into by the trademark owner and the assignee requiring both parties to execute such other documents as may be necessary to effect the assignment in any jurisdiction where necessary. This should then be followed by a simple deed of assignment governed by BVI law.
Conclusion
As a service-oriented economy, the BVI produces few goods. To meet consumer needs the society relies heavily on imports, primarily from the US. However, the BVI does not allow registration of service marks. Trademark owners must, then, rely on cumbersome common law rules for the protection of their various rights or on recently-questioned practices attempting to circumvent this limitation.
It is expected that the focus group appointed in January 2010 will conclude its work shortly to provide a more modern regime for the registration and protection of trademarks.
