wipr2012weneedtotalk620
1 June 2012TrademarksLeigh Martin

We need to talk about clearance searching

As businesses continue to innovate and to look for unique new brands and marketing hooks, as globalisation persists and localisation experiences a resurgence, and as the number of registered trademarks across the major economies continues to increase, the clearance of trademarks becomes ever more complex and ever more important.

Trademark clearance is, perhaps, one of the most challenging—and, believe it or not, the most fun—assignments for a trademark lawyer to advise on. If done well, it is an area where the four Cs: competence, commerciality, creativity, and communication, really do come into play in equal measure, together at times with the one B: bravery.

The skilled practitioner must not only understand and be able to empathise with what the client is seeking to achieve, but must know the law and have experience of it in practice; for this reason trademark litigators are perfect for the work.

He or she must understand the very essence of the legal question that is being posed, must appreciate that every potential opponent to an application is a potential litigant seeking a court order to stop the new product dead in its tracks and, in giving commercial advice, must be able to identify and assess the client’s likely practical exposure.

There is also the potential public relations risk to appreciate, the possible internal client sensitivities to understand, the creative team to work with, and general counsel to help. What a marvellous mix, in view of how different most lawyers and marketing executives are from each other: one, typically, a can-do sales-oriented creative interested primarily in the sell, the other, typically, a risk-averse professional who deals daily with claims.

But it is essential that we do work together to build trust, confidence and understanding; to avoid the perception of each search resulting in a frustrating ‘no’ from the lawyer every time a risk is identified; and to avoid the lawyer’s temptation to say ‘yes’ when under pressure to be commercial. Instead, it is crucial that there is real communication, that genuine value is added, and that decisions are made in full knowledge of possible consequences.

Meaning and connotation

We are not only talking about clearance in the light of prior third party rights, and advice as to what is, and is not, distinctive. There are times when it is important to understand the meaning, and the possible connotations, of marks in different cultures.

There are numerous well reported instances of this being overlooked, and of product launches going embarrassingly and expensively wrong.

But there are also a great many unreported cases where clearance has been considered and addressed effectively—for example, the growing (now global) professional services firm that, in preparation for its entry into China, lightened the shade of blue it had used for many years on its corporate branding due to its previous dark blue colouring being associated in China with sombre occasions such as funerals and death.

Many of the larger search companies now offer linguistic screening services, in addition to the various locally sourced options available to trademark practitioners and their clients. The key, as with all searching, is to address the issue early on, before too much is invested in the final choice.

Common issues and tactics

In the UK and the EU, complexity is added to the legal analysis by the fact that the Office of Harmonization for the Internal Market (OHIM) and the UK Intellectual Property Office (UKIPO) will not object to applications on relative grounds. This, combined in particular with the habit of applicants to claim full class headings before OHIM, results in a messy community trademark (CTM) register littered with clashing marks.

It is a classic, but utterly unforgivable, mistake for an advisor to give comfort on the basis that, as there is a large number of conflicting and similar third party marks, it will be fine for the client to add, and use, another one. The legal reality is, of course, that the risk is simply multiplied. Getting this wrong can lead to considerable discomfort and cost for both attorney and client.

“Clearance is an area where the four Cs: competence , commerciality, creativity, and communication, really do come into play in equal measure , together at times with the one B: bravery.”

Another complicating factor for companies wishing to launch and do business in the EU is the fact that they have to navigate not only registered rights at the EU level, but also national registrations and national unregistered rights across 27 different countries. Unfortunately, the maxim that ‘in the EU we have harmonisation in 27 different ways’ rings somewhat true, the result being that it is difficult to assess risk across borders in the EU to any meaningful extent without a significant budget.

Faced with this, many companies manage their spend by obtaining full availability searches only for the most important EU country (or countries), which would include CTMs and also international registrations designating the CTM and the specific country, and then taking their chances on the basis of less sophisticated searches or no searches at all in respect of national rights in other EU countries.

Device marks add another dimension in the EU due to the ability to register graphical works as designs.

This means that any clearance search for a device mark in the EU must include the community design register, the UK designs register, and any other similar registers in the EU—a hazardous task given the limited tools available for searching designs and given also the system of classification, in which it is the applicant who chooses the class and subclass into which the design will go, but where the class/subclass under which a design is registered is unimportant for questions of infringement.

Because design searches are carried out and paid for by reference to class and sub-class, there is little real choice when searching for prior designs but to rely on the judgment of prior design right holders when they selected their class—unless one wishes to incur the time and expense of searching across every class.

The trademark register in the US is much more reliable given the scope for relative grounds refusals by the US Patent and Trademark Office (USPTO) and use requirements for maintaining registrations. China also has a system of relative grounds objections, although unfortunately for English language marks in China, it seems that descriptive words forming part of a mark can be given trademark significance.

Consider a recent case in which a mark applied for in China included the word ‘Original’, and a third party mark for the descriptive word Original (without any other distinctive element) was cited as the basis for a refusal. It can be difficult to overcome such a blow without consent from the owner of the cited mark.

As Chinese registrations become vulnerable to non-use attacks after only three years, and as the evidential burden is on the trademark owner to prove use if a revocation action is filed, one tactic in China is to file revocation actions against appropriate potential blocking third party marks at the time of filing a new application.

A letter of consent is then sought from the owner of the third party mark; if it is given the revocation action is withdrawn. Provided it is approached carefully, this does not need to be perceived as an unsolicited act of aggression.

Tools, resources and liability

The Internet brings with it an increasing number of tools for searching, many free of charge. National IP offices continue to move their databases online for all to access. The TMView project in the EU, funded by OHIM, which already links to the databases of 17 member states plus OHIM and the World Intellectual Property Organization (WIPO), is becoming ever more useful; so much so that after a little training, companies can now do much of the initial screening work themselves.

However, access to all and ease of operability brings its own issues, including the risk of overly simplistic searches and insufficiently informed assessments. It is important to keep in mind that an initial screening search is just that, and no substitute for a comprehensive search and review, with considered professional advice.

In fact, comprehensive reviews should always be discussed, even if they are, ultimately, decided against by the client. Even when a client simply asks its trademark lawyer to file an application and does not request clearance searches at all, the lawyer’s duty (in the UK, in any event), which is to highlight risks to enable the client to avoid or reduce those risks, still extends to advising in relation to all legal pitfalls reasonably connected with that application including, therefore, possible infringement risk.

The reality is, of course, that these legal duties of care only correspond with what ought always to be good practice in enabling a prospective brand owner to make informed decisions.

Working together

What it comes down to in the end is mutual trust and effective two-way communication. It is crucial that (i) the practitioner understands what his or her client is seeking to achieve and is sensitive to any internal dynamics; (ii) the client is educated as to what is involved in clearing a mark and how problems might manifest themselves; (iii) client decisions as to the level of searching are informed ones; and (iv) the trademark lawyer and client work together as a team.

All of this will enable the client to select the brand, protect it, and then build the desired value in it.

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