If you run a small or medium size business, you have to work hard to become an established brand and to enjoy a level of trading success. Part of your business is likely to rely on a recognisable name or logo, which you have carefully cultivated and which allows you to be distinguished in your market. If you then receive a legal letter notifying you that this name is breaching an existing trade mark, what are your options?

‘Many businesses will naturally be intimidated, especially if this comes from the legal department of a household name company. But the recent case of SkyKick UK Ltd v Sky Ltd illustrates that not all registered trademarks are automatically considered fair, and sometimes David can stand up to Goliath,’ says Simon Bean, Head of the Dispute Resolution team with Wollens. ‘A trade mark has to be used genuinely in the area of business that it was registered for. It is not permitted to register a trade mark that you do not intend to use in order to prevent competitors from using it and to monopolise the market.’

It is important to seek legal advice promptly when you receive such a letter and our dispute resolution solicitors will look at whether the other organisation might have  registered the trade mark in bad faith, or whether there is another reason that it cannot be enforced, even if officially registered.

Simon looks at this case in more detail, and how it may be able to help you if you find yourself on the receiving end of a claim for breach of trade mark.

What happened in the Sky case?

Sky claimed that SkyKick had infringed several of their registered trade marks, by using the trade mark ‘SkyKick’ for their email and cloud storage products and services.

However, SkyKick denied infringement on all counts, and challenged the claim by Sky Ltd to these trade marks.

SkyKick were partly successful in their challenge. The UK Supreme Court found that Sky Ltd had applied for some of the SKY trade marks in bad faith, because they covered goods and services which in fact they had never intended to use. The court found that some of the trade marks registered were so wide in their scope that they could not be commercially justified. This meant that they were found to be invalid.

SkyKick’s use of the trade mark ‘SkyKick’ and variations of it in relation to their email migration product and service (‘Cloud Migration’) and cloud storage product and service (‘Cloud Backup’) did however infringe the SKY trade marks that were still considered valid, and the court agreed that where the goods or services were identical or very similar, there was a likelihood of confusion.

This is an interesting judgment and may be helpful for any a business that wants to use a suitable name or brand, but is told this is prohibited due to a trade mark registration. The UK Supreme Court found that despite valid registration, a trade mark could not be enforceable if it was made in ‘bad faith’, because the coverage sought was actually too wide to validly need the protection of a trade mark.

How can a trade mark be challenged?

If someone believes you are infringing their trade mark, you could be subject to one or more of the following:

Cease and desist letter – anyone who believes you are trading using what they have already registered as a genuine trade mark will first issue you with a ‘cease and desist’ letter, telling you to stop using their trade mark. They may also ask for damages (compensation) from you for the unlawful use of the trade mark to date.  A ‘cease and desist’ letter will state what action may be taken if you do not comply and stop the use of the trade mark immediately.

Claim and injunction – If you do not comply with a ‘cease and desist’ letter, then it is likely the trade mark owner will issue a claim against you in court. However, these can take a long time to get to trial and, in the meantime, the owner may apply for an emergency injunction to stop you from continuing the breach until the trial can be heard.  This is used to stop what they will consider to be a dilution of their trade mark and prevent the damage that would occur as a result.

Claim in court – ultimately an entity who believes you have infringed their trade mark will bring their claim to court to adjudicate if you do not concede the infringement. You may be able to challenge a claim even if the trade mark was registered, using the same principles set out in Sky v SkyKick, that a trade mark was registered in bad faith and therefore is not valid. If so, you will also claim damages and your legal costs of attending court. Of course, if you are not successful, there will be consequences to your business and costs.

If you believe that trade mark action against you is brought using a trade mark created in bad faith, it is vital that you take legal advice at an early stage on your options to defend both a claim, and an injunction application. A successful injunction can have a significant effect on your business, even if later at trial it is found that the application should never have been made. The damage may be irreversible by then.

If you trade via an online platform, you might also receive a notice from them.

Takedown notice – an online sales platform, such as eBay or Amazon, may be served with a ‘takedown notice’ by a company that claims you are breaching their trade mark. Sites such as Amazon have to preserve their own legal position, and so may take down your site on the basis of an application by someone claiming a trade mark breach which looks reasonable.

You can appeal this, but this can take time and is not guaranteed to be successful. If you find yourself in this position it is vital that you take advice as soon as possible. If the platform will not reinstate your site or products because a trade mark is registered, we can help you.

When might a trade mark be unenforceable?

There are several criteria that must be complied with when registering a trade mark. The main one is that the trade mark is clear and distinctive, and it must be distinguishable from other similar trade marks.

It must also be distinctive to your particular business. A good example of this is the name Coca-Cola.

It cannot be so wide that it is used generally in the area of your business. For example, you could not trade mark the words ‘computer services’ as this is already widely used.

It also has to be used in the area of business that you operate in, and genuinely be required for your business. It is not allowed to register a trade mark that you do not use in order to prevent it being registered by a competitor and to monopolise the market.

A trade mark must be used regularly, or it can be subject to cancellation.

Importantly, you must sign a declaration on the application form that you have a genuine intention to use the trade mark.

What are the consequences of continuing to use another registered trade mark?

If the other trade mark was registered in good faith, then the consequences to your business of using a name in breach of that trade mark can be significant, and to be avoided if possible. As a minimum, you will be asked to stop using the trade mark. This may mean overhauling your website, changing your packaging and your stationery, and replacing logos

A successful injunction against you will be even more damaging. Not only will the end result be that you stop using the trade mark, but you are likely to have a hefty legal bill and possibly have to pay damages for misuse.

If all of the above is as a result of a claim by a trade mark owner that should not have been able to register that trade mark at all, due to bad faith, this can be challenged and ultimately rectified. However, as stated above, it is vital you act quickly as soon as you are made aware of a potential problem to minimise disruption to your business and reputation.

You can also complete an online enquiry form. One of the Wollens team will contact you as soon as they are available.