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IP battles: David vs Goliath

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In an intellectual property dispute, size doesn’t always matter. McDonald’s made the news in January when the fast food giant lost its trademark in the EU; but it is not the only case when David has taken on Goliath in court – and won. So what can we learn from these stories?

David Goliath IP business

McDonald’s vs Supermac’s: use it or lose it

McDonald’s lost one of its most iconic trademarks [in the EU] in the latest round of litigation with the Irish family-owned restaurant chain Supermac’s. The European Union Intellectual Property Office (EUIPO) ruled that the evidence filed by McDonald’s was insufficient to establish genuine use of the trademark within the EU and duly ordered its revocation.

Supermac’s brought the challenge arguing that the McDonald’s registration of Big Mac as an EU trademark was not done for genuine trademark purposes, but for the purpose of bullying any competition in the burger restaurant market. Supermac’s argued that the McDonald’s trademark had not been put to genuine use during a continuous period of five years following the date of registration. McDonald’s filed evidence purporting to show a wide use of the trademark across a number of member states.

The law states that genuine use of a trademark exists where the mark is used in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services for which it is registered. Genuine use requires actual use, not token use. Regard must be had to all the facts and circumstances to establish whether commercial exploitation of the mark is real.

The burden of proof lay with McDonald’s to prove its genuine use of Big Mac within the EU, or submit proper reasons for non-use. McDonald’s filed three affidavits signed by its representatives in Germany, France and the UK. They claim significant sales of Big Macs, and produced examples of packaging and promotional material, and evidence from various McDonald’s websites. However, upon an examination of the evidence, the EUIPO found it was insufficient to establish genuine use. The existence of the mark on websites was not considered by itself to be evidence of use. Generally, McDonald’s failed to evidence the extent of the use of the trademark. The revocation takes effect from the date of the application which was 11 April 2017. Under the rules, McDonald’s has two months within which to lodge notice of appeal. We expect that it will do so.

Frank Industries PTY Ltd v Nike Retail BV: maybe it’s because I’m a LNDR

In 2018, Frank Industries, a small UK clothing company, was unhappy when Nike – a somewhat bigger business – launched an advertising campaign which used the initials LDNR, explained as an abbreviation of “Londoner”. A potentially very catchy abbreviation – except Frank Industries owns a UK and an EU registered trade mark for LNDR in relation to “clothing” including “sportswear”. Naturally, and in view of the obvious similarity of LDNR and LNDR, Frank was not impressed and started court proceedings shortly after Nike launched its campaign.

Trademark disputes can be lengthy, with court proceedings taking years. Frank, whilst initially seeking an injunction in the High court then chose to sue in the Intellectual Property Enterprise Court (IPEC)  that enabled it to obtain a swift remedy, and helped it successfully take on a company as well-resourced as Nike. This court is designed for smaller disputes, involving claims of damages for up to £500,000, and is justifiably popular with SMEs.

IPEC rules are designed to simplify and speed up the court procedure as much as possible. Applications do not always require a hearing and may be decided on the papers. There is a cap on the number of witnesses at trial and disclosure is limited. A case is meant to last no more than two days. Also, importantly, while costs can be recovered from an unsuccessful opponent, there are relatively low caps on the amount of costs that can be recovered. So if an industry giant should choose to bring in teams of expensive lawyers, it would be doing so at its own expense.

IPEC decided that enough people would perceive LDNR as a brand name for trademark infringement to have occurred. Frank was successful – within only seven months of the infringing campaign.

Brandlogic v Bentley Motors: being driven to trial

Did you know that Bentley Motors made clothing? Well it does – Bentley Motors has produced a small clothing range, featuring the iconic branding, for over 30 years.

Heard of Bentley 1962? It’s a Manchester-based clothing brand that has had a trademark for its products in the UK since 1982. The date refers to the year when Gerard Bentley founded the company to make golf attire. The brand now belongs to a father and son duo, Bob and Christopher Lees, and their company, Brandlogic. They bought the Bentley clothing name and renewed the trademark in the UK in 2009.

Brandlogic has been in dispute with Bentley Motors over using the Bentley name on clothing items since the early 2000s. In 2017, Bentley Motors sought to cancel Mr Lees’ trademark in Britain, but the UK Intellectual Property Office ruled in Mr Lees’ favour and blocked the move. Bentley Motors has applied for its own EU trademark for cars to be extended to include clothing.

In 2018, Brandlogic sued Bentley Motors in an attempt to stop the carmaker from selling its range of clothing in the UK and also force it to destroy its stock. The High Court claim is scheduled to be heard in July 2019, with Brandlogic claiming that the carmaker “badly damaged its business”. Who will prevail in this David v Goliath battle remains to be seen.

5 lessons for SMEs (Davids) taking on large corporations (Goliaths) in trade mark disputes

 

  1. Be aware of the risk. Before you even invest in a brand name, run a careful and detailed investigation, including searches via the UK and EU Intellectual Property Offices.
  1. Whether thinking about creating a brand or in the event of a possible or actual conflict always consult a trade mark expert or an IP lawyer for advice.
  1. Act swiftly and choose the best procedure. Weigh the pros and cons of going to the High Court vs using the Intellectual Property Enterprise Court. Get advice on the costs of the options.
  1. Self help. Be active in gathering evidence if court action is required. Most trade mark cases are determined on the facts rather than relying on professional expert witnesses.
  1. Follow the professional advice received and where appropriate stick to your guns. Your opponent may be bigger and better resourced than you, but the blind Lady Justice is impartial.

 

As a brand in an increasingly congested market, it always pays to protect your trade marks and brand identity. If you have any questions about intellectual property law, contact Stephen Welfare on:

020 7583 2222     Email usstephen.welfare@roydswithyking.com

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