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Are You Trading Dangerously?

Trade mark Infringement

The use of certain signs or symbols in the course of trade is strictly regulated by law.  Well known examples of these signs or symbols include the “golden arches” of MacDonalds and the word “APPLE” in relation to electronic products. In fact the nature of these signs or symbols extends further than one might think and can include colour schemes and even the shape of product packaging.

There are two legal regimes which protect these signs or symbols by transforming them into forms of property known as “intellectual property”. The first is a statutory regime under the Trade Marks Act 1994 which regulates registered trade marks in relation to their registered goods or services. This legislation extends its protection to signs or symbols which are not identical to registered trade marks but where a likelihood of public confusion exists or where it is perceived that the unregistered sign or symbol takes unfair advantage of the registered trade mark.

Importantly the owner of a registered trade mark does not need to prove that the owner of an infringing sign or symbol was aware of, intended to infringe, or was in any way influenced by, the registered trade mark.

The second legal regime has developed through case-law and is termed “passing off”.  Passing off protects signs or symbols which have not been registered but which have acquired “goodwill” (i.e. an attractive force which brings in business). If an unregistered sign or symbol can be shown to possess goodwill then its owner may have a legal claim against a person who in the course of trade uses a sign or symbol which may confuse a member of the public as to the origin (e.g. the manufacturer) of goods or services, and such use causes actual or potential, financial or reputational damage.

The serious consequences of both registered trade mark infringement and passing off were demonstrated in the recent high profile case concerning Kulfi ice cream. I advised the claimants, Tubzee Limited, in their claim against the defendants who adopted a text layout and graphical image on packaging which was held to be too similar to that of Tubzee.

At the conclusion of the case the judge held two of the directors of the defendant company personally liable for the infringement, despite operating through a company structure, and made them responsible for the payment of costs and damages, as well as a court order for the destruction of all infringing packaging.

In his judgment the judge condemned the defendant directors noting that they had been aware of the similarities but had nevertheless taken “a conscious decision to live dangerously”. The judge also noted that infringement of signs or symbols which contain English language components may be more likely to arise in relation to their colour schemes, shapes and images in areas where English is not the first language.

Registered and unregistered signs or symbols should both be proactively protected to prevent certain defences becoming available to infringing signs or symbols due to the lapse of time. It is important that businesses ensure that their reputations, built on hard work and often costly advertising, are not taken advantage of by unscrupulous competitors. Equally, it is essential that businesses are not infringing the intellectual property of another organisation.

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Luke Patel

Partner and Head of Dispute Resolution
Commercial Dispute Resolution
0113 227 9316
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Luke Patel Blacks Solicitors LLP