A brand owner’s perspective

As an SME with a small number of well-known brands, we have encountered Michael Gleissner in the past when we have been obliged to defend our trademark registrations against applications for identical or near-identical trademarks for identical goods in various countries. Not only did opposing such applications incur significant costs, as we had to use the services of local trademark attorneys in addition to our UK ones, but we also had to devote valuable management time that should otherwise have been spent productively on our business. Perhaps more importantly, the resultant opposition process created additional and unnecessary business uncertainty.

Fortunately, we were successful in opposing the applications on every occasion. Nevertheless, the costs that we incurred were not recovered and pursuing further action is not a cost-effective use of time or money. This seems to be well understood by speculative filers.

Ultimately, trademark systems are designed for companies that apply for registrations in good faith and that intend to actively use them in their course of business. In a strong trading environment, where many companies are seeking registrations for new products and services, there will inevitably be trademark conflicts when a genuine application gets closer to an existing registration than the trademark owner would like.

When such conflicts arise between genuine trading entities, the normal starting point would be to open negotiations to see whether the parties can find an amicable solution. In our experience, about 75% of such conflicts can be successfully resolved by negotiation and formal opposition can be avoided. Costs and the time spent on the issue are therefore minimised. More importantly, the outcome is one that both parties consider to be reasonable and business uncertainty is minimised to the benefit of both sides. In the 25% of cases that cannot be resolved amicably, the parties inevitably need to fall back on the opposition process to produce a fair outcome.

However, speculative filers often have no bona fide intention to use their trademarks, with the companies behind the applications not actively trading in related sectors. It is therefore usually impossible to negotiate. Approaches are ignored and opposition is the only way forward, with the trademark owner – often an SME like us – knowing that it will be obliged to allocate time and funds to implement action to resolve with no chance of financial redress.

All this is understood by speculative filers who recognise the ransom opportunity and have deep pockets in support. SMEs must be aware of – and keep a careful eye on – budgets, making them particularly vulnerable to such entities. Specifically, SMEs can readily calculate expected future expenditure on new trademark applications and renewals but cannot anticipate how many oppositions may be required if the business is targeted by speculative filers.

When large numbers of trademarks are filed by speculative filers, it is inevitable that some will not be opposed or that for some, the oppositions will fail. These registrations will then sit on the register as potential obstacles to subsequent genuine applications. For example, when looking to file new applications – whether for new trademarks or for existing trademarks in new markets – our preliminary searches have on occasion identified a prior mark owned by one of Gleissner’s companies. Although not always possible, it has proven more sensible for us to change our approach to avoid the obstacle rather than to hope to negotiate co-existence.

In our experience, the trademark system works reasonably well when dealing with genuine businesses in good faith. On the flipside, these systems are not proactively robust in deterring bad-faith applications or large-scale speculative filers. Therefore, we would like to see some improvements made.

First, it is worth noting that the activities of Gleissner’s companies have been well documented and some IP offices should be applauded for taking this into account when deciding disputes involving one of their applications. But in cases where costs have been awarded against a party, the IP office should ensure that these are paid with further penalties for delayed payment. If a company has failed to pay similar costs in a previous case, it should not be entitled to take or defend an opposition in a subsequent case without paying monies due.

Second, the United Kingdom requires applicants to declare a bona fide intention to use their marks. We believe that this should be a requirement in other jurisdictions as well.

Finally, where there is overwhelming evidence that a company or group of companies is abusing the trademark system to the detriment of others, there should be more drastic sanctions to ensure that the system can operate in the way that it was intended – to encourage genuine trade.