Legal action against my business : Intellectual Property Design breach

Marantzdigital

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  • Feb 13, 2023
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    Morning UKBF,

    I write post this at 4am with a horrible feeling of being trapped and lost from an error I have made in running my small business. I have not sought legal advice as I assumed it could be resolved with some form of compensation paid by me.

    The goods I have advertised have been flagged as breaching a very large companies goods designs.

    Their Lawers have contacted me directly requesting quite a large sum for their legal fees and furher amounts for the breach and finally, some terms an conditions that they want me to sign - I can agree to as I don't intend on getting into this situation again but some I feel are possibly made up to suit them. They want to know supplier and customer info along with asking me not to publicise details of the issue which I haven't agreed to, yet.

    We had a brief back and forth explaining my situation and I have noticed they do not want to negociate and have doubled the legal fees from a few emails - is this normal?
    Can this be challenged?

    I am a one man band operating in England.

    I will be Frank, there are some clear similarities in the two designs but there are some adjustments or tweaks in depths and angles. The goods I sell also come in various sizes unlike the 'original goods'. There is a large difference in price and also as the goods I sell come in a variation of sizes unavailable normally they are in my opinion not taking sales away from the 'original goods'.

    Now whilst I can clearly show the differnces in my products and theirs, I have read that it all boils down to an opinion of 'overall impression' which could go either way in court - probably not in my favour but you never know?

    My question is what can I do?
    What would you do?

    The legal fees doubling from one letter is the killer. I accept I have some blame for my actions but that tactic seems very devastating.

    I don't dispute the goods being similar.
    I was offering these as drop ship lines so have pulled all the ads as they requested.

    Thanks in advance for taking the time to read.
     

    WaveJumper

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    Pretty sure other with far more experience in this field than myself will offer more detailed advice. In my humble opinion you should not be admitting to anything, they are trying to scare the livings daylights out of you. American lawyers I assume.

    I would have just written back confirming goods had been removed from sale whilst you carry out an investigation, and left it at that. Any further correspondence from them you need to seek proper legal advice and check out if this is for real or a scam

    As an aside put their lawyers address into google as see what their office looks like ie is it a post office in a shopping centre like a company I was looking at yesterday
     
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    Lisa Thomas

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    Happy to recommend a solicitor if you don't find one on here.
     
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    fisicx

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    @Marantzdigital - when you listed these items on your website did you do any verification as to their legitimacy?

    With regards the legal action have they produced evidence of infringement such a patent or trademarks?

    Have you already removed the items from the website?

    Get an IP/ trademark lawyer to help you with this. Take up the offer from @Lisa Thomas
     
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    Marantzdigital

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    Sorry to hear about your situation- but you need to get independent advice from a specialist IP lawyer - quickly.

    It's possible they are chancers or scammers, a good lawyer will know

    Best of luck!
    Thank you everyone, for your replies so far, I really felt on my own with this one
    I am struggling to operate normally at home around the kids etc (work from home a lot).

    They are a genuine established firm sadly for me and they have definitely put the scares on me.

    All adverts were removed from sale immediately.

    They have registered designs and can see the similarities. In the two products but they are not the same - obviously who ever made my product has changed its design a little (atleast 2 or 3 things differently tweaked).

    I did not search up the products prior as these were quite common to see being sold by other sellers and naively assumed all was OK.

    I now see its very dangerous being a seller, even some large companies are sued for infringement!

    They have done a mystery shopper physically handled the products which are as they say in Thailand 'same same but different'.
    Not full blown copies but yes they are similar minus some tweaks.

    I must have bad luck as loads of other sellers still offering these goods.
    I don't particularly want to sell these goods any more so do not want to dispute or drag on.

    They have imposed tight time lines to respond also

    I would be more than happy if there are any recommendations for an IP specialists, having read many threads on here in the background I can see I would be in good hands.

    Thank you all for taking the time to reply
     
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    fisicx

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    But….

    Have these lawyers given you references to a Uk trademark? Without this they don’t have a strong case for infringement.

    Just because your product is the same blue as their product doesn’t mean there is an infringement.
     
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    Marantzdigital

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    Hi

    Yes they have sent over the design rights docs (UK), and there are some clear similarities in the two products.

    It's more of a spot the difference in designs scenario. I have spotted a handful but the overall look could be said to be similar depending on who's looking.

    I feel it could be challenged but at what cost? I would consider settling and no longer marketing the products.

    The main concern is how they can suddenly ask for thousands of pounds more, which they want paid asap (its for their damages not the legal fees, those are extra) and also demand details of supply and sales linked to these products.

    I feel like this could be a spider in the bathtub situation
     
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    I understand the stress here, but you are talking/thinking yourself into a corner

    A professional IP lawyer will usually give a 30 minute free consultation in which they will evaluate the size and legitimacy of the claim - and you can discuss fee budgets.

    Take up @Lisa Thomas offer of an intro - you have nothing to lose
     
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    fisicx

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    The main concern is how they can suddenly ask for thousands of pounds more, which they want paid asap (its for their damages not the legal fees, those are extra) and also demand details of supply and sales linked to these products.
    They can ask for whatever they want. You and your lawyer can argue about if the amount is reasonable.

    Get a lawyer! You still have time to book an appointment before they knock off for the weekend.
     
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    Marantzdigital

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    I've been loosing sleep and now created myself a night owl time table which does not help!

    It's lifted me to see your views on this are not all doom and gloom. Seeing those sort of figures and them doubling over a short period are shocking.

    I missed the weekday boat but yes of course I will drop @Lisa Thomas a message as that would be great.

    Its a limited and they have put me and the company down on the paperwork as seperate entities.
     
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    FreddyG

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    1. All IP issues are ALWAYS down to the details. That is why you MUST talk to an IP lawyer. Take Lisa's advice and get a 30-min free consultation, if it is available.

    2. It sounds as if you have been importing some Chinese knock-offs that are also being sold by many other vendors in the UK. If that is the case, the manufacturer and/or importer of the "kosher" product will be playing Whack-A-Mole.

    3. All that guff about doubling the legal costs is just there to intimidate you and frighten you out of the market. Only the details will reveal whether you need to be genuinely frightened.

    4. Stop fretting, drink a nice hot cocoa, and get some sleep!
     
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    Marantzdigital

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    Sleep done and easing back into normality, much appreciated UKBF, just a few posts here have helped bring a little confidence back. I have also contacted @ Lisa Thomas and hopefully can get a recommendation for this coming week.

    This mole has been whacked.
    Even if it works out, I don't think these types of goods are something I'd be looking to invest my time and money in. There are other avenues to explore. I'm not wanting to fight to continue selling, just fight to clear my name or get out of the mess.

    I totally get the IP thing. If the shoe was on the other foot, I would be very frustrated but I'd be reasonable. I guess they get this all the time and no time to listen to sob stories or excuses.

    Have a good weekend guys
     
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    Lisa Thomas

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    I have sent you a couple of recommendations - hope they can help.
     
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    Did you design your products or are they off the shelf/from an Asian manufacturer?

    As mentioned, if you are a limited company, it is the company at risk, not you.
     
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    fisicx

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    These are off the shelf goods manufactured in Asia, I am simply one of many resellers of these goods.
    Unfortunately many items from China are copies of branded products. They really don’t care and will quite happily take your money knowing full well they have sold you something with copyright, trademarks, patents and other IP rights. You just happen to have been caught. Fingers crossed your lawyer can help you out of the mire.
     
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    Marantzdigital

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    What did they say when you updated them?

    I haven't been in touch with them as of yet, I dont think they will want to know?
    I personally picked the items, having seen many other businesses selling them for years, so I really am at fault if the designs are too close to comfort.

    A tough lesson to learn sadly for me.
     
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    Marantzdigital

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    I'm not sure of the actual main supplier or manufacturer as, from my understanding, the goods are often resold in lets say a 'chain', so I wouldn't be able to find out from higher up, if they have some sort of design rights in place to certify a 'kosher difference' in their goods vs the goods that they may have been inspired.

    As I may need to order stock in the coming months, I did briefly indirectly request more information about the 'design rights' from one distributor offering other designs of goods (not the ones infringed as I no longer have any interest in these) but they said there wasn't anything in place, perhaps they didn't know or were unable to say more (the whole chain thing)- this doesn't give me much confidence in any of the lines.
     
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    Marantzdigital

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    The goods I buy generally, are from resellers who most likely obtain from other resellers.

    I have tried to find out this information in regards to any new, unrelated, goods that I intend on buying- to avoid other products being problematic - but was told by these resellers that they are unaware of any paperwork to say the designs have been checked etc- there wasnt much conversation to it, which tells me either they are genuinely not sure, maybe as they are too far down the chain or they do not want to go into it.

    I would like to find the manufacturer of the products to get the answer from the horses mouth
     
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    WaveJumper

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    Unfortunately many items from China are copies of branded products. They really don’t care and will quite happily take your money knowing full well they have sold you something with copyright, trademarks, patents and other IP rights. You just happen to have been caught. Fingers crossed your lawyer can help you out of the mire.
    Yep probably 100% this they copy everything from iPhones to handbags, even outboard motors which when people order these supposedly "cheap" branded engines they come with a misspelt name stuck on the cowling.
     
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    fisicx

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    The goods I buy generally, are from resellers who most likely obtain from other resellers.
    Which means they probably know the goods are iffy and don’t care.

    When are you meeting with your IP legal person?
     
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    MikeJ

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    Yep probably 100% this they copy everything from iPhones to handbags, even outboard motors which when people order these supposedly "cheap" branded engines they come with a misspelt name stuck on the cowling.

    Can you still get a "myphone"? They were around about 15 years ago in Dubai.

    Edit - yep, big in the Philippines apparently...

     
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