Trademark Infringement - David vs Goliath

[lww]

I have anonymised the below so parties cannot be identified, hence details of the trademark issue have been changed to an "example" that is close to our situation. I have dealt with IP and legal issues myself over the years without problems but this one is proving less simple:


We (David) have a registered UK Trademark in class 9 for scientific globes. We discovered a multi-national company has released toy/craft construction products that create scientific globes using our trademark name. Their packaging shows the globe being used as the main image with our trademark name prominent. To rub salt into the wound, these are all co-branded products with huge brand names, so we know they are paying licenses to the other companies!

We sent Goliath a "Cease & Desist" letter to advise we believe their products infringe our trademark as their products are globes and said we would be happy to discuss the matter. They sent a patronising reply stating their product isn't a globe, it's a construction toy and that we "didn't need to worry about it".

We sent another "Cease & Desist" letter re-emphasising that the product is shown being used as a globe and hence infringes our TM and said we were happy to discuss it, arrange Alternative Dispute Resolution or otherwise be on 14 days notice that we start to take action to prevent them selling the products in the UK . They ignored us. We sent a 3rd letter again re-emphasising the infringement and stating that with regret as they refuse to communicate with us we would need to start steps for legal action in the Intellectual Property Enterprise Court (IPEC) Small Claims Track to seek damages or an account of profit and an injunction, however we were still open to discuss it and/or use ADR.

We have now received an aggressive, threatening letter in return from their IP lawyers stating:

* We haven't follow pre-action protocol that states both parties must exchange sufficient info (pretty rich given they ignored our previous letter trying to discuss the matter! Plus we haven't issued court papers so are still pre-pre-action as far as I can see?)
* They don't infringe as their products are in a different class and are not globes
* Even if they did infringe (?) our trademark is invalid as it is lacking in distinctiveness
* This constitutes unjustified threats and are actionable and their client could seek injunction/damages/etc
* We have 7 days to withdraw our "threat" (?) of trademark infringement or they will seek to invalidate our trademark, take action for unjustified threats and seek a restraining order/injunction.


I did discuss this situation prior to the initial letter we wrote with an IP lawyer (bare minimum on a phone call) and a non-IP lawyer and was confident this could not be considered "unjustified" as they are using the name on the same class of products. The lawyer also confirmed it makes no sense for Goliath to claim their products "are in a different class" as you can't just state that as fact. I know this is not a place to obtain formal professional opinion, but I would be interested to hear anyone's opinion on:

1. Is there any reason why a product cannot be considered to sit in 2+ classes? My argument is that their product is a globe, it happens to be made using a contruction kit rather than being pre-assembled, but that doesn't prevent it being a de facto globe. Even their packaging shows it being used as a globe. Their argument seems completely invalid? The lawyer I spoke to originally said they couldn't see any reason why products couldn't span 2+ classes - furthermore the product is such that it implies the point of the product is to construct a globe for practical use, not that you can continually construct/destroy/construct an object that incidentally happens to look like a globe.

2. Can Goliath take such an aggressive and threatening stance to a genuine complaint about infringement? Is it acceptable to threaten getting our trademark revoked and/or claiming damages if we don't drop our claims? Isn't this going to be considered unacceptable behaviour if/when it goes to court?

3. I get the impression this is a standard copy-and-paste response from an IP lawyer... deny they infringe, claim the IP is invalid, threaten to seek damages and get the IP struck off?


All I want is for them not to use our trademark on these products, or if they do they should pay us for it like they pay to co-brand the products. I'm more than happy to use ADR or sit in front of a judge if necessary.

To address the inevitable suggestion of "talk to an IP lawyer" - I contacted 2 before this started and both wanted several hundred pounds just to read the summary of the case and take an initial view, then several hundred/thousands just to start writing letters and establishing our position. That's money we can't waste and I don't see a need to (the "cost" to our business is not thousands other than the potential lost revenue if they had paid to use our trademark) - as far as I can see the IPEC Small Claims Track is purposefully intended for private or small claimants to be able to have cases heard without being bullied by the big boys with threats or retaliation/damages/costs/etc? How do I get to the point of using it without being threatened or counter-claims/actions?

Any and all opinions would be extremely welcome, especially from anyone who has gone through a similar process - thanks in advance!

 

[The Byre]

We're back to the standard reply - it all depends!

All IP issues are down to the details and your Goliath seems to have done their homework and researched your company and realised that they can intimidate you.

1. A wheel is a wheel, regardless of where or what it is used for.
2. Yes they can. So far, it is just threats - how a court may view their behavior is a complete unknown!
3. It's roughly what I would do - except threaten action to strike-off of the TM. That looks a bit hollow to me.

But nobody can give you any real advice without knowing all the details - all IP issues are ALWAYS down to the details.

 

[Frank the Insurance guy]

All depends on how confident you are and how much stress you can take - going to the small claims court for claims below £10k, could cost £1,000, which you could do yourself....eek! Not sure you could use the small claims court if its over £10k?

I suspect Goliath's legal team know exactly what they are doing and will usually frighten people off.

I think the courts take a dim view of a goliaths putting pressure on Davids to get there way. Also they do not like it where one party has been accommodating and willing to discuss the issue by offering to go to ADR and the other party is point blank refusing to do so.

If going down the small claims route, I think you are protected from paying all goliath's costs if you lose - suggest you check this.

As said above - its down to the details as to what a court would do. However based on your post I am wondering why did they use your trademark - is it recognisable and known in the globe industry? If so, this suggests they know it has a value otherwise they would not have considered using it? This may give some support to your case?

I have a concern as they have suggested that your trademark is invalid - if you do nothing, this may give them scope to use your trademark more in the future, as they can always refer to these exchanges and that you did not challenge them now, when given the opportunity.

In an ideal world you would have deep pockets and get an IP lawyer to fight your case!

Good luck!

 

[Pembroke99]

Just an observation really as I know nothing about IP. Would there be any milage in getting in contact with goliaths co-branders? See if they want to be associatied with a company that thinks nothing of crushing the little guy.

Also if they're using images of your trademark on the packaging wouldn't that be another line of approach?

 

[lww]

Thanks for the replies so far. I'll reply to each separately so as to avoid making this post too long!

1. A wheel is a wheel, regardless of where or what it is used for.
...
But nobody can give you any real advice without knowing all the details - all IP issues are ALWAYS down to the details.

I assume your "wheel is a wheel" comment is agreeing that a globe is a globe even if it's made from a construction toy?

I take your point about the details, but in a case where there is an existing registered trademark in use and another company subsequently brings out a product of the same type with that trademark prominently displayed (in text), is that not pretty clear cut? OK they could claim the IP is invalid and should be revoked, but how can they claim it's not infringing and an actionable threat?

Further to that point, I read in the Intellectual Property (Unjustified Threats) Act 2017 (https://www.legislation.gov.uk/ukpga/2017/14/section/2/enacted):

21A) Actionable threats

(2)A threat of infringement proceedings is not actionable if the infringement is alleged to consist of—

(a)applying, or causing another person to apply, a sign to goods or their packaging


As we are claiming their use of our trademark in text on the packaging and/or product is the infringement, surely this is not actionable? Am I completely misunderstanding clause (a), isn't that exactly what it says is not actionable?

 

[lww]

However based on your post I am wondering why did they use your trademark - is it recognisable and known in the globe industry? If so, this suggests they know it has a value otherwise they would not have considered using it? This may give some support to your case?

I can't honestly work out why they used it either - we use it on our products but they aren't world-renowned top-sellers or anything. But they use it on their entire range of these co-branded products, it is like they came up with it as a product name and simply neglected to check the IP first. I don't think they deliberately copied us, but equally it's not just something descriptive - it's the equivalent of something like "globe trotter", it's pertinent to the fact it's a globe but it's not descriptive of it.

I have a concern as they have suggested that your trademark is invalid - if you do nothing, this may give them scope to use your trademark more in the future, as they can always refer to these exchanges and that you did not challenge them now, when given the opportunity.

Yes I think unless I stop them now they will clearly continue to do as they like, their attitude is clear.

In an ideal world you would have deep pockets and get an IP lawyer to fight your case!

Wouldn't it be nice to have a billionaire philanthropist who helped the little guys in these situations

 

[lww]

Would there be any milage in getting in contact with goliaths co-branders? See if they want to be associatied with a company that thinks nothing of crushing the little guy.

Unfortunately these are some of the biggest brands in the world, I don't think I would even manage to get an autoreply to be honest... of course, the flip side is that Goliath faces the prospect of being unable to sell these products in the UK should I manage to "win", I can't imagine the mega global co-brands would be happy with that happening...

 

[The Byre]

Just how big is big? Are we talking Mattel, Hasbro, Lego, or is this someone UK based?

 

[lww]

Just how big is big? Are we talking Mattel, Hasbro, Lego, or is this someone UK based?

Goliath is a multi-national with a UK division, they are about 1 tenth the size of those you mention. The co-branders/licensees on this range of products however are about ten TIMES the size of those mentioned!

Goliath do a similar range of construction products that are similarly co-branded and that packaging uses near-identical styling and layout - and that range has a non-descriptive trademarked "name" in exactly the same place that the globe range uses our trademark. You would literally say they copied across that product styling and simply changed the "name" to our trademark name.

 

[wayzgoose]

Join the FSB - they've got a good legal department !

 

[The Byre]

You have five alternatives -

1. Join the FSB and get some basic legal advice before spending real money.
2. Go to an IP lawyer and get first-class legal advice for real money.
3. Post ALL the details here and hope that someone has the time, knowledge and patience to wade through all the details and give you what you HOPE is the right advice!
4. Roll over and do as they tell you! They might even tickle your tummy - though I doubt it!
5. Tell them that you'll see them in court, conduct your own case and hope for the best.

 

[Jass T]

Join the FSB - they've got a good legal department !

Is that the Federation of small businesses or FSB the Russian security services.
The later might scare Goliath more

 

[Panoramix IP]

See if you are eligible for support through IP Pro Bono (https://www.ipprobono.org.uk). If you are then an IP lawyer would be assigned to at least provide some initial advice at no cost. Ultimately, if you do issue proceedings you would be advised to first obtain an opinion from an IP barrister to understand the strengths and weaknesses of your case.

 

[lww]

You have five alternatives

Thanks, I realise I have alternatives, but as I said above I'm happy enough taking it to court myself, there are just some points I'm hoping to get clarified - the critical ones seem to me to be:

1. Can a product be considered to sit in 2+ classes, ie. be both a construction toy and a globe?
2. Does the Unjustified Threats Act 21A(2) mean my threat is not actionable as it relates to packaging?

Beyond hoping for some form of legal input/opinion on the Legal Forum to what I believe are *generic* IP questions, of course any input from others who may have experienced either side of this type of issue would be very helpful (and thanks to everyone who has replied on the thread thus far).

 

[lww]

See if you are eligible for support through IP Pro Bono (https://www.ipprobono.org.uk). If you are then an IP lawyer would be assigned to at least provide some initial advice at no cost. Ultimately, if you do issue proceedings you would be advised to first obtain an opinion from an IP barrister to understand the strengths and weaknesses of your case.

Thanks this is very useful, I hadn't come across this before! Unfortunately it won't apply for us as our annual turnover exceeds their £100k threshold.

I have a free 30 minutes initial advice via Rocket Lawyer scheduled so will feed back here if they clarify any of the above points.

 

[obscure]

Beyond hoping for some form of legal input/opinion on the Legal Forum to what I believe are *generic* IP questions, ......

But your question isn't at all generic. It is specific to your business situation and requires an examination of your/the other parties businesses and the products in question. You need to talk to (pay) an IP lawyer.

 

[lww]

But your question isn't at all generic. It is specific to your business situation and requires an examination of your/the other parties businesses and the products in question.

Thanks for the comment but I disagree on both of your points - obviously all cases are individual and hence different, however that doesn't mean there aren't generic questions that can be answered (like a law degree, explain and apply). I gave the background to my case for context but I thought the questions were pretty simple and clear (take out the personal phrasing from the questions if you want) and could be answered in a generic manner. Obviously the application to a specific case is relevant but that doesn't negate the core meaning or facts in law. I spoke to an IP firm last night who were prepared to answer basic /generic questions and they confirmed to me regarding my points:

1. Yes products can be considered to sit across 2+ classes, it would be ridiculous to claim otherwise. Nothing specific to my case there!

2. The Unjustified Threats Act 21A(2) does indeed refer to the application of a mark (text or image) to a product or packaging. Again, that comment is not specific to my case, so no problem explaining that. However the *application* of that to my case is of course specific and not necessarily a black and white situation (but lawyers say that about everything that isn't "professional advice").

They also addressed one of my earlier queries about Goliath transferring to a court outside of Small Claims Track if they got in ahead of me to try to take action and they stated this was unlikely as it was disproportionate to our size and the issue, although again (disclaimer of course) it would depend on the exact details and what they were claiming etc. So again, a generic answer with the standard non-fee-paying caveat of "it does depend".

You need to talk to (pay) an IP lawyer.

Whilst it would be *ideal* or *preferable*, especially if one had limitless funds to splurge on lawyers, that doesn't mean one can't represent oneself with a bit of due dilligence - the whole point of the IPEC Small Claims Track is to allow private individuals and small businesses to represent themselves, and since costs are generally not recoverable a legal track with a £10k limit cannot support situations where IP firms want to charge in excess of £1k just to write a Letter Before Action, let alone take further legal steps. Of course there is a "risk" in a DIY approach, but with some generic advice I see no reason not to handle this myself as the claimant just as I would (and have) a normal court claim... my own caveat here is that I probably wouldn't do that if I was the defendant

(I am interested to know how many people would be paying the IP firm £1k+ to consider the situation and write a Letter Before Action, and how many would handle this themselves? Once you've paid that £1k, what would you do next, pay the IP firm more to respond back-and-forth or then do the next bit yourself? How quickly would you rack up thousands of pounds in unrecoverable fees?)

 

[The Byre]

(I am interested to know how many people would be paying the IP firm £1k+ to consider the situation and write a Letter Before Action, and how many would handle this themselves? Once you've paid that £1k, what would you do next, pay the IP firm more to respond back-and-forth or then do the next bit yourself? How quickly would you rack up thousands of pounds in unrecoverable fees?)

Where the amateur falls down is on procedure.

Where the experienced barrister/solicitor falls down is on preparation. He/she (or rather the client) does not have the budget at a minimum of £240 per hour to spend a few days researching the case. Their advantage is that they are carrying years of experience and knowledge in their heads.

Tip - get a legal beagle to hold your hand on procedure and combine that with meticulous preparation. (You might like to talk to @smallclaimsassistance on this one BTW) That means days of researching every law, every case that might be of precedence and every circumstance. Practice every argument ten-times over!

Also, practice being confronted with a killer argument by the other side. Think what that killer argument could be and be prepared with a counter position. Don't allow yourself to be caught out, gawping open-mouthed like a gaffed salmon - be prepared!

Yes, I have conducted my own cases on many occasions and I have also had legal representation on many occasions. (Though I have to admit this was always in Germany.) The funkiest case was about 14 concerts that we did for an agency and they were refusing to pay because of a failed concert where we provided the PA. They blamed us for that failure.

I had an old lawyer friend from my student days representing us. They had a posse of about four beagles plus paralegals. It must have cost the plaintiff a small fortune! I looked at my friend, he at me and we giggled - this will be funny! You'll see!

There was a huge difference. They had the full majesty of top-flight advocates and their assistants who were all lawyers in their own right. We had prepared.

We won on all counts!

Good luck and nail 'em. Nail 'em good!

 

[lww]

Where the amateur falls down is on procedure.

Where the experienced barrister/solicitor falls down is on preparation.

I would certainly agree with that, and I would add that although the amateur falls down on procedure, that is exactly why the small claims tracks exist... there is a leniancy offered to the amateur that would not exist in a full court. And I also understand that IP disputes very rarely get to court anyway - which is unsurprising when costs can't be recovered in small claims and it's only something like 65% that can be recovered in main courts. I'm hoping this won't even get to court - I'd quite like it to in a way, it's the travel I can't be doing with

Good luck and nail 'em. Nail 'em good!

Thanks, I will come back and update this thread at a later date!