Trademark litigation culture stumbles on this side of the pond

There may be an Intel inside the majority of PCs sold globally, but that market dominance does not give the US computer chip giant blanket rights to stop other companies using the term “intel” as part of a trademark, a British court has ruled (MW last week).

Earlier this month, Intel lost a court battle against the UK Patent Office to have the trademark “Intelmark” declared void. Intelmark was registered in 1997 by Omnicom-owned marketing services group CPM as a trademark for marketing and telemarketing services. But Intel tried to have the registration struck off on the grounds that CPM was exploiting the reputation of its own Intel mark.

Intel may be a strong brand – in the latest Interbrand survey of the world’s most valuable brands it was ranked fifth, with a value of $32.3bn (17.3bn) – but Justice Patten decided there is no likelihood of damage to Intel’s brand, provided CPM sticks to the terms of the original trademark. CPM chief operating officer Paul Woolley states: “This ruling will give heart to other companies in the UK and overseas finding themselves embroiled in lengthy conflicts with major brand owners.”

An Intel spokesman was unable to say whether it would take the matter further. But he added that the company has spent “billions of dollars on building the brand, and we have an obligation to our shareholders to protect that value”.

There has been a rash of similar cases recently. Last month, Leicester-based snack food company Phoenix Britz won a three-year battle to be allowed to use the trademark Britz for its range of snacks after objections from Kraft, which had claimed the name was too similar to its global brand Ritz. It was something of a Pyrrhic victory, however: the Patent Office awarded Phoenix Britz 2,200 in costs, but it spent an estimated 25,000 fighting Kraft’s action.

Getting the blues

Not all such cases involve British Davids struggling to resist US Goliaths: two weeks ago, Chelsea Football Club failed to prevent small, northern drinks company Europa Wines using the brand name Chelski – the nickname given to the club after it was bought by Russian oligarch Roman Abramovich. Europa now apparently plans to launch a vodka-based alcopop under the name Chelski Blue.

Jeremy Phillips, an intellectual property expert and visiting professor at London University, points out that many big companies opposing attempts by smaller firms to register trademarks have quite weak marks. “Intel is a commonly used prefix. Chelsea is a place name and a girl’s name. McDonald is a common surname,” he says.

Ignorance is no defence

There appears to be widespread ignorance of intellectual property issues. A new survey by law firm Browne Jackson found that only 45% of directors realised they must register a trademark with the Patent Office to safeguard a company’s monopoly on the name. Meanwhile, some 80% are unaware of the financial value of their company’s intellectual property assets.

Companies that own brand names in effect have to litigate to defend their marks against any potential threat that might erode their legal protection, he argues. “If you have a strong, unusual mark, then it is difficult to erode. Weak marks tend to go to court more often because they have to.”

Yet this week it has emerged that Google has sent letters to media owners demanding the use of the generic term “to google” – meaning to search for on the Web – be stopped, warning they could otherwise face breach of copyright.

Phillips says/ “US companies have a shareholder and management culture that is more prone to litigation than the culture in most European countries.” Unilever, he adds, goes to court far less than rival Procter & Gamble, but Unilever’s trademarks “are just as well defended as P&G’s”, he concludes.

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