Research Trends and Conclusions: Trademarks 2009
Rosalind Donald -
Who's Who Legal takes a closer look at the issues facing trademark lawyers.
TM (Credit: greefus groinks via flickr)
Is trademarks a recession-proof practice area? Despite the economic slowdown, lawyers report that business is as brisk as ever: by 2009, the World Intellectual Property Organization expects its millionth filing, after record figures in 2007. Christopher Benson of Taylor Wessing LLP says, "despite the credit crunch, trademark owners are still likely to take action against third parties who infringe their brands, particularly if it is one of their "crown jewel" trademarks. Brand owners' businesses are built around trademarks and goodwill in the brand is all important."
A strong identity can be key to a business's survival: Warren Buffett, who has created much of his wealth from acquiring famous names, recently highlighted, in industry magazine Managing Intellectual Property, the overarching importance of "brand" to guide a business through straitened financial times. Similarly a statement issued by WIPO on the appointment of Frances Gurry as its director general also points to a "sustained trend to harness the economic value of innovation through the acquisition of property rights".
NEW APPROACHES: THE TREND AWAY FROM LITIGATION
While the practice of trademarks law remains buoyant, liquidity concerns mean that mark owners are looking increasingly toward preventive measures rather than costly litigation. Court action is often avoidable, according to Trevor Cook of Bird & Bird, "unless the two parties are locked into the use of the trademark". DLA Piper LLP's Siân Croxon says, "people who handle brands always look to avoid litigation if they can, as it hits their budget directly". Instead, they are "looking carefully at the brand portfolio and how to obtain maximum benefit from good management of their IP assets". She says there is now great emphasis on "getting the portfolio right", and ensuring that the brand is protected. Investors and stakeholders are also seeing the financial benefits to building and maintaining interest in the brand by registration, according to John Olsen of Field Fisher Waterhouse LLP. "Investors in businesses are interested in [protecting] their asset values by protecting the brand."
NON-TRADITIONAL TRADEMARKS
Brand protection itself is becoming more inventive and sophisticated; non-traditional marks such as 3D designs, smells and sounds are all becoming more common as part of trademark owners' portfolios worldwide: 2008 saw Yahoo, represented by Anand & Anand - whose partners Pravin and Safir Anand appear in this edition - register its "yodel" as the first ever sound-mark recognised in India. In an article on the subject, World Trademark Review notes that this signals new opportunities for sound-mark owners in emerging markets. Scent filings are also popular. Jean-Christophe Troussel says that in the perfume industry "good brand names are at a premium", so that "successful branding requires multiple types of protection" and "securing rights on the scent is an integrated part of that effort". 3D trademarks are yet another way to maximise protection. In January 2008, the US Patent and Trademark Office granted Apple a trademark for the shape of the iPod media player, a step that should guarantee the company a powerful competitive advantage.
GLOBAL TRADEMARKS
Virtual worlds
The internet has created a new frontier for IP protection. Michael Metteauer of Fulbright & Jaworski LLP says: "There is more internet work now." He says that new variations on trademarks and internet advertising are increasing the workload along with more generic top-level domain work. The recent explosion of multi-player online role-playing games such as Second Life has attracted major commercial entities, according to Sheldon Burshtein's article "What Your Business Must Know About Virtual Worlds". Burshtein, who is a partner at Blake Cassels & Graydon LLP, reports the dangers brand owners face from the "misappropriation of well-known trademarks" in virtual worlds such as Second Life. The use of real world marks to sell virtual goods and services raises questions as to whether this constitutes infringing trademark use and, "if so, in which jurisdiction", creating great uncertainty. A number of real world disputes on the subject are currently in progress, so trademark owners can only hope that, as Burshtein states, "the rights of intellectual property rights owners in virtual worlds will be clarified".
EUROPE
From virtual worlds to international markets: although famous name owners are becoming more trademark-savvy, this does not mean that defending them is getting easier. A number of trademark cases are currently at the European Court of Justice and these will affect the way that local and European legislation will be implemented. The Court's ruling in Intel v CPM in November 2008 raised the bar on dilution claims, stipulating that trademark owners must prove that similar marks being used for different services are affecting consumers to the detriment of the complainant's revenues. The case reached the ECJ after the UK Court of Appeal asked it to clarify whether a trademark can be infringed by a trademark in another field after Intel's case against the telemarketing and field marketing company CPM over its ‘Intelmark' trademark. This particular ruling is set to worry trademark owners and lawyers for fear that it will make bringing dilution cases far more difficult in future. Olsen says, "The decision is consistent with the leitmotif of European IP law: holders of trademark rights must be able to prove that they are entitled to their exceptional status and the protection of the relevant legislation on acquiring such rights and on seeking to enforce them."
MIDDLE EAST
Continuing commercial growth and new access to around 200 million consumers in the Middle East have caused a trademarks gold rush among brand owners. Gary Assim of Shoosmiths says that the UAE in particular is "a very hot area for trademarks". Since the implementation of the TRIPs (Trade Related Aspects of Intellectual Property) agreement in the region, companies are attracted by the Middle East's rapid economic growth, especially in the face of recession elsewhere in the world. He feels that the downturn has "pushed people out there even more." Hoda Barakat of Al Tamimi & Company agrees: "The region has been booming in recent years and was seen as a development opportunity. With the financial crisis in the world, the region is of course impacted but less so than other regions." The opening of the Dubai Mall - the largest shopping centre in the world - is another indication that companies with high IP worth such as "retail brands are looking to enter [the UAE]" in order to exploit new opportunities, says Assim. With the entry of new brands into the market comes a greater risk of infringement and Barakat reports increased litigation as companies invest in the new region, saying, "companies are dedicating budget and resources to protect their rights."
ASIA
In all growth economies, "the boom of recent years has led to brands becoming more important and of course, associated copying," says Barakat. Counterfeiting remains one of the biggest concerns facing trademark owners - WIPO's press release highlights the "escalating problems of trade and counterfeit goods which according to one estimate exceeds US $200 billion" per year. Asia is among the biggest counterfeit hotspots identified by interviewees - Siân Croxon describes it as a "battle". Christopher Shen of NTD Patent & Trademark Agency Ltd (China) says that infringement is so common in China that the "reputation of the country is suffering," but that the "legal system and enforcement organisation are getting much better"; in 2006 alone the Chinese government and local authorities took over 50,000 trademark actions. Croxon also points to lawyers developing a "more sophisticated exploitation of the brand" as well as robust licensing policies in order to fight fakes. She also emphasises the importance of retaining close working links with the enforcement authorities.
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In a global economy where brand distinctiveness has become key to staying ahead in saturated and contracting markets, the 555 trademark specialists featured here are in high demand to protect clients' most precious assets. While budget worries are keeping litigation down in most jurisdictions, demand for other measures against infringement, dilution and counterfeiting as well as increasingly ingenious pre-emptive filings means that trademarks law could indeed be recession-proof.