It’s a Cold War: Iceland (Country) v. Iceland (Company)
The Government of Iceland has launched a legal action against the Deeside based retail chain Iceland Foods, to challenge its exclusive ownership of the European wide trademark.
Iceland Foods is accused of aggressively pursuing and winning multiple cases against Icelandic companies which use “Iceland” as part of their trademark. It now looks like Iceland and its Government have got fed up with their companies being unable to use their national nomenclature.
Despite its Oswestry roots, the supermarket chain does have links to the Nordic country, with control being in the hands of Nordic investors between 2005 and 2012. Founder, Malcolm Walker, has been quick to defend Iceland Foods which has successfully used the trademark for the past 46 years. He argues that the company has no desire to stand in the way of Icelandic companies using the name to promote their own products, provided of course that they do not cause confusion with Iceland Food’s products.
Who will win in this “cold war” remains to be seen. In a competitive market place, this case serves a reminder of the need for companies to protect their brand as early as possible, as well as giving DTM Legal an excuse to highlight some of the highest profile battles in this area.
Apple v. Apple
A company’s brand image is an essential tool to distinguish its product and services from competitors and assures customers as to the quality of their product. A well-documented example is the famous dispute over the name “Apple” which was originally owned by Apple Corps, founded by the Beatles in 1968. Eight years later, Steve Jobs introduced Apple Inc to the world and what followed was a turbulent relationship between the two companies both fighting to protect their brand.
Round one saw Apple computers pay Apple Corps an undisclosed sum in settlement for using the name, on the basis that they would stay out of the music industry. The relationship was short lived when Apple computers introduced Mac Plus in 1991 and other products which allow music playback.
The second legal battle resulted in Apple Inc paying out $26.5 million in legal fees and a further settlement was reached. Then in 2003 (some 25 years after the first legal battle) iTunes was born.
Once again at loggerheads, the ultimate result saw Apple Computers pay Apple Corps $26.8 million to use its name in computers and music distribution.
Applying for a Trademark
Contrary to popular opinion, there is no pre-condition for filing an application to the Intellectual Property Office that the mark is actually in use.
The best time to apply for registration is usually at the development stage of a new product. This not only ensures that the application is well on its way to registration by the time the product reaches the market, it also gives the applicant plenty of time to oppose any subsequent application by third parties or challenges to the mark.
Conduct a Clearance Search
If you are thinking of registering a trademark, it is worthwhile conducting a clearance search to identify any identical or similar marks which have already been registered. In order to do this, you should consider all potential locations where the product might be marketed. This will reduce the likelihood of a need to rebrand the product at a future date when introduced into a new territory.
Is the Domain Name still Available?
Before incurring the cost of developing a name, it is a good idea to conduct a domain name search (there are many search tools available online) to see whether or not the domain is still available. There is always a possibility that the domain is already in use by a third-party. Alternatively, it may have been registered by a company “cybersquatting”, who may be willing to transfer ownership to the highest bidder, or who you may need to take steps against to recover the name in which they have no legitimate commercial interest.
Ownership of Copyright – Get it in Writing!
If a third party is used to develop the brand or create a logo, it is important to confirmation in writing that any copyright in the artwork belongs to the company.
This is illustrated by a dispute over the Innocent Smoothies logo. Fresh Trading Limited (owners of Innocent Smoothies) applied for a European wide trademark in respect of its logo which was designed for them by a third party called Deepend Limited.
Deepend challenged the application on the basis that it would breach the copyright in the logo which they, as the designer, purported to own. This was upheld by the Office for Harmonization in the Internal Market and Innocent’s trademark application was refused.
Unfortunately for Fresh, a written agreement was not drawn up when the work was commissioned to Deepend. Consequently, the only way to resolve the dispute was to commence costly court proceedings against Deepend. The High Court ultimately found in favour Fresh on the basis that the logo was created specifically for Fresh and approved by Fresh and was to be used specifically for the purposes of Fresh’s business. This was a costly lesson to learn. Had there been an agreement there would have been no ambiguity as to ownership.
Is the Trademark Capable of Registration?
In order to successfully register a trademark it must not be the same as, or cause a likelihood of confusion with, an existing registered mark. This is the basis on which Iceland Foods has been able to object to Icelandic companies registering their marks.
The application will also fail if the mark is too descriptive, as discovered by Wrigley, the maker of chewing gum, when attempting to register the name “Doublemint”. In contrast, Proctor & Gamble successfully registered the mark “Baby-Dry”, a decision which has been criticised by many.
Plan for Future Use of the Mark
Commercial considerations should be given at an early stage to the future of the company and brand development. A trademark might be perfect for the product in its current form, but what if the company decides to diversify in the future, will the trademark still work? Re-branding can be a costly expenditure and a change of name often means building brand recognition from scratch.
It will be interesting to see how the Iceland Foods case is decided. The law in this area is complex and, as evidenced by case-law, many companies have been hard hit financially due to a lack of planning. Companies should take note by putting measures in place to protect their identity and very often the source of their success, namely their intellectual property.