IP enforcement: Trademarks as ‘sword’ or ‘shield’?

By Laura Morrish,
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A common misconception is that trademarks are merely a legal tool employed to stop others using identical or similar marks to your business’. Beyond that, trademarks can serve as a commercial tool when dealing with partners and a legal tool when dealing with unconnected others, while acting as a ‘sword’ or a ‘shield’. These different functions must be kept in mind when deciding on your IP enforcement and protection strategy, says Laura Morrish.

It can be important to enforce IP rights against third parties, but their value also lies in their role as a ‘shield’, used as a defence against third parties and allowing rights owners to lay claim to their investments and innovations.

Registering IP, where possible, provides brand owners with options and allows them the choice of if and how to use their IP. Owning IP gives you options, to pursue enforcement, negotiations, or no action. No IP gives you no options.

Let’s look at the different functions of IP and how they can benefit your business.

IP as a ‘sword’

As a ‘sword’, intellectual property can be used to attack third parties, including a competitor, who seeks to exploit some aspect of your intellectual property in a way that violates your rights, whether intentional or not.

Some IP owners take an exclusive approach to enforcing their rights and can become almost constantly embroiled in contentious proceedings in their mission to do this. If your trademark is highly distinctive, or market is niche, then it might pay off to take this approach, as the aim would be to keep as much clear water around your brand as possible and increase its value.

For this approach, brand owners should consider seeking trademark protection for the broadest possible range of goods or services to allow broad enforcement, at least within the 5-year non-use grace period (3-year in some jurisdictions). IP owners will need to keep in mind the requirement for a bona fide intention to use the mark in some jurisdictions but by doing this, owners secure time to establish their brand’s reputation, which in turn allows broader IP enforcement.

For example, if your interests were in ‘gin’ you may seek to protect your mark for the broad term ‘alcoholic beverages’ to prevent third parties from using the same mark for a different spirit, or alcoholic drink. Once a reputation had been established for gin, the IP owner would also then benefit from a broader scope of protection for dissimilar goods, even if the use is ultimately limited to gin.  In other words, using the initial broad scope of protection as a ‘sword’ in the 5-year use grace period can help prevent dilution of the rights, even where use may ultimately be limited to one category of goods. 

IP as a ‘shield’

However, in some scenarios registering a trademark can be a defensive move. For example, where a market is crowded with the use of a descriptive trademark, owning a registration for the mark in a stylised form might provide a defence to an infringement claim made by a third party using the same descriptive mark. While the scope of protection for the mark would be narrow, and it might be difficult to enforce against third parties using the same descriptive term, owning a registration would give the owner a stake in the ground. It also establishes a definite date upon which the rights commenced and defines the scope of those rights. This can be useful if challenged by third parties, to show co-existence and to add the inconvenience, for a third party, of having to invalidate the registration. It is also a useful tool to send a message to the world that you are using the descriptive term as a trademark.

Where trademarks are used as a ‘shield’, IP owners must keep in mind the limitation on enforcement, and expectations must be managed around the scope of rights which are granted by registration.  Simply owning a trademark registration does not guarantee exclusive monopoly rights in all elements of the trademark and where rights are protected as a ‘shield’, future IP enforcement against third party use is likely to be limited.

IP rights can also play the role of an ‘olive branch’ and be used as a negotiating tool when facing larger commercial conflicts. The licensing of an IP right between parties might offer a solution to a contentious issue.

Trademark strategy

Registering a trademark is a good way to deter third parties from using the same or a similar mark and, as we have seen, trademark registrations can be useful as a ‘sword’ or a ‘shield’.  However, not every mark justifies the expense of registration. It is important to conduct a legal and commercial analysis to identify if protection is worthwhile, including how the resulting registration might be used.  Part of this assessment will involve conducting trademark clearance searches

In addition to checking that use of a proposed trademark will not infringe any earlier rights, clearance searches are a valuable tool to assess whether it is necessary, or even possible, to register a trademark. In some cases, the results of a search may indicate that while it might be possible to register a trademark, the value of doing so would be so limited that it is not justified from a commercial perspective.

When assessing trademark strategy, a number of factors must be taken into account including the nature of the market, the product, the nature of the mark and the elements that might be capable of protection, the longevity of the mark, any plans to licence the mark and the brand category. Whether a trademark is ultimately protected by way of registration, the function of that registration as a ‘sword’ or a ‘shield’ will shape the future use of the registration and while that function may change during the lifetime of the registration, it is important to understand the options that registration gives the IP owner.  Trying to enforce a registration which was designed to act as a ‘shield’, may leave the owner vulnerable to counter-attack and ultimately in a position where the ‘shield’ is lost.

IP rights, whether used as a legal or commercial tool and whether used as a sword or a shield, can carry significant value and are an important mechanism to protect investment and innovation for businesses.

If you would like to explore how your IP rights might be protected and used, please contact us here or talk to your Novagraaf attorney.

Laura Morrish is a Trademark Attorney at Novagraaf in the UK.

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