When does it make sense to protect trademarks? Any company asking itself this question has already overcome one significant hurdle: that of actually being aware of the existence of industrial property rights. Particularly in small and medium-sized enterprises, these are often neglected or ignored altogether.
Dr Eckhard Ratjen, a Bremen lawyer from the law firm of Boehmert & Boehmert, works in the area of Intellectual property and Copyright law. He frequently deals with companies that don't think about protection for their trademarks until it's too late – or fail to consider it at all.
Dr Ratjen, why is trademark protection so essential for companies?
Ratjen: Trademark protection is important to protect the use of a product name and/or company name by that company now and in the future. Without trademark protection there is always a risk that third parties could register the same or a similar trademark and then disrupt or even prohibit your own use of it.
You need to be aware that the mere fact of having previously used a trademark does not generally provide any protection. Only a registered trademark can ensure the security required. As a rule, once a third party has obtained a trademark it is difficult to reclaim it without a great deal of cost and effort. In addition to protecting your own use, a registered trademark is of course also an effective way of preventing third parties from using an identical or similar trademark, and so avoids confusion in the market.
But you need to be careful before using and registering a trademark. Companies must ensure that they respect existing trademark rights already held by other companies, otherwise they might end up committing a trademark infringement. This doesn’t just apply to market entry in Germany, but equally when entering markets in other countries.
What’s the worst that could happen if I ignore the rights of my competitors?
Ratjen: That depends on the individual case. But there could definitely be serious economic consequences for a company. The owners of earlier trademarks could initiate legal proceedings if they see their rights being infringed. That will often begin with a cease and desist letter and could lead to an interim injunction. If an injunction is granted by a court and lawfully served, all advertising and distribution has to cease from one day to the next, and all infringing products have to be recalled from commercial customers. That is a quick way for a company to lose the trust of its customers and business partners.
How can I protect my products further?
Ratjen: There are several ways for companies to obtain legal protection for their ideas and products. In addition to trademark protection for a product name and/or company name you can also protect the external design – i.e. the shape – of a product through Design law. Industrial art may well be covered by Copyright already, without the need for a specific registration. As far as the technical area is concerned, you should also always consider the option of patent or utility model protection.
Ideally, how should companies proceed to obtain trademark protection?
Ratjen: Before registering a trademark, companies should always take the following steps. First, they should check in which segments they currently require trademark protection for goods and services, or will require it in the future, and what territorial scope the trademark protection needs to cover. Based on this information, the second step is to carry out a trademark availability search.
Only by conducting this search in the relevant trademark registers, it is possible to find out whether a trademark is available to be used and registered. If the trademark is not already in use by a third party you can proceed to apply for your trademark. This can either be done in the form of a German trademark before the German Patent and Trade Mark Office (DPMA) or as a European Union trademark before the European Union Intellectual Property Office (EUIPO).
Could a company conduct its own trademark search and register the trademark itself?
Ratjen: A trademark application with the DPMA or EUIPO does not require a lawyer. Companies are able to do this themselves, and the offices even provide a certain amount of help. However, this approach is generally not recommended, as there are many sources for errors along the way to registration.
For example, people without legal expertise are often unable to ascertain whether or not third party trademarks are critical and capable of blocking use and registration. You can carry out your own research using the offices’ online research tools, but this will only give you a rough overview at best. This is why a trademark availability search should always be conducted by a trademark or patent attorney. The same applies to drawing up the list of goods and services required for the application. An incorrect classification can quickly lead to gaps in the protection, or to objections. A lawyer who specialises in trademark law is able to provide the help and guidance required.
How much does it cost to instruct a lawyer to register a trademark?
Ratjen: The investment required for trademark protection depends on the extent of the desired protection. EU trademark protection, which covers all Member States of the European Union, is obviously more expensive than a purely German trademark. Another factor that affects the cost is the number of classes of goods and services the application should include. For example, if an application covers three classes, the official fee for applying for an EU trademark is €1,050, or €300 for a German trademark. Then there are the legal fees, which will vary from one law firm to another, depending on the service package offered.
Would it make sense to register several trademarks at once?
Ratjen: That does happen quite frequently, and it may well be an advisable move. Take a trademark that consists of a word and a device element, which are intended to be used together. When it comes to trademark law, it makes sense to apply for the combination of word and device as a trademark, since the intended form of use should always be given trademark protection. But in addition to this it is also advisable to register the word element and the device component as a separate wordmark and figurative mark. That is the only way to obtain optimum trademark protection. There may be trademark disputes in which it is insufficient to have registered ‘only’ the combination of word and device, and the individual protection of the components as a wordmark and a figurative mark are required in order to have legal grounds for a claim.
Is an Intellectual property rights strategy just something for large corporations, or should SMEs consider it too?
Ratjen: Every company should have a strategic approach to the application of Intellectual property rights in order to avoid unnecessary costs. For new or small companies the emphasis will often be on protecting their own use of a trademark and the associated products. It’s quite possible that, in addition to trademark protection, design protection may also have a significant part to play in this respect. Product design can be legally protected and its use controlled by means of Design law. Another option open to innovative companies is patent protection. Once a company has reached a certain size, an Intellectual property rights portfolio could even be employed as a specific tactic against competitors, for example to protect and strengthen your own market position.
How important is trademark protection abroad?
Ratjen: If a company’s business activities are restricted to its home market then trademark protection at national level should normally be sufficient. But you shouldn’t underestimate the importance for some companies to also obtain trademark protection abroad. Generally, trademark protection should be obtained in all countries where products are being manufactured, exported, imported or sold under the trademark. The problems in foreign markets are ultimately the same ones as in your home market. But experience shows that the costs of trademark disputes abroad are often significantly higher than in Germany, making it advisable to take the necessary precautions at an early stage.
What are the typical mistakes when entering foreign markets?
Ratjen: We frequently see companies enter foreign markets without giving any consideration to questions of trademark law. This can have very unpleasant consequences. In addition to costly trademark disputes, national authorities in certain countries may impose draconian penalties. For example, in many countries you are only allowed to use the ® trademark identifier if the relevant trademark has actually been registered. The rules of trademark law vary considerably around the world. So companies would be well advised to look into the local laws before they enter a market, in order to avoid nasty surprises.
While we are talking about international markets – will Brexit have an impact on trademark protection?
Ratjen: Brexit will have a significant impact on issues relating to trademark law.
Rather than obtaining a German trademark, up to now many companies have opted to register EU trademarks instead, which not only provide protection in Germany but also in every Member State of the European Union. Once the United Kingdom leaves the European Union, the EU trademark will no longer offer any protection there. Holders of EU trademarks should therefore take action and check whether they need to maintain trademark protection for the UK. Unfortunately there is a lack of certainty at the moment on whether the UK will be allowing the holders of EU trademarks to convert the ‘UK elements’ of their EU trademarks into national UK trademarks. It is possible that it could become necessary to register new national trademarks in the United Kingdom.
The issue also greatly affects holders of EU trademarks who are not based in the European Union. Up to now, many of these companies have used UK law firms to apply for their EU trademarks. After Brexit this will no longer be possible, as those law firms will no longer be entitled to represent before the EUIPO. Any companies affected should endeavour to find new lawyers within the European Union as soon as possible.
Dr Ratjen, thank you for talking to us.
Fact file: Dr Eckhard Ratjen
Dr Ratjen is a lawyer who specialises almost exclusively in trademark, design and competition law, as well as copyright law. Born in Schleswig-Holstein, he is a supporter of Werder Bremen football club and has been working at law firm Boehmert & Boehmert in Bremen since 2013. The firm represents German and international companies in all areas of intellectual property and copyright law. With nearly 100 lawyers and patent attorneys based at several locations in Germany and abroad, it is one of Germany’s largest intellectual property and copyright law firms.
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