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Case Study: Trademark law

Creating, managing and defending rights in brands and labels is all a matter of standardised procedure these days – and that is true not only of formalities at the trademark office, but of asserting rights in or out of court as well. No matter how intricate the specific case may be, issuing cease-and-desist warnings and obtaining restraining orders are often done just according to the book, sometimes whole series of them at a time. But more often than not, the secret of getting the upper hand in a trademark dispute is recognising just the right moment to break out of the set pattern.

Well equipped with both foresight and sound advice, our client obtained trademark protection as soon as he started doing business (operating a portal). Still in a modest position financially, the new company opted to restrict protection of its trademark to German territory for the time being, and vigorously defending it was out of the question to start with. Turnover grew and the company started planning future expansion, and so it applied for trademark protection throughout the EU, the USA and some other countries as soon as this was affordable, which was a couple of years later – but as it turned out, that was already too late.

We did succeed in eliminating a whole series of infringements for our client – in particular, we resolved a number of domain name disputes using the relatively quick and inexpensive UDRP procedure. However, one competitor who knew all the tricks of the trade had meanwhile registered a Community mark, thus managing to obtain trademark protection in the whole of the EU.

So whilst our client had priority rights inside Germany, his competitor had beaten him to the punch across the border.

With the two trademarks directly competing with each other, the similarity of the competitor’s trademark caused a tremendous amount of confusion. As our client’s business grew, and in particular when one of Germany’s leading publishers decided to invest in it with the declared intention of expanding abroad, the sheer urgency of the trademark problem put it right at the top of the agenda.

Even before the competitor could be contacted about it though, our client found himself at the centre of a claim based on the Community mark and involving a domain he had registered, which had similarity with the competitor’s trademark. Before long, our client was up in court being sued.

Procedural law offered the following possibility by way of response, and so this is what was done: a petition was filed for dismissal of the claim, a counter-claim was submitted for cancellation of the Community mark, and an application was made for a temporary injunction prohibiting further use of the trademark – in Germany at least. The upshot of this would have been that the competitor lost trademark protection in Germany and would no longer be allowed to use its trademark in this country – and so the action that it had originally brought would have to be dismissed as well. As the litigation stood, this could have brought the proceedings to a close.

At the same time though, this might well have turned out to be a Pyrrhic victory because it was limited to Germany territory. The Community mark would indeed have been nullified, but in all the other EU Member States the competitor would still have been able to have the Community mark converted into a national trademark. This would have merely aggravated the legal dilemma, because there would be a trademark that enjoyed protection here in Germany whilst a competing trademark could still be used abroad.

What was needed now was for us to exert our powers of persuasion in two opposite directions at once. Our own client had to realise that even if he won the case in court, the ruling would be counter-productive in the long run – especially with a view to the company’s plans to expand abroad. At the same time, a solution to the conflict still had to be found with the competitor – but one that would not get in the way of our client’s expansion.

There was no way that this goal could be reached simply by using legal arguments of the kind normally geared towards winning or losing a case – instead, this very same approach had to be seen as a starting point for negotiations. A typical co-existence agreement, such as the court urged the parties to reach at the conciliatory hearing, might well have brought the litigation to an end, but it would not have solved the problem – simply because two trademarks would be permanently allowed to exist side by side, despite the fact that they conflicted.

A workable solution was ultimately found that took both parties’ interests into account: instead of being obliged to abandon its trademark (for Germany), the competitor undertook to alter it by adding an extra feature. For one thing this succeeded in making it sufficiently distinct from our client’s trademark, whilst for another it enabled the competitor to retain its old brand name, meaning that it did not sacrifice everything it had invested in the label to date. The agreement that was reached was declared effective worldwide.

And so by adopting an approach that departed from the set pattern, we managed to find a solution that went way beyond the key issue of the dispute.