Enhancing A Brand In The Digital Age: What Every Brand Owner Should Know

By Ben Hitchens & John Olsen

Posted: 26th September 2014 08:45

The birth of the Internet heralded the dawn of a new digital era, forcing brand owners to re-evaluate their business models in light of increased competition and new opportunities for growth arising through e-commerce.  While commercially beneficial, those opportunities presented novel legal challenges for rights holders, necessitating an increasingly proactive approach to the maintenance of trade mark rights.
 
The widespread use of social media and application software, or ‘apps’, has obliged brand owners to once again assess the digital landscape.  This article seeks to identify the strategic and legal issues relevant to every brand owner with an online presence.
 
Strategic Issues
 
Social media allows rights holders to focus their marketing campaigns on specific demographics or even locations.  Through the medium of Facebook, Twitter etc., rights holders are able to interact directly with their target markets, obtaining immediate feedback on their products and services, as well as on the strength of accompanying marketing campaigns.  However, rights holders who pay insufficient attention to social media may see users beginning to dictate their brand’s direction.  Failure to monitor social media outlets and generate lively discussion could ‘legitimise’ the publication of negative messages on online fora, which unchecked may act as a catalyst for the spread of further comment.  Online inertia may also indicate commercial stagnation, leading consumers to believe that the brand itself is no longer relevant.  Thus, despite the obvious opportunities provided by social media, it also presents its own set of particular challenges, which may justify the expense of employing dedicated social media personnel.
 
Legal Issues
 
Trade mark infringement may also be a relevant issue where a rights holders' mark is reproduced without authorisation by a third party.  Clearly, where the mark is not used in the course of trade, there can be no liability.  However, where a third party offers or exposes goods for sale under the mark or uses the sign in advertising, such use may be infringing provided it is in relation to goods and services that are either: identical to those offered under an earlier registered mark; similar to those offered under an earlier registered mark and there is a likelihood of confusion; or similar/dissimilar to those offered under an earlier registered mark that benefits from a reputation.  Rights holders should be particularly aware of the protection afforded to a mark with a reputation.  In such circumstances, infringement proceedings may be brought where the defendant’s conduct damages, and/or takes unfair advantage of, the distinctive character and/or reputation of a trade mark, which are dangers particularly relevant to social media.
 
Where a mark is reproduced identically for identical goods or services, confusion is not a necessary ingredient for infringement.  However, as the ECJ has since held, for liability to arise in such circumstances a defendant’s use of a registered mark must be liable to damage one of the functions of that mark.  Subsequent case law has confirmed that harm to the advertising, communication, investment or origin functions of a trade mark will now suffice to satisfy that standard.  Before initiating proceedings for trade mark infringement, brand owners should therefore examine carefully the specific characteristics of the alleged use.  For example, where a third party makes use of a registered mark, but in a descriptive manner or in a way that does not prevent consumers from ascertaining the genuine origin of the mark, liability may not arise. 
 
A reasoned approach to prospective litigation is especially important in the field of trade mark law.  Rights holders who threaten alleged infringers without considering fully the legal merits of their position may contravene specific provisions designed to prevent groundless threats.  Such behaviour could lead to the original claimant in a trade mark infringement action becoming a defendant in a threats action, which may be damaging to a brand owner’s reputation as well as its finances.
 
Online appropriation of a third party's sign may also give rise to liability under the tort of passing-off.  Historically, this tort has been used to combat 'cyber-squatting', although specific alternative causes of action now exist to address this problem, namely the Uniform Domain-Name Dispute Resolution Policy (“UDRP”).  However, social media also allows unaffiliated parties to represent themselves in a manner which suggests association with a particular brand.  For instance, Facebook enables group pages to be established in the format www.facebook.com/[brand].  While the UDRP procedure allows rights holders to seek remedy for their marks’ unauthorised incorporation into second level domain names, it does not extend into the realm of social media.  Where brand owners wish to stop their marks being appropriated in this manner, they may be forced to revisit the common law alternative provided by passing-off.  However, passing-off presents substantial legal and evidential challenges to potential claimants; as a preliminary issue evidence of the goodwill subsisting in the mark must be produced, which can be time-consuming and expensive to compile.  Initially, it may therefore be sensible to exhaust internal complaints procedures to counteract fake or impersonation accounts. 
 
Notwithstanding the benefits, given the potential legal issues associated with social media, rights holders should adopt a measured approach to such tools.  Primarily, effective management of social media will go a long way to ensuring that the rights holder maintains ownership of their brand, as well as limiting the possibility of infringement.  However, before embracing social media, a brand owner would be well-advised to conduct an audit of their intellectual property rights to assess the legal strength of their brand.  For instance, a trade mark registered for more than five years may be subjected to a proof of use demand where it is used in support of legal proceedings, and indeed may be invalidated if use cannot be proved for a five-year period.  Moreover, even marks that have been registered for many years may lack the appropriate wording in their specifications to enable proprietors to enforce their expanding range of rights online.  Similarly, even though a company may enjoy a reputation for particular goods and services, it may not necessarily be free to use its house mark in relation to social media or apps in Class 9. 
 
In relation to apps, prior to marketing a brand owner would be well-advised to conduct a European trade mark clearance search for the name of the app and any sub-brands used within the app, with a particular focus on earlier third party registrations which include protection in Class 9.  Subject to clearance being granted, rights holders wishing to release apps under their brand should ensure that the specification of their trademarks is drafted sufficiently broadly – to maximise protection a registration should include the wording 'software downloadable from the internet' in Class 9. 
 
Conclusion
 
With these principles in mind, rights holders should welcome the new technology available to market their brands.  However, as the rapid expansion of the Internet has illustrated, the face of communications is changing rapidly.  While social media is currently the tool of choice, privacy concerns and waning interest have precipitated its abandonment by a growing band of once loyal followers.  Rights holders must therefore be prepared to adapt to developing consumer trends to ensure that the relevant legal hurdles are identified and addressed in advance.
 
Ben Hitchens is an associate in the firm's Intellectual Property group.  His practice covers all aspects of Intellectual Property Law, with a particular focus on trade mark and copyright litigation.  Ben has recently assisted clients in the High Court, Court of Appeal and General Court of the European Union on a number of high profile disputes. Ben can be contacted by email at BHitchens@edwardswildman.com or by telephone on +44 (0) 20 7556 4677
 
John Olsen is a partner in the firm’s Intellectual Property group and is consistently recognised by peers and clients alike as one of the leading lawyers in his field. He has more than 30 years’ experience in Intellectual Property Law and in particular trade mark law, 25 of those years practicing in Europe. John advises individuals through to multi-national companies throughout the world on selection, acquisition, exploitation and enforcement of trade mark rights. John can be contacted by email at JOlsen@edwardswildman.comor by telephone at  +44 (0) 20 7556 4350

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