Businesses that do not guard their trademarks risk suffering financial loss or losing control of their brands to rival businesses. But where this leads to the sending of legal threats and litigation over baseless trademark claims, the losing party is more likely to be a start-up or a small business with limited funds.
The term “Trademark bully” is used to describe a company (usually a multinational brand) that regularly issues legal threats or takes legal action against anyone they deem to be infringing on their trademark whether or not their allegations of trademark infringement have merit. The aim is to prevent the other party generally an individual, a small business or a start-up from using or registering their own trademark. Such actions generally start with a trademark owner sending a “cease and desist” letter to the other party.
What is a "cease and desist" letter?
A “cease and desist” letter is a letter which states that the recipient is potentially infringing someone else’s trademark and demands that they stop their unlawful use of the trademark. If the recipient ignores the letter, the trademark owner generally files a notice of opposition to the trademark application or launches legal proceedings. It is essentially aimed at stifling competition under the pretence of trademark protection as in many cases the claims might have little or no merit. The intention of the trademark bully is to make the threat and or issue the claim in the hope that the other party will stop using the trademark or withdraw their trademark application simply because they do not have the financial clout to fight back and defend their trademark rights.
So what should you do if you receive a “cease and desist” letter from a firm of solicitors acting for a company?
1. Each case must be assessed on its own facts and on your circumstances. You first need to be sure that you have not infringed on the opposing company’s trademark rights.
2. Litigation requires a commitment of time, money and effort and many small businesses do not have the financial resources to fight.
3. Review your finances and think carefully about what you intend to do.
4. Take legal advice.
5. If you have taken legal advice and you want to fight the claim, review your finances again. You may not have the finances to put up a fight or it may not be worth it. If so, it is okay to concede. This may result in your company incurring some financial loss. But even so, it is better to concede than fight a case that you may not win.
6. If you decide to fight, have a budget. Make sure that your lawyer understands your finances and your reasons for fighting the claim.
7. Be willing to fight – Be prepared to file an answer to the notice of opposition when lodged. Your opponent’s intention is to drag out the proceedings and hope you concede or give up the fight.
8. Be open to negotiation and settlement. 9. If you have access to the media, you may wish to use it to publicise your case. Publicity has been used in several cases to shame opponents. But do take legal advice first.
If you need help or want some advice on a Trademark or IP matter, please call us (telephone no 01234 834620/01234 834621) or email us at firstname.lastname@example.org.