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Gregor Kleinknecht discusses Trademarks, Design Rights and Copyright to Promote Business Growth and Innovation in University of Buckingham Press

  • February 18, 2022
  • By Gregor Kleinknecht, Partner

Gregor Kleinknecht’s chapter in Jonathan Reuvid’s book ‘Grow and Evolve Your Business’, published by University of Buckingham Press, is available by open access here

 

Using Trademarks, Design Rights and Copyright to Promote Business Growth and Innovation

The role of branding and design

Branding and design are key to turning innovation into marketable and commercially successful products, regardless of industry sector. Branding and design, and the associated IP rights, enhance product awareness, quality perception and customer loyalty, and help to distinguish innovative new products from those of other competitors. Brand rights are increasingly valuable and important for businesses in a global economy but, at the same time, brand protection challenges and threats to brand integrity become ever more demanding for brand owners to manage. The pronounced move to online trading during the Covid-19 pandemic, successive lockdowns of brick-and-mortar stores, as well as the implications of Brexit, have reinforced both the challenges and opportunities for growing and evolving businesses, with the strongest, most recognisable, and innovative brands continuing to prosper.

Options for protection

In simple terms, different IP rights protect different aspects of a product. Patents are dealt with in detail elsewhere in this compendium, and this chapter will therefore focus principally on the value of trademarks, design rights and copyright in protecting and promoting innovation. A trademark is essentially the name or sign placed on or used in connection with a product and its packaging to distinguish it from other products. Registering a trademark protects that name or sign from infringement by others although, under English law, unregistered trade names also enjoy (albeit more limited) legal protection. By contrast, design rights are concerned with the appearance of products. Again, design rights can be registered or unregistered. Finally, copyright can also be used to protect aspects of design and aims to prevent others from reproducing a protected original work. In the United Kingdom, copyright protection arises without the need for registration (indeed, there is no copyright register). New products will generally be protected by a combination of these rights, in addition to any patents that protect the underlying technical innovation of a new product.

Trademarks defined 

The Trademarks Act 1994 (“TMA”) defines a trademark as any sign capable of being represented graphically which distinguishes the goods or services of one undertaking from those of other undertakings. Traditionally, a trademark consisted of words, slogans, designs, letters, numerals, or the shape of goods or their packaging. More recently, smells, sounds, colours, gestures and moving digital images have also been considered in principle as being capable of registration as trademarks. Trademark lawyers typically speak of word marks, device marks, shape marks and olfactory marks, etc. The key function of a trademark is to distinguish the products of different traders and to serve as an indication of origin; this is known as the “guarantee” function.

The legal framework

Trademarks are essentially national rights, i.e., they provide protection only in the country or territory where they are registered. In the UK, registered trademarks are dealt with in the TMA. European Union (EU) trademarks were a notable and important innovation when they were first introduced as Community Trademarks because, upon a single registration, they provide trademark protection in all EU Member States at once. EU trademarks are governed by Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union Trademark (EUTM Regulation). The EUTM Regulation is directly applicable in all EU Member States. Since 1 January 2021, following the end of the Brexit transition period, EU trademarks no longer cover the UK. As a result, businesses trading both in the UK and in the EU will now need to register, manage, and protect both a UK national trademark as well as an EU trademark.

Registering a trademark

Trademarks are best applied for and registered at an early stage in the product development cycle to ensure that the preferred mark is available and protected, and a branding strategy is in place, by the time the product is ready to be launched in the market. Before a trademark application is filed, it is prudent to obtain trademark clearance advice on the question whether the proposed mark is available for registration and use across the territories in which it is likely to be marketed. Possible delays and conflicts (in particular as to third party rights) can often still be avoided or resolved at that stage, for example, through a coexistence agreement, challenge of the validity or subsistence of the conflicting mark, or simply through acquisition of the conflicting right. The UK national trademarks register is administered by the UK Intellectual Property Office (“UKIPO”); EU trademarks are administered by the EU Intellectual Property Office (“EUIPO”). Upon receipt of a trademark application by the competent trademark office, an examiner will review the application to assess whether there are any “absolute” grounds on which an application must be rejected. These grounds include, for example, that a mark is devoid of distinctive character, and did not acquire distinctiveness through use, or that the mark is descriptive of the goods or services to which it relates. If the examiner finds that there are conflicting registrations of identical or similar marks, he will notify any such conflict to the applicant and to the owner of the conflicting earlier trademark application or registration. If the application passes this stage, it will be publicly advertised in the Trademark Journal or the EU Trademark Bulletin respectively. This stage provides third parties with an opportunity to oppose the registration of a mark on “relative” grounds, basically, on the ground that the application conflicts with rights that already exist in respect of some or all of the goods and services to which the application relates. If the application is not opposed, or an opposition is successfully resolved in favour of the applicant, the mark will proceed to registration and a certificate of registration will be issued. Trademark registrations must be renewed periodically (currently every 10 years) but are renewable indefinitely for successive ten-year periods upon payment of a renewal fee.

Nature and scope of trademark protection

A trademark registration confers on the owner the exclusive right to use the mark in connection with the goods and services for which it has been registered. The proprietor may prevent others from using the same or a similar mark in the course of trade in connection with identical or similar goods without consent and can sue for trademark infringement where this occurs. Unless an identical mark is used for identical goods or services, the owner must show that use of the mark causes, or is likely to cause, confusion on the part of the public. If a trademark is well known and enjoys reputation, it benefits from a wider scope of protection in circumstances where the mark is used without due cause and such use takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the infringed trademark. In the case of an EU trademark, this applies even if the infringing use of the mark is in relation to goods or services which are not similar to those for which the EU trademark is registered. EU trademarks have the same effect in the EU member states as national trademarks have in the UK but with wider territorial scope. Importantly, in economic terms, a trademark registration of course also enables the proprietor to exploit his IP rights commercially, for example, by granting trademark licences to third parties within a distribution or franchising arrangement or by selling and assigning the rights to a third party.

Extending protection internationally

If an innovation is to be commercialised outside of the UK and the EU, the Madrid Protocol enables trademark registrations to be extended internationally to designated signatory countries based on their “home” registration.

Unregistered trademarks

In the UK, the owner of goodwill in an unregistered trade name may be able to protect that trade name against infringements through the common law tort of passing off. However, establishing the required evidence can be difficult and costly, in particular, in the case of new trade names, which may not yet have built up sufficient goodwill in the market place. Relying on the protection of unregistered trade names at common law is therefore no effective substitute for registered trademark protection.

Design Rights: The legal framework

The appearance of a functional object, or of part of an object, can be protected through registered or unregistered design rights if the statutory requirements are met. Unregistered designs are protected at a national level in the UK through the Copyright, Designs and Patents Act 1988 (“CDPA”), and registered designs through the Registered Designs Act 1949 (“RDA”), as amended first through the CDPA, then by regulation in 2001 and 2006, and more recently by the Intellectual Property Act 2014. At EU level, designs are protected by the Council Regulation on Community Designs (6/2002/EC) although the European Commission has recently undertaken a consultation on possible reforms of the European designs legislation. As with EU trademarks, since 1 January 2021, EU Registered and Unregistered Community Design protection no longer extends to the UK.

Requirements for unregistered design right protection

In order to be protected a design must:

•consist of the shape or configuration of the whole or part of an article;

•be original (which means that it must not be commonplace in a qualifying country in the design field in question at the time of its creation);

•be recorded in a design document or an article must have been made to the design; and

•have been created by a qualifying person.

If reliance is to be placed on unregistered design rights under the CDPA, it will be essential for detailed records to be kept of when the design was first created, and when articles made to the design were first marketed, so as to be able to establish the existence of a design right in any subsequent infringement proceedings. In order to assist with legal action against infringers, design documents should therefore always be signed and dated. Products made to the design should be marked with the words “Design Right”, the name of the design right owner and the date when the right came into existence.

The CDPA specifically excludes design right protection where the design:

•is a method or principle of construction (as opposed to the finished article);

•comprises features of shape or configuration of an article which enable the article to be connected to or placed in, around or against, another article so that either article may perform its function (“must fit” exception); or

•is dependent upon the appearance of another object of which the article is intended by the designer to form an integral part (“must match” exception);or

•is a design for surface decoration.

The scope of the European Unregistered Design Right (described in more detail further below) is somewhat wider in that it protects designs of the appearance of the whole or part of a product resulting from the features of, in particular, the lines, contours, shape, texture and/or materials of the product itself and/or its ornamentation.

Nature and duration of unregistered design right protection

The owner of the rights in a design has the exclusive right to reproduce the design for commercial purposes by making articles exactly or substantially to that design, or by making a design document recording the design for the purpose of enabling such articles to be made, and can prevent others from infringing his design right and from interfering without the design right owner’s consent with those exclusive rights (these acts are called “primary” infringements). Design right is aimed at preventing copying; importantly there will therefore be no infringement if the alleged infringer has independently created the same or a similar design.

A “secondary” infringement occurs when a person imports into the UK or has in his possession for commercial purposes, or deals in the course of a business with an article which is, and which he knows or has reason to believe is, an infringing article, without the licence of the design right owner.

Design rights last the lesser of 10 years from the end of the calendar year when articles made to the design were first marketed or 15 years from end of the calendar year when the design was first recorded in a design document (or, if earlier, when an article was first made to the design), subject to a licence as of right during the last 5 years of the term.

Registered design protection

The RDA (as amended) defines designs as features of lines, contours, colours, shape, texture or materials of the product or its ornamentation. In order to be capable of protection as a UK national registered design (in respect of the whole or part of a product), the design must be new and have individual character. These criteria are subject to an examination procedure by the registrar at the application stage. Registered designs can protect both three-dimensional and two-dimensional designs. There is a “must-fit” exemption but the “must-match” exemption does not apply to registered designs. Designs are protected as such and protection is not limited to the product to which the design was originally applied. Applications are made to the UKIPO and the registration process is relatively short and inexpensive compared, in particular, to that for obtaining a patent. The period of protection is a maximum of 25 years. Registered design right protection can be extended to other countries under the Paris Convention regime. International design registrations are possible pursuant to the Hague Agreement. Products made to a registered design should be marked with the words “Registered Design” and the corresponding registration number.

European design protection

The Council Regulation on Community Designs (6/2002/EC) established a framework for protecting industrial designs throughout the EU, mirroring the EU trademark regime, by creating a Registered Community Design administered by the EUIPO. In the EU, registered design protection lasts for 5 years and may be renewed for subsequent 5 year periods up to a total of 25 years. In addition, the Regulation introduced an Unregistered Community Design right, which comes into existence when products incorporating the design are made available to the public in the EU and lasts for a period of three years. There are detail differences between the regimes for protecting unregistered designs under the CDPA and under European rules and an assessment must be made on a case by case basis as to which regime proves more beneficial in the particular circumstances or whether both are required.

Copyright: Basis of protection

In the UK, copyright is an unregistered right protected through the CDPA. It arises automatically for any work that has been recorded in any form and meets the statutory requirements to qualify for protection, including that it has been created by a qualifying person. Earlier legislation still applies (with some amendments) to works created while the earlier legislation was in force.

Nature and duration of copyright protection

In the context of protecting innovation, copyright is of relevance principally with regard to original design and technical drawings as well as computer programs and code. In contrast to some other IP rights, copyright is intended to prevent copying of the whole or a substantial part of a protected work and certain other restricted acts but does not provide monopoly rights where another author has independently and without reference to the protected work created a similar or even identical work. Famously, copyright seeks to protect the expression of an idea but not the idea itself. The CDPA also seeks to prevent “secondary” infringements committed through importing, possessing or dealing with infringing copy. Copyright usually lasts for the lifetime of the author plus 70 years from the end of the calendar year of his death. In the case of computer-generated works, copyright protection lasts for 50 years from the end of the calendar year in which the work was made.

Relationship with registered and unregistered designs

There is some overlap between the scope of design rights and copyright, in particular, since amendments to the CDPA now extend the benefit of copyright protection to industrially exploited artistic works. Where an action for copyright infringement is possible, an action for infringement of an unregistered design may not be brought.

The implications of Brexit

Brexit and the end of the Brexit transition period, have had far reaching implications for IP rights in the UK and, in particular, for brand protection. UK secondary legislation, implementing the provisions of the Withdrawal Agreement, revoked the retained EUTM Regulation and amended the TMA, inter alia to grant the holders of existing EU trademarks, a comparable UK national trademark, and to make other transitional arrangements. A comparable trademark has the same status and effect as a trademark registered under the TMA. In the area of design right protection, transitional arrangements have also been implemented following Brexit; the UK legal framework has become more complex as a result of the creation and grant of new types of design rights to holders of existing EU Registered and Unregistered Community Designs, such as comparable design rights, re-registered designs, continuing unregistered designs, and supplementary unregistered designs. With regard to copyright, the UK will no longer be part of the project creating the Digital Single Market and copyright protection in the UK and in the EU is already starting to diverge as a result of the EU Digital Copyright Directive not having been implemented in the UK.

Brand Management and Protection

The effective management of an IP portfolio is key to a successful brand strategy and to maximising the value of IP rights. This includes not only the maintenance of registrations, and a watching brief to monitor third party applications to register potentially conflicting rights, but also an effective enforcement program to prevent, identify and pursue rights infringements. What form that enforcement action takes will depend on the circumstances of each individual case, on the rights involved, the type and seriousness of the infringement, and the identity and location of the infringer. The available options range from administrative proceedings before the competent trademark registry, or the involvement of police forces and customs or border agencies, and the instigation of criminal investigations, to domain name dispute resolution procedures and enforcement action in the civil courts, including interim and permanent injunctions, claims for damages and/or an account of profits, and an order for the delivery up or destruction of infringing articles.

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