TOP 5 STRATEGIES FOR MITIGATING TRADEMARK RISKS IN GLOBAL MARKETS

INTRODUCTION

For businesses that manufacture and distribute products globally, a trademark is essential to building their reputation and brand identity. In the global business economy, trade names and trademarks are a visible and essential part. A vital ingredient of safeguarding your brand's identity and avoiding infringement is establishing and upholding trademark rights in global markets. A proactive and strategic approach is essential for managing your global trademark portfolio successfully, ensuring that the unique legal frameworks and nuances of each nation are navigated. Businesses can preserve a secure global brand presence by implementing best practices for trademark enforcement globally. Businesses expanding globally often require external legal assistance to identify the most effective and cost-effective ways to protect their trademarks. Many large multinational corporations have teams of lawyers, advocates, and attorneys monitoring their intellectual property rights (IPR). Therefore, protecting your trademark from infringement by competitors is crucial to safeguarding your brand and reputation.

The best practices for reducing trademark risk are analyzed in this section.

SUMMARIZE A TRADEMARK

A trademark is any symbol, word, phrase, design, or combination thereof that identifies and distinguishes one source of goods or services from another. It functions as a brand identifier, helping customers recognize goods and services and associate them with a specific business or origin. Trademarks are protected by law, granting the owner of a registered trademark the exclusive right to use it in commerce and prevent unauthorized use.

COMPREHENDING TRADEMARK REGULATIONS AND LAWS

Trademark laws and regulations can be complex and vary from one country to another. Businesses competing in the global market must understand the fundamentals of trademark law. Trademarks are protected by both national and international laws. For example, the Trademark Act of 1999 governs trademarks in India, while international frameworks like the Paris Convention and the Madrid Protocol regulate global trademark law. Different countries have distinct trademark registration laws, making it crucial to understand and comply with local laws when conducting business globally.

DISTINGUISHING COMMON LAW FROM CIVIL LAW COUNTRIES

Global legal systems can be divided into two broad categories: common law and civil law. Understanding the distinctions between these systems is essential for navigating international trademark registration. These differences significantly impact trademark protection. For instance, in common law countries, trademarks can be protected through use, whereas in civil law countries, registration is typically required for protection.

TOP STRATEGIES FOR MITIGATING TRADEMARK RISKS IN GLOBAL MARKETS

STRATEGY 1: Accomplish Informative Trademark Research

It is vital to ensure that a brand's trademarks are distinctive rather than descriptive or generic. Distinctive trademarks are easier to protect, as competitors are less likely to use similar marks that could confuse customers. Trademark monitoring should be conducted prior to use or registration to prevent infringement. This search should include registered trademarks in the relevant jurisdiction, unregistered trademarks in use, and similar trademarks that could cause confusion. Design simplification is advised; overly complex trademarks may demonstrate uniqueness but can hinder consumer recognition and brand recall, impacting brand communication.

Example Cases:

• Subway IP LLC v. Infinity Food & Ors., [2023/DHC/000269]: The Delhi High Court held that the defendant’s mark “SUBERB” was not phonetically similar to “SUBWAY,” despite both having two syllables, and did not infringe the plaintiff’s marks.
• Starbucks Coffee v. Sardarbuksh Coffee and Co. Ors (CS(COMM) 676/2019): The Delhi High Court emphasized that a trademark’s primary significance lies in its role as a unique identifier for both the company and its customers, with its image being its most critical feature.

STRATEGY 2: Globally Trademark Registration

Trademark laws vary by country, and protection in one jurisdiction may not apply in another. Registering trademarks globally is essential to address challenges like competition, counterfeiting, and brand dilution. The Madrid System, administered by the World Intellectual Property Organization (WIPO), streamlines this process by allowing businesses to register trademarks in multiple countries with a single application. Other frameworks, such as the European Union Trademark (EUTM) and the African Regional Intellectual Property Organization (ARIPO), provide protection across multiple member states. Global registration reduces the risk of regional rivals exploiting your brand identity.

STRATEGY 3: Monitor and Enforce Trademark Rights Globally

Regularly monitoring trademarks for infringement using domestic and global trademark databases, online platforms, and IP law firm services is critical to safeguarding a brand’s reputation and value. Enforcement actions, such as sending cease-and-desist letters, opposing trademark applications, or initiating legal action against infringers, are essential. Continuous monitoring enables early detection of potential infringements, allowing action before significant harm occurs.

Example Case:

• Louis Vuitton Malletier vs. Santosh & Ors. DHC: 2595: The Delhi High Court granted a permanent injunction against the defendants for using the plaintiff’s trademarks, citing Louis Vuitton’s long usage (since 1854) and goodwill. The court awarded damages of Rs.1,50,000 and costs of Rs.9,59,413 to the plaintiff.

STRATEGY 4: Use and Maintain Trademark Presence Online

Building a strong online presence for your trademark is essential. Creating a website, social media accounts, and other digital assets that prominently display your trademark reinforces the connection between your brand and its identifier, aiding in proving ownership and defending rights online. Continuous use of the trademark is critical, as many jurisdictions require proof of use within a grace period (typically three to five years) to maintain registration. Non-use may lead to cancellation.

Trademark Licensing: Licensing allows sharing your trademark with other businesses under specific terms, enhancing global expansion while maintaining exclusive rights. Comprehensive licensing agreements ensure brand consistency and protection.

Mergers & Acquisitions: In mergers, trademarks are combined into a new legal entity, while acquisitions involve transferring trademark ownership to the acquiring company. These strategies can provide local credibility, distribution networks, and market insights.

Example Case:

• Zara Food vs. Zara Tapas Bar [Industria de Diseno Textil S.A. v. Oriental Cuisines Pvt Ltd and Ors (CS (OS) 1472/2013)]: The Delhi High Court ruled that Zara Fashion, present in India since 2010, had priority, forcing the restaurant to change its name.

STRATEGY 5: Continuously Monitor Your Portfolio of International Trademarks

Routinely reviewing and updating your trademark portfolio ensures alignment with business goals. Checks should verify compliance with use requirements, coverage of applicable classes, expiration dates, and inclusion of new terms used in regional markets. Utilizing priority filing periods supports expansion into new product lines or markets.

CONCLUSION

Hiring a trademark attorney is essential for mitigating brand risks in international markets. Attorneys provide expert guidance, navigate complex legal systems, and develop robust strategies to protect intellectual property rights. By collaborating with a trademark attorney, businesses can reduce risks, ensure compliance, and enhance their chances of success in global markets at an affordable cost.