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Trademarks: Where you stand and what you should be doing

Trademarks: Where you stand and what you should be doing

Mon 28 Jul 2014 7:18am GMT / 3:18am EDT / 12:18am PDT
Legal

A how-to guide from Harbottle & Lewis' Kostyantyn Lobov

The registration and enforcement by certain studios of trade marks consisting of commonly used words is a topic which has generated heated discussion in the gaming community recently. A great deal of the discussion has either focussed on the morality of the trade mark strategies adopted by these studios or been based on a questionable interpretation of the legality of such strategies (at least under English law). In attempting to demystify the subject, this article looks at what is actually involved in registering and enforcing a trade mark before considering the balance that may need to be struck by studios looking to register and enforce their trade marks, adopting a robust trade mark strategy that protects their interests without alienating parts of the gaming community on which their business is reliant.

Registration

A registered trade mark grants the owner the right to prevent third parties from using that trade mark in relation to the goods and/or services for which it is registered in certain circumstances, discussed in more detail below. The connection between the 'trade mark' and the 'goods and/or services' for which it is registered is important, as the latter defines the scope of the trade mark owner's exclusive rights. There are several ways in which trade marks can be registered. Firstly, protection can be sought on a country by country basis, by applying to the trade mark office of each country individually (for instance the USPTO in the US or the IPO in the UK). Alternatively, those seeking protection in several countries at once, can file an application under the Madrid Protocol. Broadly, this allows an owner of a trade mark that has been registered in any of the countries that is a signatory to the Protocol to file an international application to seek protection in up to 88 countries that are currently signatories to the Protocol simultaneously. The applicant must then comply with the requirements and formalities of the application process in each country chosen. If successful, the rights holder is granted a national trade mark in each country.

"those seeking protection in several countries at once, can file an application under the Madrid Protocol"

In Europe, there is a further alternative in the form of the Community Trade Mark (CTM). CTM applications can be submitted via the local intellectual property office of any EU member state, or centrally to the Office for Harmonization in the Internal Market (OHIM). Unlike applications under the Madrid Protocol, applying for a CTM requires only one application. Once registered, the CTM covers all 28 member states of the European Union. The remainder of this article will focus on CTMs. Once a CTM application has been submitted, it proceeds to the examination stage, during which OHIM will examine the application and refuse it on 'absolute grounds' or for non-compliance with certain application formalities.

'Absolute Grounds' For Refusal

Article 7 of the CTM Regulation sets out a list of eleven 'absolute grounds' on which a trade mark will not be registered as a CTM. The three most relevant grounds for the purpose of this article are:

(i) trade marks which are devoid of any distinctive character;

(ii) trade marks which consist exclusively of images or words which are descriptive of the kind, quality, quantity, intended purpose, value, geographical origin, time of the production of the goods or the rendering of the services, or other characteristics of the goods and/or services in respect of which registration of the trade mark as a CTM is sought; and

(iii) trade marks which consist exclusively of images or words which have become customary in the current language or in the bona fide an established practices of the trade (in other words, generic trade marks).

These grounds define the underlying essence of what a trade mark is meant to be - namely a badge of origin which serves to distinguish the goods and/or services of one business from those of another. A trade mark which is devoid of distinctive character will be unable to do so (for instance the word "Super" or "Value" may by itself lack distinctive character). The same is true of a trade mark which is descriptive of the characteristics of the goods or services for which it is registered (for instance "Video Game" for video games) and a trade mark which has become a generic term (for instance "Escalator", "Aspirin", "Hoover", etc.).

It is important to note that there is no rule preventing the registration of a commonly used word as a trade mark generally, provided it does not fall foul of these grounds (and meets the other requirements of registration not discussed here). So while an application to register "Pages" for "printed matter" is likely to be deemed descriptive, an application for "Pages" for "computer programs" may not be (and is, in fact, a registered CTM belonging to Apple Inc.). Similarly, an application to register "Candy" for "candy bars" would obviously be descriptive, but an application to register "Candy" for "video game software" may not be.

"an application to register 'Candy' for 'candy bars' would obviously be descriptive, but an application to register 'Candy' for 'video game software' may not be"

An important caveat is that a trade mark which otherwise falls foul of the absolute grounds listed above may nevertheless be valid if the applicant can show that the trade mark has acquired distinctiveness through use. This is a difficult threshold to overcome, but can be achieved through, for instance, the consistent use of a trade mark over an extended period. It is the responsibility of the applicant to ensure that its trade mark does not conflict with any other trade mark. This is usually done by carrying out appropriate 'clearance searches' in the relevant territories before filing which, as a minimum, should include a search of the registries of the relevant trade mark offices.

Opposition/Revocation

Once the CTM application has been examined, the CTM is published on OHIM's register and enters the opposition period which lasts three months from publication. During this period, any third party can oppose registration of the CTM on the grounds that:

(a) it is identical to an earlier trade mark and the goods and/or services for which registration of the CTM is sought are identical to the goods and/or services for which the earlier trade mark is protected;

(b) it is either identical or similar to an earlier trade mark and the goods and/or services for which registration of the CTM is sought are either identical or similar to the goods and/or services for which the earlier trade mark is protected and there is a likelihood of confusion on the part of the public in the territory in which the earlier trade mark is protected; or

"Opposition is not only a mechanism for ensuring there are no overlapping registrations, but also an important tool for rights holders of existing trade marks"

(c) it is either identical or similar to an earlier trade mark (but is to be registered for different goods and/or services) and the earlier trade mark has a reputation in the relevant territory and the use without due cause of the CTM would cause one of three types of damage, informally known as "dilution of distinctiveness", "free-riding on the earlier trade mark's reputation" and "tarnishment of the earlier trade mark's reputation".

Opposition is not only a mechanism for ensuring there are no overlapping registrations, but also an important tool for rights holders of existing trade marks to protect the value of the exclusive rights granted to them in respect of their existing trade marks.

Once registered, the owner of the CTM must put it to use in the form that it is registered and in relation to the goods and/or services in respect of which it is registered within five years of registration. Failure to do so (or any subsequent consecutive five-year period of non-use) will make the CTM vulnerable to an application for revocation for non-use, which can be made by any third party.

Trade mark owners must also ensure that that their CTMs do not fall foul of any of the 'absolute grounds' referred to above during the CTMs lifetime

To ensure a trade mark does not become generic, for instance, trade mark owners may seek to enforce their marks against those who use them as a generic term, or attempt to educate the public as to how the marks should be used using marketing materials (some may recall the XEROX 'anti-genericide' campaign in the early noughties which told consumers "When you use 'xerox' the way you use 'aspirin', we get a headache").

In order to maintain a CTM's distinctiveness, the rights holder must stay on the lookout for other trade mark applications being filed for similar trade marks in respect of similar goods and/or services, and be ready to oppose them where appropriate. Failure to do so is likely to have the effect of eroding the CTM's distinctiveness by undermining its ability to perform its essential function (i.e. to act as an identifier of origin of goods and/or services). The filing of oppositions is thus a routine part of the portfolio management process of any sophisticated rights holder.

"In order to maintain a CTM's distinctiveness, the rights holder must stay on the lookout for other trade mark applications being filed"

Another reason to file oppositions promptly is that, if the owner of a CTM allows a similar trade mark that it is aware of to be used for a period of five successive years, the CTM's rights holder may no longer be able to apply for a declaration that the other later mark is invalid or to oppose the use of that trade mark in respect of the goods and/or services for which it has been used, unless that trade mark was applied for in bad faith (which can be difficult to prove).

Enforcement

The test for infringement of a CTM is essentially the same as the test for opposition discussed above, except that, instead of comparing an earlier trade mark with an application for a later trade mark, the comparison is between a registered CTM and the use of a trade mark by a third party in the course of trade.

CTMs are ultimately enforced by bringing proceedings against the infringer to seek certain remedies such as an injunction to prevent further infringement, damages or an account of profits, interest and legal costs.

However, in a global economy, it is often the case that the infringing party is located in another jurisdiction. This brings an added layer complexity and cost to an enforcement action.

While owning a CTM simplifies enforcement to some extent (for instance, the Court of Justice of the European Union has held that a national CTM court does have the power to grant a pan-European injunction to prevent infringement, in certain circumstances) it does not avoid the problem altogether, and engaging in complex cross-border proceedings in many cases remains the preserve of well-funded rights holders.

"the registration and enforcement of trade marks which consist of commonly used words is not a new phenomenon, nor is it unlawful"

Community Opinion

In summary, the registration and enforcement of trade marks which consist of commonly used words is not a new phenomenon, nor is it unlawful. One of the reasons why studios have come to rely on trade marks is to address the ongoing problem of game cloning. This is partly due to the inherent difficulty studios face in protecting the functionality and gameplay of a game (as opposed to its visual elements or underlying source code). Whilst this is not what the law of registered trade marks was originally intended to be used for, in many cases there is no other viable alternative. Until the issue of game cloning is properly addressed through legislation, it is likely that rights holders will therefore remain heavily reliant on trade marks.

As recent high-profile trade mark disputes demonstrate, the gaming community remains a vocal force to be reckoned with. Rights holders operating in this space may therefore need to factor in the commercial risk of pursuing trade mark registration and enforcement strategies which are seen by the games community to be overly aggressive or otherwise unconscionable. Simply ensuring that a trade mark is registered for goods and/or services that are a fair reflection of the goods and/or services in respect of which the trade mark is intended to be used may not be enough.

This clearly puts studios in a difficult position strategically. However, as no studio wants its reputation affected by negative publicity or to ostracise itself from the community on which it relies on for talent, expertise and indeed business, taking account of the community's opinion when deciding upon their trade mark strategy is a delicate balancing act that studios must get right.

Kostyantyn Lobov is an associate at London law firm Harbottle & Lewis. He advises on disputes involving intellectual property and related rights.

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