Two Apples, a Football Tournament and a bunch of Trademarks
Case 1: A tale of two Apples…….
Two recent Judgements, one an English HC decision1, the other a ruling before the German Federal Supreme Court2, highlight some of the basic requirements for obtaining a Registered Trademark and the scope of protection afforded by that Registration. The Rulings also teach us that Trademarks need to be distinctive and give us some rules as to how we should use Trademarks to protect the specific goods and services to which they are applied.
Fundamentally, these decisions reinforce some of the basic truths about Trademarks. That is, that ultimately all Trademarks are relevant to trade, to commerce and to business. They are not monopolies over chunks of language, or over an entire market. Descriptive language is free for all to use – as is language which is used descriptively and not used in the course of trade as a means of distinguishing one traders good from another.
In the first case of Apple v Apple it was found that there is no risk of confusion between two similar Apple logos (marks); that ipod users are an aware and computer savvy bunch, and that both Apple marks can co-exist in the music industry - albeit in relation to separate areas within the trade. The moral of the story is that Trademarks are bound to the good & services to which they are applied and to the particular trading channels in which they bought and sold.
Also, and refreshingly, the Judge has also ruled that consumers have brains and are not easily misled. That is, they frequent the real world and not one that is populated by Trademark attorneys or corporate advertising people.
Having said this, may I first provide you with a little background most of which you will probably already have some knowledge. The present case involved the claimant Apple Corp (famously the Beatles record label) and the defendant, Apple Computers, an equally well-known producer of computers and software.
In this case, Apple Corp complained that Apple Computers “has broken, and intends to break, an agreement made between the two companies in October 1991 which regulated the use of their respective marks in respect of various areas of activity or proposed activity.” Specifically, Apple Corp claimed that the US firm had an agreement ensuring there would not be two Apples in the music industry…. Or so they thought.
But Justice Edward Mann ruled that the Apple computer company used the Apple logo in association with its store, not the music, and so was not in breach of the agreement. That is, the iPod and iTunes did not infringe the trademark because they are both merely ways of conveying music and have nothing to do with the creation of the actual music itself. The conclusion reached was that the area of trade covered by the agreement had not been encroached. This ruling in effect means iPods and iTunes will still be able to carry the Apple name and logo.
Justice Mann in a further passage said that iTunes was "a form of electronic shop" and the presence of the Apple Computer logo on the service did not suggest "a relevant connection with the creative work [itself or the process of creating the work]". He also intimated that consumers in this trading channel would not be easily confused.
"I conclude that the use of the apple logo ... does not suggest a relevant connection with the creative work," he wrote in his judgment. "I think that the use of the apple logo is a fair and reasonable use of the mark in connection with the service, which does not go further and
unfairly or unreasonably suggest an additional association with the creative works themselves."
Finally, it was found that Apple Corps must pay its Apple Computer’s legal bill which may be as much as £2m, although Justice Mann refused a request for an interim payment of £1.5m pending further court hearings.
This Apple Court Victory comes after a series of reversals where it had previously been decided that use of the apple logo in relation to music was an infringement of the Beatles Exclusive rights. The war between the two apples has been waging since 1981, and looks likely to continue.
Neil Aspinall, a spokesman for Apple Corps stated that “With great respect to the trial judge, we consider he has reached the wrong conclusion”.
Apple Corps will appeal the decision.
Case 2: You say Football, I say Fussball – lets call the Whole thing Off…… FIFA Trademarks and the World Cup 2006
This case involves FIFA – the Football World Cup organising committee attempting to monopolise the words FUSSBALL WM 2006 and WM 2006 for Goods & Services relating to “organization of sporting events, namely football world championships”.
However, in a series of decisions ultimately ending with the German Federal Supreme Court it has been decided that the marks FUSSBALL 2006 and WM 2006 are lacking in the necessary distinctive character required to gain Trademark registration and are descriptive references to the World cup. This is an important finding and a major set back for FIFA as it allows all traders to use these terms on their goods and for their services and consequently take advantage of the Football world cup in their efforts to market and advertise their products. The court ruled emphatically that the terms are free for all to use and should remain available to the general public to describe the event and products & services surrounding the event using these terms without restriction.
In its decision the Court agreed that the terms were descriptive of the Football World Cup 2006 and for services relating to it. Such services will commonly involve travel and booking agencies, advertising, media services and generally to services associated with commercialising the World Cup. Consequently, the FIFA marks have been cancelled and the terms are now publicly available to those trading in sports goods, footwear, clothing, promotion, travel, and advertising and importantly to those selling souvenirs of the event.
There is one outstanding matter to be addressed, that being the use of the mark WM 2006 in relation to merchandising of certain goods not covered above – so those few traders that are affected, such as butchers, restaurant proprietors, shopkeepers and hoteliers please take note – as this matter is still to be decided.
It is important to learn from these decisions that no matter the size of your company or its influence you cannot capture language which is descriptive, nor can you monopolise an entire market simply by registering a Trademark. The Brand needs to be protected, nourished and be aware of an often changing market. Brands you see don’t just stand still, the can be grown and managed – but just as easily they can wither and loose their lustre.
So, for SME’s, Start-ups and those wishing to gain a foothold into a market it is imperative to create a brand which sets your goods and services apart from your competitors. This is why nearly all of the successful long term businesses have
Brands which are either invented words, or words which have no relationship to any characteristic of the product or service.
So what are the Do’s & Don’ts for Choosing a Brand?
Well, let’s just say that you have finally fled the shackles of working for the corporate and are about to embark on a fine new venture. You are looking at choosing a new brand for your product or service.
The first thing that most of us think about is a name which describes what the product or service is. Marketing people will often tell you that such a name is much easier to sell and will gain immediate recognition with relevant consumers.
In the short term, they are right, but in the medium or long term (probably anything from 6 months upwards) this advice is very badly wrong.
A name which describes the product or service, or something desirable which might be achieved as a result of the product or service (for example FAST for a postal delivery system) is one which can easily be adopted by imitators coming onto the market.
The main risk that you run is that your business will be successful, and then an imitator, who might well be a former staff member, comes onto the market with a similar name. If your original name was descriptive of some feature of the product or service, you will not be able to stop that similar name from getting onto the market, and taking a share of the market niche which you have established.
This is why nearly all of the successful long term businesses have brands which are either invented words, or words which have no relationship to any characteristic of the product or service.
Therefore, if your business is to be successful in the long term, the name which you choose for it will be very important. It is not coincidence that the three most successful internet companies are named Amazon, Google, and E-bay, when competitors with names such as Priceline, U-Bid, and E-toys have been relatively unsuccessful. While clearly there is an element of luck, and perhaps an element of good management, the selection of a name which is does not directly describe any characteristic of a product or service is a critical factor in the long term success of the operation.
Now comes the hard part - the selection of a suitable name. As discussed, the very best names are totally invented words. The best Trademarks are usually between 4 and 8 letters long, and have no discernable meaning in any language. It is quite easy to invent a few words. If you just sit down with a scrabble set or pencil and paper, and combine elements of your own name, you will soon come up with a number of invented words. The hard part is making the mental leap into adopting them as brands. Any suitable word will sound terrible. Therefore, there is absolutely no point in carrying out any market research, as the market research will point you in the wrong direction. However, you should carry out some research amongst people who speak a range of foreign languages. There is little point in making the same mistake as Mitsubishi did in the selection of the name PAJERO. In Spanish, this is the equivalent of the word "wanker". Needless to say, they have had to adopt a different
Trademark in Spanish speaking countries.
When you have selected a number of suitable words, the next step in the process should involve a review those words and a Trademark availability/Infringement search, certainly in the immediate country in which the products or services are to be sold, and with a little foresight into those countries seen as potential export markets.
Most IP firms can carry out a quick computer based screening search covering the US, UK, European Community Trademark databases, New Zealand and Australia at relatively modest cost, bearing in mind the future investment which you will be making in the brand – and the money is well spent.
If an invented word proves too hard, you can adopt a word of the English or any other language which has absolutely no meaning in relation to the characteristics of the product.
These words are not quite as good brands as invented words, but they will often prove adequate.
Two examples from the computer field are the words WINDOWS and APPLE…. Or are they?
Another point to consider when creating a Brand is to at all times keep in mind the image that your are wanting to create. In many cases using words or images that are evocative and carry with them an easy to remember picture work best. It is no coincidence that many strong brands are remembered just as much by their association with an animal, castle, or symbol than for the name itself.
Choosing a Brand – the Don’ts
Some don'ts are:
• Avoid using a surname. You will find it hard to stop other people with the same name from competing with you. Consequently, you will also find it hard to register the brand in most countries.
• Avoid geographical names. These cause a number of problems. Firstly, you cannot stop other people from using the name as a correct descriptive term. Secondly, if you get outside a particular geographical area, the name may no longer be appropriate. Thirdly, if you elect to source the product from a different source, you may be in breach of Fair Trading Laws in many countries.
• Avoid all words which simply suggest good features of the product, for example the words best, prime and superior can easily be used by others to describe their goods or services, and therefore are not good brands.
• Short three letter brands are not particularly strong. Although some are well known, such as IBM, and BMW, these have been forced on their owners because the original words used to make up the trademark are descriptive. They are always quite easy to imitate, for example, it would probably be possible to launch a computer under the Trademark IBE, without infringing IBM's Intellectual Property rights.
• Avoid combinations of trendy or computer type buzzwords. There are simply too many businesses around with names like comsoft, microserve etc. These names are very easy to forget, as there are so many of them. They simply lack the distinctiveness necessary to become strong brands, unless they are hugely successful for other reasons, for example Microsoft.
Armed with this advice – the next step is to look at registering your Trademark and to carry out an Audit of all of your IP – especially your copyright and take steps to protect your rights to its exclusive use. But that is another Story.
1 Apple Corps Ltd V Apple Computer Case Nr HC 2003-C02428
2 Joined Cases 32 W (pat) 238/04 and 32 W (pat) 237/04, August 3 2005.
If you have any thoughts, comments or additions to the above discussion please e-mail * icockburn@piperpat.com to begin a dialogue, or conversely consult an IP professional to determine best fit branding strategies for your firm.
Disclaimer: PIPERS endeavors to be as accurate as possible when preparing its articles and has taken all reasonable steps to ensure that the information contained herein is accurate. The contents of this article are for purposes of information only. If you require any clarification, please seek the advice of an IP professional or contact http://www.piperpat.com/
* The author is WebEditor, Manager Advertising & Marketing at PIPERS - Global, A Patent attorney Firm with Offices in the United Kingdom, New Zealand, Australia, Singapore and Malaysia.
Two Apples, a Football Tournament and a bunch of Trademarks - To learn more about this author, visit Ian Cockburn's Website.
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