TRADEMARK SQUATTING & CROSS-BORDER
PROTECTION
-Henrietta Newton MartinBlaise Pascal is said to have remarked " “What a Chimera is man! What a novelty, a monster, a chaos, a contradiction, a prodigy! Judge of all things, a feeble worm; depository of truth, and sewer of error and doubt; the pride and refuse of the universe.” To that, I may add, what is a law if there is no impact, and what is a law if it doesn't meet its purpose? Several laws are in place in the intellectual property arena but still, we talk about the challenges, as the famous adage goes there are two sides to a coin. It may not flabbergast some of you when I say that in recent years trademark disputes have become a subject of corporate war with corporate giants battling their way out of trademark misuse or abuse. And Trademark squatting has become a menace in recent years. Well, confining myself to the topic assigned, i.e. Trademark squatting: Protecting Trademark across borders, I wish to pinpoint some key areas that deserve your attention.
What has been done to obliterate trademark squatting over the years? Nothing much really!
Until 2022 it has been observed that only judicial precedents have been laid and judicial inferences drawn in the light of the circumstances of each case and each country is left to statutorily fend for itself. If one carefully reads the 26 WIPO treaties, the clauses are wide and again offer no real solution to the trademark squatting menace. I am not talking about papers and opinions here. We need stringent binding provisions. Let me begin by narrating a story to set the perspective, a story that most of us are familiar with. And in our world of law, we call it a judicial precedent that is set in a case/litigation.
The Apple Story!
In RXD Media, LLC v. IP Application Development LLC, No. 19-1461 (4th Cir. 2021) – [ Taken from the Judgement extract]1i
In the year 1990, Apple released a series of “i-products,” including “the iMac,” ( ‘i” here means internet) a desktop, an “iBook,” and a laptop Further in 2001, Apple released the first-generation “iPod,” a handheld music device, clubbed with “iTunes (support program for iPod). As we all know that “iPod” gained popularity and then it launched a series of generations and variations of the hardware. With each new generation, the device upgraded in functionality and in terms of better-quality video, audio, picture, photo games, etc.
Then in 2007, Apple launched its first iPhone.
Then while Apple was booming with its iPhone, RXD launched a “mobile Internet notepad” and called it “IPad. mobi”. It served the purpose of jotting points, making notes, noting to-do – lists, etc further in September 2007 RXD launched its website detailing the product. But this RXD’s product was not a commercial hit. Further on in
1 PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 19-1461-Judgement Extract RXD Media, LLC v. IP Application Development LLC, No. 19-1461 (4th Cir. 2021
2010, Apple launched this so-called controversial device called “iPad,” a touch-screen tablet, and simultaneously sought the “intent-to-use” trademark protection under the Lanham Act, USA for the “iPad” mark and filed relevant applications (446 & 563) with the United States Patent and Trademark Office.
Apple engaged in eight other “iPad” registrations, of which the Fujitsu, Inc. registration it filed in March 2003 and registered in 2010. After Apple filed the relevant applications of 446 and 563 before the US P& T office, RXD filed its own trademark applications in 2010 for protected use of the “iPad” mark. RXD’s applications were suspended by the Patent and Trademark Office in 2012 pending the resolution of Apple’s applications. RXD opposed Apple’s applications, instituting adversary proceedings, and then began the legal drama and conundrum
RXD contended that Apple’s use of the mark constituted unfair competition and clouted the principle of “First user”. Apple contended that RXD had the intention of confusing its consumers.
Long story short, there was an appeal that was concluded in 2021 by the Court of Appeals and Justice Keenan upheld the decision on the District Court of injunctive relief and finally ruled in favour of Apple and concluded that “Apple had a bona fide intent to use the mark for the services listed in its application”.
And reports say that Apple had to expend approximately $3.6 million to get the trademark back. So, this is a classic case of trademark piracy or trademark squatting.
Trademark squatting or trademark piracy thereby simply means unauthorized use/ registration of a trademark of a brand that primarily belongs to someone else, now which may be intentional or even unintentional and even more. In some cases, a squatter may register a trademark with the intention to sell it to a party who may be a counterfeiter Contradictory trademark registrations may not always be the result of malicious intent, but it becomes a matter of concern when it is deliberate and used to confound and make profits at the cost of squatting. Now, this amounts to bad faith, filing, and facilitation.
The World Intellectual Property Organization defines trademark squatting as “the registration or use of a generally well-known foreign trademark that is not registered in the country or is invalid as a result of non-use.” World Intell. Prop. Org., WIPO Intellectual Property Handbook, 90 (2008).
Trademark squatting is the “registration or use of a generally well-known trademark that is not registered in the country or invalid due to non-use”. (WIPO)
Thus, what we are referring to here is just not mere trademark infringement or mistaken filing but a deliberate attempt to file /register a trade mark in some other country where the brand may not be prominent and then extort money from the original brand owner.
For instance- apple again, where its trademark iPad was not registered in China, and where it had to shell out 60 million to get back its own trademark iPad from a Taiwanese company which was a Chinese subsidiary called Proview.2
Thereby in trademark squatting as lawyers or in-house counsel I believe the intent of the party needs to be checked as well as the impact
Let me substantiate this further with the Samsung case
As reflected in the famous Samsung case, Samsung applied for an EU trademark (EUTM) in 2016 to protect the name of its new phone application ‘Bixby’. This was opposed by the Pakistan registrant of the ‘Bibby’ trademark, later registered in the Benelux (Belgium, Netherlands, Luxembourg) region. In this case, the court invoked the doctrine of bad faith.
Again, long story short, the Higher Court of The Hague concluded (concurring with the Court of First Instance) that the alleged trademark squatter did indeed act maliciously And adjudicated in Samsung’s favour, by nullifying the ‘Bibby’s trademark and ordered the trademark squatter to pay Samsung’s legal costs.
There are two principles that are invoked depending on the jurisdiction, i.e. 1. First to use 2. First to file Countries that follow the Common Law regime follow the rule of ‘first to use,’ where usage’ plays in establishing the strength of a brand owner’s rights over its mark which means trademark owners can obtain trademark registration even if there is similar trade mark already on the Register provided that they prove preceding use. Civil law countries on the other hand have adopted the ‘first to file,’ norm where only ‘registration’ may grant a brand owner enforceable right.
Apropos UAE, we are a civil law country, and the most recent 2021 Trademark promulgation I.e. Federal Law No 36/21 explicitly forbids “forging” ( the term used is anyone who forges) a duly registered trademark that is in compliance with the law and using such a forged/counterfeit trade mark for commercial purposes, launching a product in bad faith with the trademark owned by others, imports or exports goods that bear a forged counterfeit trade ark, or even possess tools or materials with the intention of using or forging counterfeit registered or wellknown trademarks. The penalty imposed under the law for engaging is imprisonment for up to one year and a fine of between AED 100,000 to AED 1,000,000, or either of the two penalties. Further, an interesting section in the law if Article 50. Article 50 of the law conveys that whoever “sells or offers for sale or circulation or possesses with the intention of selling goods or offers the provision of services carrying a forged, an imitated, or unlawfully put or used Trademark, despite his knowledge thereof” will incur a penalty of imprisonment of up to one year and/or a fine of between AED 50,000 to AED 200,000. In the event of a repeated offense, the penalty shall be twice the maximum penalty prescribed for the crime.
Depending on the facts and circumstances of each case, the jurisdiction, and the client may be advised to file a civil suit as well as bring a criminal charge.
We are still in the process of building the law in that area. However, UAE is a party to a number of international treaties relating to intellectual property such as the Berne Convention, the Paris Convention, the Rome Convention, the WIPO Copyright Treaty, the Patent Cooperation Treaty, the TRIPS agreement, and the Madrid agreement and protocol.
Article 6bis of the Paris Convention and Article 16 of the TRIPS Agreement explicitly detail that trans-border reputation is a significant element and provide that if a mark has not been used in a specific country but has established some reputation in that country as a result of its international usage, the trademark may be protected in that country
[ bis means second – an article added in between]
Living in a world which is said to have no borders when it comes to business and trade, what is the solution for the risk of trademark squatting? How can one curb or better obliterate the agony of trademark squatting or destroy this hidden monster? We need to discourage trademark squatting and not just prevent or implement solutions as a victim or for the victim.
• Some Lawyers advise blocking the doors to a squatter so one can register a trademark in China because most of the cases are apparently rising from China. But the question is – Is it a prudent tool to obliterate trademark squatting? It surely may combat, or even resolve but not obliterate.
• Some countries like India boast of clinging to the first-to-use principle and upholding the trans-border reputation of the trademark and the remedy of “passing-off” (tort)[ which we all know requires proving three elements, i.e. prevalence of a reputation or goodwill, damage caused, and the that there has been a misrepresentation]. So accordingly, due to stringent mechanisms prevalent, it may be difficult for squatters to go scot-free.
• On the other hand, if there is a case of trademark squatting the most common solution advised to a victim is either 1. Contest/litigate, deregister or enter into a bi-partite agreement with the squatter and get back your trademark. Is this prudent again? It seems to me like a hide-and-seek game.
• Thereby we have solutions to combat but no tools to discourage or obliterate this act of TM squatting.
So, what more can be done? I propose to bifurcate my further discussion on resolving the issue of ‘What can be done’, at a macro and then at a micro level.
At a macro level who else besides WIPO can lead? A strategic move is a key. WIPO should come up with stringent general regulations on TM squatting that would help curb trademark squatting. But again, the proposed convention clauses must reflect rational clauses that can be plausibly yet effectively implemented by member countries. The recommendation and suggestions as to what can be those strategic clauses, I guess can be divulged at a different platform.
At a micro level
1. One reaffirming move would be to conform to the Madrid Protocol norms for filing – i.e. filing through the Madrid Protocol system and can cover several countries, precisely around 112 countries are a signatory to the Madrid Protocol, which means one covers those countries. On the other hand, registering /Filing in maximum jurisdictions (by that I mean key jurisdictions or prospective jurisdictions, where one anticipates doing business) is a viable option and that is what most of us do as part of a company’s IP team today.
2. Adopt the tracking system- Companies can track registered trademarks by using a particular software that monitors & tracks trademarks and registrations.
3. And what would make a difference is that each country fortifies its Trademark Laws in consonance with WIPO policies and the various conventions and treaties each country is a party.
4. Do you know how APPLE has tried to shield itself? But now how has Apple decided to safeguard its trademark? Apart from the other measures, Apple has listed all its trademarks online on its website with certain policy specifications
And lastly, I can only conclude with an opinion based on my experience. It largely depends also upon legal counsels with eagle eye vision who are equipped with the distinguished skill to foresee, and astutely thwart such conflicts in one’s expertise and support the organization we are attached to or client as the case may be. Drafting effective internal policies on trademark squatting would certainly prove to be an effective mechanism to thwart as well as in the long run obliterate trademark squatting.
REFS
• https://www.wipo.int/treaties/en/ip/paris/
• 19-1461-Judgement Extract RXD Media, LLC v. IP Application Development LLC, No. 19-1461 (4th Cir. 2021
• Trade Mark Squatting. Kitsuron S, Wisconsin Law Journal 2013 page 256
• WIPO official webpage
• Image credit: Google Free Images
©Henrietta Newton Martin 2023
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