Likelihood of brand infringement for SMEs

On average, 27.5% of small and medium sized enterprises in our sample have experienced brand infringement in some form over 12 months. This means that 1 in 4 companies can be expected to encounter brand infringement each year. 

Industry-specific differences should however be noted. The highest prevalence of brand infringement was encountered by e-commerce companies which in addition to the more general threats (i.e. new company being established; new trademark application being filed) also experienced both coincidental and deliberate brand infringement on various e-commerce (e.g. Amazon, AliExpress) and social media platforms (e.g. TikTok, Instagram).

The second aspect that affects the prevalence of brand infringement is obviously the size of the organisation. While coincidental brand infringement affects smaller businesses regardless of their revenue, deliberate brand infringement is increasingly more prevalent for companies that exceed $500K in annual revenue.

The most prevalent types of brand infringement experienced by small and medium sized enterprises in our sample included:

1) New company being established (showing significant similarity to the brand name & overlap in business area): 11.8%

2) New trademark applications filed (showing significant similarity to the brand name & overlap in goods and services provided as well as country of operation): 10.3%

In terms of prevalence, the two more general types of infringement outlined above were followed by brand infringements on e-commerce, social media and other online platforms. In these cases, the infringements took a variety of forms, including fake profiles and listings.

3) AliExpress: 2.6%

4) eBay: 2.4%

5) Amazon: 2.2%

6) Facebook: 1.9%

7) Temu: 1.8%

8) Youtube: 1.8%

9) Instagram: 1.7%

10) TikTok: 1.4%

11) Shein: 1.3%

12) Google Play: 0.9%

13) App Store: 0.8%

14) Web domain: 0.7%

15) Etsy: 0.4%

While brand infringement may be limited to a single area or platform, in reality, the uncovered brand infringements often affected the SMEs in our sample through multiple channels. An example can be made of the pair of social media platforms Facebook and Instagram. The vast majority of brand infringements experienced on Instagram was also observed on Facebook. A similar observation was made when it comes to brand infringement on Google Play (0.9% of sampled companies experienced infringement) and App Store (0.8% of sampled companies experienced infringement), with 0.7% of the sampled companies experiencing brand infringement simultaneously on both of these platforms. A breakdown of these cross-platform infringements within the studied sample is provided below.

While 27.5% of the smaller companies included in our sample experienced some form of brand infringement over the period of 12 months, only 3.9% have experienced deliberate brand infringement as characterised by the counter-party purposefully copying or imitating the original brand. Conversely, 17.1% of companies experienced something we can label as coincidental brand infringement. In these instances, no clear link nor clear signs of deliberate conduct were uncovered. The counter-party seemed to have adopted a confusingly similar brand name without any prior knowledge of the original brand. For the remaining 6.5% of companies that experienced brand infringement, it was rather unclear whether they represented coincidental or deliberate type of brand infringement.

Effective response to brand infringement takes into consideration the type of the infringement as well as the contextual factors. Starting with the coincidental type of brand infringement as this is the more common type of infringement experienced by smaller companies, the effective response is dependent on the early discovery. A simple notification or a friendly warning letter may in fact be sufficient to make the counter-party aware about the clashing rights and encourage them to engage in voluntary re-branding. This solution is however more likely at the start of the counter-party’s entrepreneurial journey, while they are not too heavily invested in their brand. 

Furthermore, a wide variety of legal means can be used to protect the original brand’s rights, including platform takedowns, cease and desist letters, trademark opposition proceedings, and ultimately litigation. The effectiveness and in some cases even applicability of these tools however declines over time as from a legal standpoint, sustained co-existence of two similar brands over a longer period of time is reasonable evidence that no damaging impacts are experienced.

On the other hand, deliberate brand infringement requires a thorough analysis of the specific nature of the case and strategic response. While simple cases of deliberate infringement can be effectively silenced with the use of online platform takedown mechanisms, a more complex approach is often required to discourage better organised brand infringement attempts.

In the cases of both coincidental and deliberate types of brand infringement, early recognition of the threat is absolutely crucial in devising effective response.