Trademark infringement is the unauthorised use of a registered trademark by any third party on any goods or services identical to the goods or services specified on the register. According to general trademark laws, a registered trademark is infringed when the infringer, without obtaining consent from the registered trademark holder, uses an identical logo or a name for its goods or services despite the possibility of confusion by the average consumer. Examples of trademark infringement include instances in which one company sues because it contends that another company is profiting from its trademark without approval. Infringement cases can occur between big and small companies, but the company size rarely influences the outcome of such disputes. This year we have witnessed multiple infringement cases that are expected to provide further guidance on best practices for protection, enforcement, and fair use.
Red Bull v. Bullards
In February 2021, Norwich-based spirits firm Bullards, which has about ten staff and can trace its name back to 1837, received a letter from lawyers acting for Red Bull opposing its application to register Bullards as a trademark. In its letter, the Austrian soft drinks giant informed Bullards that there is a “likelihood of confusion on behalf of the public” with regards to both brand names, including the word “bull”. Contrary to Red Bull’s claims, the founder of Bullards stated that there is no likelihood of confusion since Bullards Spirits never did or intended to produce energy drinks. Red Bull stated that it was willing to resolve the dispute if the gin firm removed a series of goods and services – including energy drinks, non-alcoholic beverages, and events – from its trademark application and registration. As Bullards is a small family-owned business, both settling for the conditions put forward by Red Bull and going against the corporate giant would result in great expenses that could be detrimental to their business. Nevertheless, the English brewery went with the second option and proceeded with its trademark application. In October 2022, the UKIPO ruled in favour of Bullards, stating that, although both trade marks shared a common element, this was not sufficient to confirm the existence of the likelihood of confusion.
Cases of multinational companies putting claims against much smaller businesses are far from uncommon, but their result is almost always the same - significant loss of reputation in the eyes of consumers for the corporate giants. Earlier this year, multiple well-known brands, such as Hugo Boss and Oatly, faced significant backlash after issuing cease-and-desist letters to smaller companies. Companies exercising strict enforcement of their intellectual property rights should keep in mind that every attempt to establish a monopoly over descriptive terms can cause a negative public reaction that can even threaten the company’s sales.
Banksy v. Full Colour Black
Pest Control, the company that has been in charge of authentication of Banksy's work since 2008, first filed an EU trademark for his "monkey sign" work in November 2018, which was registered in June of the following year. In 2019, the greeting card company Full Colour Black formally opposed the trademark, claiming that it was filed in "bad faith". In 2021, EUIPO upheld the claim stating that, at the time of filing, Banksy had no intention of making genuine use of the trademark and that his true intention, similar to Hasbro, was to circumvent the legal requirement of proving genuine use. At the end of October 2022, however, the EUIPO's Fifth Board of Appeal overturned this decision, proclaiming in R1246/2021-5 that after further review, the arguments and evidence provided by Full Colour Black did not support any evidence of "dishonest behaviour" on the part of Bansky. It concluded that "consequently, the presumption of good faith is still valid, and the cancellation applicant failed to prove the contrary." This decision allows Banksy to keep the trademark rights of his monkey image while maintaining anonymity as a registered trademark owner.
Hermes International v. Mason Rothschild
In December 2021, Mason Rothschild created digital images of faux-fur-covered versions of the luxury Birkin handbags of Hermes International and Hermes of Paris. Rothschild titled these images "MetaBirkins" and sold them using so-called "NFTs" (non-fungible tokens). In response, Hermes filed a complaint, claiming trademark infringement, trademark dilution, and cybersquatting. According to Hermes, Rothschild's NFT collection is "likely to cause consumer confusion and mistake in the minds of the public." Rothschild argued that his MetaBirkins digital images, which depict Hermes' luxury handbags covered in fur, are works of art where the physical Birkin bag serves as merely the subject of an otherwise transformative digital expression.
In May 2022, U.S. District Judge Jed S. Rakoff issued a written decision refusing to dismiss Hermes' trademark infringement claims. The court held that trademark infringement could exist even as applied to artistic expression if the artistic expression was created to explicitly mislead consumers. In this case, the court is leaving open the question of whether Rothschild's use of the "Birkin" trademark was intended as a source indicator for purposes of trading off the brand reputation of Hermes' Birkin handbags or, rather, as the title of artwork to which First Amendment protection should apply.
The lawsuit gave Hermes the necessary push to extend its IP protection to the realm of digital goods, as shortly after, Hermes filed its first trademark application to protect its name in the Web3 space in August of 2022. The applications for digital goods and services further surged after the recent lawsuit against the sneaker resale marketplace StockX LLC, which Nike accused of minting non-fungible tokens that use its trademarks without approval and selling them at inflated prices. The registration of trademarks in the virtual world provides brands extra protection in the event others attempt to use the brand in an unlicensed way.
Jack Daniel’s v. VIP Products
In July 2014, Phoenix-based dog toys company VIP introduced the "Bad Spaniels" toy, which mimics Jack Daniel's whiskey bottle. Shortly after the launch, Jack Daniel's sent VIP a cease-and-desist letter. Tennessee whiskey distillery claimed that VIP Products LLC markets and sells dog toys that trade on the brand recognition of famous companies such as petitioner Jack Daniel's Properties, Inc. In response, VIP sued in Arizona federal court, seeking a declaration that Bad Spaniels did not infringe or dilute Jack Daniel's trademark or trade dress rights. The San Francisco-based 9th U.S. Circuit Court of Appeals in 2020 ruled in favour of VIP, finding that VIP's toy was a creative work with a "humorous message" that was entitled to First Amendment protections. The case is expected to go before the Supreme Court in early 2023 for the final decision.
A registered trademark doesn't give its owner the right to stop all others from using that trademark but only to stop those third-party uses of that trademark in connection to the goods and services under which their trademark is registered. So if a trademark is not similar enough in itself or in the goods and services it applies to, at least not to the point where it would be likely to mislead or confuse a consumer over the source, it will most likely not be considered an infringement. United States Courts have reaffirmed this by ruling on multiple cases that parody or satire of famous brands does not constitute trademark infringement when it is obvious to consumers that the parodied brand was not the manufacturer of the goods. The court is yet to establish whether this case is subject to likelihood-of-confusion analysis or instead entitled to heightened First Amendment protection.