As discussed last week, navigating global trademark infringement policies can be a difficult and daunting task when one wants to expand the global recognition of their trademark without significantly increasing the costs associated with doing so. While one may assume that it would be more cost-efficient to maintain only a handful of trademark registrations in the countries that return the most profits, such a strategy can end up being more expensive if the brand owner is required to defend their trademark rights in a foreign jurisdiction. In today’s age of Internet sales, limiting a company’s intellectual property budget to cover only domestic trademark fees can be shortsighted. With the advent of online sales transactions and advertising, significant business can now be derived from online trademark usage. As such, formal trademark “use” now encompasses more countries and more markets than ever before.

Thus, the question becomes, how does a company know when to pursue a “globally-focused” trademark strategy as opposed to a “regionally-focused” one?

The answer lies in carefully considering how dependent the company is, or plans to be, on Internet and international sales. If the company intends to be a truly domestic entity, with no aspirations to enter the global market, then the company should concentrate on registering and maintaining domestic trademarks only.

If, on the other hand, the company enjoys a significant global presence, relies on foreign vendors and customers, or intends to pursue increased international name recognition, then the company should be willing to invest time and resources to the filing and maintenance of foreign trademark registrations.

If a company still remains unsure about which strategy better suits them, they should consider whether or not they would be willing to forego an opportunity to offer goods and services to customers in foreign markets if that opportunity were to arise.

As discussed in last week’s blog entry, commercial effect in a foreign jurisdiction can vary wildly depending on the interpretation and facts specific to each case. As such, the Joint Recommendation Concerning Provisions on the Marks, and Other Industrial Property Rights in Signs, on the Internet has offered the inclusion of a disclaimer as a partial solution for avoiding liability. Namely, the user of a contested right may, inter alia, seek to avoid liability for trademark infringement or unfair competition claims by including a disclaimer on their website.

Along with other requirements, the disclaimer must include a “clear and unambiguous” statement, in conjunction with use of the sign, that states that the user has no relationship with the owner of the right alleged to be infringed; and does not intend to deliver the goods or services, offered via the Internet, to customers located in the Member State where the trademark is protected. Moreover, in addition to ascertaining whether the inquiring customer is indeed located in that Member State, the user must then follow through with the disclaimer by refusing delivery to that potential customer.

One should note that a disclaimer is one of the few solutions recognized in the Joint Recommendation. Defenses based on domestic priority filing dates are generally unavailable in the Member States that recognize trademarks on a first-to-file basis, as opposed to a first-to-use.

Taken as a whole, companies that participate in significant online advertising or sales transactions should carefully consider all of these factors when choosing between a “globally-focused” or “regionally-focused” trademark strategy, as the cost-analysis associated with each includes more than just the initial trademark filing fees. Instead, companies must also consider their future growth and where or what markets they intend to derive that growth from. As larger companies will indubitably rely on some Internet trademark usage, they must thus always consider the subtle factors and liabilities that accompany such use.

Source: http://www.wipo.int/about-ip/en/development_iplaw/pdf/pub845.pdf

For more information, please visit our trademark service page.

Klemchuk LLP is an Intellectual Property (IP), Technology, Internet, and Business law firm located in Dallas, TX.  The firm offers comprehensive legal services including litigation and enforcement of all forms of IP as well as registration and licensing of patents, trademarks, trade dress, and copyrights.  The firm also provides a wide range of technology, Internet, e-commerce, and business services including business planning, formation, and financing, mergers and acquisitions, business litigation, data privacy, and domain name dispute resolution.  Additional information about the IP law firm and its IP law attorneys may be found at www.klemchuk.com.

Klemchuk LLP hosts Culture Counts, a blog devoted to the discussion of law firm culture and corporate core values with frequent topics about positive work environment, conscious capitalism, entrepreneurial management, positive workplace culture, workplace productivity, and corporate core values.