Print article

Correctly choosing and protecting trademarks so that they can become valuable business assets is increasingly important in today’s economy, where a trademark may be a principal component of brand value. Trademark protection generally is country specific, and although there are often similarities, there are also important differences. This article provides a brief look at five important distinctions between the trademark laws of the US and UK.

Obtaining trademark rights through use vs registration

A trademark is a name, symbol or other device used to distinguish the source of a product or service. In the UK, trademark rights may be acquired simply through registration, and an applicant is not required to use a mark before obtaining a registration for the mark provided it has a bona fide intention to use the mark. In contrast, as a general rule, trademark rights in the US are acquired only when the mark is actually used.

Unlike in most countries, companies generally cannot acquire trademark rights in the US solely through trademark registration, and marks generally cannot be registered until the applicants prove that the trademarks are being used in commerce in the US. One practical effect of this distinction is that a UK registration can cover a wider range of goods and services, including those not currently offered. In the US, an applicant generally must declare that it is using the mark on each of the goods and services for which it seeks registration, and the entire registration may be subject to cancellation if there is no such use for some of the claimed goods and services.

The availability of demand letters

Once a trademark owner secures rights in a mark, it is important for the owner to protect the goodwill associated with the mark by preventing unauthorised use of confusingly similar marks. In the UK, trademark owners often do not send demand letters to infringers requesting the infringers to voluntarily cease their use of the infringing marks before filing suit because it may result in a “threats action.” Threats actions are designed to encourage trademark enforcement against the source of the infringing products or services while discouraging enforcement against any downstream customers, and may provide an accused infringer with a cause of action if a demand letter harms its business. Although there have been recent court reforms designed to discourage threats actions and to make litigation the last resort, threats actions continue to act as a deterrent to sending a demand letter in the UK.

In the US, if the trademark owner sends a demand letter to either the manufacturer of an infringing product or its customers in good faith, the sending of the demand letter cannot form the basis of a lawsuit by the accused infringer. Consequently, US trademark owners frequently send demand letters to infringers before initiating litigation, and these letters often lead to settlements without litigation.

Administrative litigation relating to registrations

If a party attempts to register an infringing mark, the trademark owner can initiate administrative litigation before the authority responsible for the trademark registry. In the UK, such a proceeding ordinarily involves limited or no exchange of information between the parties, and can be fully litigated in 15 to 18 months at a cost of between £5,000 to £10,000. In contrast, an administrative challenge to a US trademark registration or application to register is more akin to full-fledged litigation. For example, the parties frequently demand voluminous documents from each other and take depositions of their opponents. Consequently, a fully litigated administrative challenge to an application to register in the US frequently takes three years or more and often costs more than £100,000.

Trademark infringement litigation

In order to prevent an infringer from continuing to use a confusingly similar mark, a trademark owner may bring a lawsuit to protect its valuable intellectual property rights. Although there are some minor variations, the requirements for proving trademark violations in the US and UK generally are comparable.

In the UK, the vast majority of trademark cases are filed in the High Court of Justice. In the US, there are many more potential venues for most trademark cases. In some instances, trademark lawsuits can be filed in a state court in any of the 50 states and the District of Columbia or in any of 94 federal district courts.

Because the parties in US trademark litigation have more options, they can make strategic decisions about where to litigate disputes based on a particular court’s procedures, timing and legal standards. Moreover, in many circumstances, either a trademark owner or an accused infringer may be able to initiate litigation and, as a general rule, the priority of competing lawsuits is determined by which case was filed first. Consequently, there is an incentive for both parties to be the first to initiate litigation in an attempt to secure a forum that has more favourable legal standards or procedures, or is more convenient for it.

Loser does not pay

In both the US and UK, the most common form of relief sought in a trademark case is an injunction prohibiting further infringement. Monetary relief is also available. In addition to injunctive relief, courts in the UK may require the losing party in a trademark action to pay the winning party’s attorney’s fees. This determination is in the sole discretion of the court, but generally the winning party receives 60%-70% of what it spent on attorneys and costs. The likely award of attorney’s fees often has a chilling effect on the willingness of potential trademark plaintiffs to file suit and can act as an incentive for defendants to settle. Conversely, in the US, the losing party generally does not pay any of the winning party’s attorney’s fees. As a result, there is less risk for both sides in litigating a dispute to a final resolution, which may explain why there is a perception that US trademark owners are more litigious than UK trademark owners.

Conclusion

UK and US trademark owners face similar challenges in securing and enforcing their rights, but there are significant differences. Understanding these is essential for any UK company considering launching a new mark in the US or evaluating its options in enforcing its trademark rights in the US.

For more information, contact:
J. Kevin Fee of Morgan, Lewis & Bockius
1111 Pennsylvania Avenue, NW
Washington DC 20004, USA
Tel: 001 202 739 5353
E-mail: jkfee@morganlewis.com
Website: www.morganlewis.com

Top

All pages are copyright © of Roxby Media Ltd. American British Business is a Roxby Media publication - Disclaimer