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Trade Mark Bullying : Unjustifiable threats of trade mark infringement

April 11, 2012

What should you do if you receive from a major corporation unjustifiable threats of trade mark infringement. Does the law protect you from Trade Mark bullying?

Section 21 of the Trade Marks Act 1994 states that any aggrieved person may bring proceedings for relief where a person threatens litigation for infringement of a registered trade mark, subject to limited exceptions.

Relief can take the following forms:

  • a declaration that the threats are unjustifiable;
  • an injunction against continuance of the threats; and/or
  • damages in respect of loss resulting from the threats.

The claimant will be entitled to relief unless the defendant can demonstrate that the acts against which proceedings were threatened constitute (or if done, would constitute) trade mark infringement.

A recent case on this was the Court of Appeal case of Best Buy Co Inc & Anor v Worldwide Sales Corporation Espana SL [2011] EWCA Civ 618

Best Buy brought groundless threats of action against WorldwideTrade Marks including the words “BEST BUY”. Best Buy operated its stores in the US as BEST BUY. It wanted to enter the European market under the Best Buy name.  In September 2008 they wrote to Best Buy that its use of the trade mark

  • “in Europe, and in particular in Spain, as well as in advertising and in the media, as at present… would entitle [Worldwide] to take the appropriate legal action to defend its interests”.

They were required within 15 days to enter into settlement negotiations or undertake not to use the trademark name in Europe.

When negotiations failed Best Buy in europe brought proceeding under s 21.

Those failed at first instance as the letter was a without prejudice letter even though it hadn’t been headed such.

The Court of Appeal decision

The Court of Appeal found that the trial judge was correct in finding that Worldwide Sales’s letter contained a threat of infringement proceedings under the TMA 1994, but that he was mistaken in stating that the letter could not be relied on as it fell within the “without prejudice rule”.

  • “Interpreting “threat”: The circumstances and correspondence must be considered as a whole when determining whether the letter falls within s 21(1). A reasonable recipient of Worldwide Sales’s letter would take it as indicating that Worldwide Sales was not merely asserting its legal rights, but also intending to enforce them. The exclusions in s 21(1) are to be construed narrowly.”

Even though 21(1) is a domestic provision, a Community trade mark can found the basis of such a claim if the threat concerns proceedings in the UK. The letter was sent to a UK address, and it referred to press coverage indicating that Best Buy Inc intended to launch its European business in the UK. These facts would lead a reasonable recipient to believe that the threat concerns proceedings intended to be brought in the UK.

As to the without prejudice letter it was not the type of settlement proposal on policy grounds he found should be treated as privileged.

If  trademark proceedings are to be contemplated be very careful that your threats do not fall foul of this section and clients who receive such letters look to see whether this section will assist.

Why not read our pages on Intellectual property disputes and Trade Mark bullying. For advice as to Trade Mark disputes call Carruthers Law today or fill in one of our enquiry forms.