How prevalent is trademark infringement? According to a recent Compumark Clarivate Analytics report, global brands fall victim to it at an alarming rate.
The report, The Trademark Ecosystem: Insights from Intellectual Property Professionals around the World, is a compelling read. It is the result of a survey of more than 300 trademark professionals in the United States, UK, Germany, and France. While there are many interesting findings on how companies manage and protect their brand portfolios, several are worth emphasizing here:
Trademark infringement is increasing. Nearly three-quarters of respondents experienced trademark infringement in the past year. One contributing factor may be the availability of inexpensive marketing tools. Digital marketing plays an important role in helping companies market their products and services to the general public. E-commerce, social media, and pay-per-click just some of the tactics that are available to the brand owners. Unfortunately, the endless possibilities to harness the goodwill of a brand also makes it possible for infringers to utilize these same digital technologies to their advantage.
Trademark infringement results in real damage. The respondents listed the impact of trademark infringement on their brands, including consumer confusion, loss of revenue, and reduced customer loyalty. This is not entirely surprising. The rise of private label brands is one reason for this phenomenon. Some private label brands seek to mimic the trade dress of many well-known consumer product brands. This is found particularly in the food and over the counter pharmaceutical categories.
Trademark clearance is often neglected. Even well-meaning companies with sophisticated brands are not immune to claims of trademark infringement. In fact, the report revealed a surprisingly high number of instances where the respondents had to change the name of their own brands. This once again reiterates the importance of conducting a full trademark search. It is advisable to obtain a trademark clearance opinion letter prior to introducing a new brand into commerce.
Brand enforcement efforts differ by country. Legal action against infringers took place more in European countries than in the United States. This reality may be in part due to the fact that U.S. trademark litigation can be very expensive. As a result, trademark owners are forced, at times, to limit their enforcement efforts. Therefore, it is advisable that companies protect and enforce their brands based on priority of importance. Be sure to rate specific marketplace activities that could impact the value of your brand from greatest to least.
U.S. trademark filings are on the rise. In the United States, trademark applications increased 9.4 percent during the first three quarters of 2017 compared to the same period in 2016. This trend is continuing as the U.S. economy posts stronger gains and the importance of trademark filing becomes evident. Small businesses, who still make up the majority of trademark filers, remain a potent contributor to these statistics.
Practice Note for Brand Owners: The importance of a comprehensive trademark protection and enforcement strategy cannot be overlooked. While many companies are quick to apply for a trademark, not all conduct a full trademark search to fully assess the risk of adopting a chosen brand name. While time and budgetary constraints continue to present a challenge to companies, it is still possible to mitigate the risk of trademark infringement and maximize trademark enforcement efforts. This begins with a proactive brand management and enforcement plan.