Scottish food and drink producers of everything from biscuits to soft drinks to craft beer are targeting overseas markets. A recent whisky decision is encouraging but all companies, large and small, should be aware of trade mark protection.
by Ross Nicol
UK registered trade marks only protect branding within the UK market. If a business has any plans to export its products for sale in a foreign jurisdiction then it should consider the options available for registering trade marks in foreign territories.
Businesses targeting continental European markets should consider applying for a Community Trade Mark, which grants registered trade mark protection across Europe.
There are also options available for registering trade marks in jurisdictions further afield, such as the United States and China.
Registering a trade mark in foreign jurisdictions strengthens the position of a business seeking to prevent third parties in those foreign territories from using its branding without permission.
If a brand is not registered as a trade mark, it can be an expensive process to prevent a third party from misusing it, as it would be necessary to rely on law of passing-off, which can be a more expensive and less certain option.
The Scotch Whisky case
The Scotch Whisky Association (SWA) has registered trade marks in a number of foreign jurisdictions, including China, to safeguard the reputation of the term ‘Scotch Whisky’. This means that only genuine Scottish-produced whisky products can be labelled as Scotch Whisky.
The SWA became aware of infringement by a Chinese manufacturer and brought a successful infringement action in that country. The SWA obtained a court order preventing a Chinese manufacturer producing bottle caps bearing its trade mark, and from attaching those which it had produced to bottles of non-Scotch whisky. The SWA was also awarded damages.
By registering a trade mark in China, it was relatively straightforward for the SWA to bring an action against the Chinese-based infringer. Other potential infringers in China are likely to be dissuaded from using the mark without permission in fear of being sued for significant damages.
Stopping the infringement early
The SWA case serves to highlight the importance of taking action at an early stage. The SWA brought action against the manufacturer of the bottle caps before they had been attached to the bottles containing non-Scotch whisky. This allowed it to prevent distribution of bottles of non-Scotch whisky bearing the trade mark. It becomes more difficult to contain infringement once infringing products are in circulation, as is often the case.
It is, therefore, important that businesses have measures in place to monitor and enforce their registered trade marks in those foreign territories that are relevant to their business. Failing to take steps to enforce a registered trade mark may lead to protection being lost.
The outcome of the SWA’s action should be encouraging for businesses with plans to expand the use of their brands in foreign jurisdictions.
In addition to demonstrating the increasing strength of China’s trade mark enforcement system, the decision should also serve as an important reminder to businesses about the need to consider registering trade marks in foreign jurisdictions.