Wood Trade Marks and Design Limited

Minivator Ltd have just had their wrists slapped by the UK Advertising Standards Authority (ASA) because they got their ad text wrong.  They ran a promotion where they promised to donate 50% of the profits to Help the Aged.  Unfortunately, the donation was only meant to be from the sales under the promotion, NOT the whole business.

A competitor challenged whether the advert was misleading and could be substantiated – the ASA found that although the promotion had raised substantial amounts for charity, the advert was misleading.  Another example of how you HAVE to use really tight copy on your adverts.  If you don’t, competitors can make the most of your slips of the pen!

If you want to read the full decision then go here http://bit.ly/bsIaXq

As reported on http://patentlawip.blogspot.com/2010/07/black-sabbath-trademark-dispute-ozzy-vs.html, two of the former members of Black Sabbath have settled their differences over the trade mark BLACK SABBATH.

Always nice when two parties settle on appropriate terms – on this occasion, the former members are to share the mark.  It once again throws in the question of disorganised groups of people.  Fate often throws people together on projects.  Bands are getting better at having formal agreements about the name of the band and the income, although those that read my blog will know about the trouble the Sugababes seem to have got themselves into.

If you have a loose arrangement with a group of people that you are creating things with, or are doing business with, then think hard about putting something down on paper so that everyone knows where they stand if you are successful or if it all falls apart.

If a newspaper circulates a covermount (those LOVELY CD’s they put with the Sunday papers) without clearance, how do you work out the damages if you are the owner of the infringed rights?

This was the question in the latest decision regarding The Sunday Times and Experience Hendrix.  Experience own the rights to some of Hendrix’s recordins, including some particularly valuable recordings made at the Royal Albert Hall of Hendrix.  Experience said that they were getting ready to launch this wonderful new content on the market, and were going to have theatrical release, CD’s, DVDs and downloads.  The Sunday Times distributed what Experience arguedwere bad quality bootlegs of the tracks.  Experience alleged that this covermount killed off the market in the UK for their official content for a while and pushed the launch back until the market was ready again.  As they had planned a global launch, the global launch was delayed, and they claimed for damages for the global losses.

The Sunday Times said that the correct damages should be by way of a notional licence, and said that they usually paid between £50k and £100k for the rights to produce the covermounts.  Experience said that the damages should be for the loss of profit – to put them in the position they would have been had the Sunday Times not produced the covermount.

The court sided with Experience – including agreeing that the damages should be global as the delay in the UK meant it was reasonable to wait elsewhere and have a single launch (as they were advised to do).  There the fun started – there seemed to be no agreement as to how successful the film would be, and as such no agreement as to the likely profits.  They sought to argue that the film could be compared to “This Is It”, the film of the preparations to Michael Jackson’s last concert, but this was rejected.  The projections for the success of the theatrical release were too vague, and all the other income was dependent upon the success of the theatrical release.  The judge clung onto the minimums which Experience could show they had been offered (US$5.8M), and gave a calculation for working out the “time cost” of not having that money – discounted income.

For The Sunday Times, it shows the importance of clearing the rights (although it seems their legal counsel had dealt in good faith with a party they believed had the rights).  For claimants, it shows the importance of good, solid facts regarding damage – if they had demonstrated a particular contract they alleged they had then it would have been approximately 5 times the sum in damages.

A few months ago I mentioned the Vodkat case.  Diageo (owner of KETEL vodka) had brought a case for passing off against the owners of VODKAT, alleging that there was goodwill in “vodka”, that it had specific traits and that the use of the term where the product did not share those qualities would be misleading.  They were successful.

The owners of VODKAT appealed, arguing that where you wish to allege passing-off rights in a generic term, it must be niche or luxury compared to the market (such as was the case in the CHAMPAGNE cases a good number of years ago).  The UK Court of Appeal disagreed with these arguments and rejected the appeal unanimously.  In doing so, however, one judge (Rix LJ) expressed regrets that this was the case in the face of a product which was clearly not vodka, which only idiots would think was vodka, when there were labelling laws to protect mislabelling.

I can see Rix LJ’s point.  I suspect that Diageo have “pulled a fast one” and that whilst the alcohol industry may approve of the outcome, the judgment actually sets a precedent which they will use to beat their competitors.  If they do, then well done to them for a clever move - cheers!

Trade marks are a difficult beast – some try to use them to stop their competitors commenting on their behaviour.  We see this in many forms:

1. Trade mark owners trying to seize back domain names which have the trade mark in the name when they are being used for criticism sites;

2. Trade mark owners trying to suggest that competitors cannot use their trade marks when they criticise them; and

3. Trade Mark owners trying to use trade marks to stop people using the marks in Adwords.

All three situations are difficult, as there is inherently nothing wrong in commenting and using trade marks where the use is to identify the competitor.  The test is whether the use is in accordance with honest business practices, however, and if you go to far then you stray outside the realms of acceptable practice.  Whether it is acceptable practice or not may be difficult to assess – some will be put off by receiving threatening letters even when they have a “gut” feeling that they should be able to keep using the mark.

Further problems arise where someone has a logo – are you going too far if you use the logo?  If you could quite easily identify them just by the word part (think ESSO) then it may well be that using the logo may go too far.

In the case of AdWords, there may be a difficult “squeeze” involved.  If you want to say that JOHN SMITH vodka is made by underpaid child labour, you may want to use the trade mark JOHN SMITH as an AdWord and also say in the text “Read here how JOHN SMITH is made by child labour”.  The problem comes that Google will routinely reject the advert (and take it down if complained about) on the basis that the trade mark is in the advert text.  This is in their terms of service, so it’s a matter of Google’s terms with advertisers rather than a legal requirement.  If you don’t make the advert clear, however, then the trade mark owner may suggest that you are conducting a “bait and switch” site, attracting people by suggesting that the site is real/official/authorised.  If they successfully argue that then you may find yourself on the wrong side of a trade mark case.

The centre ground would appear to be to use wording which makes it clear that it is not official – something like “Read the truth about child labour that they don’t want you to read!”.  It seems unlikely that anyone would be confused, and you have made it clear what they will find.  Nevertheless, you should probably expect to have to explain your actions at some point.

By the way, in case anyone is in ANY doubt, nothing on this blog constitutes legal advice – don’t simply rip off my comments and think I’ve given you “proper” watertight legal advice!