Taking counsel

  • 2005-08-17
  • By Ieva Judinska [ LOZE, GRUNTE & CERS ]
At a time when competition is growing in the marketplace, a brand or a trademark plays an ever-increasing role in a successful business. However, it often becomes the subject of disputes and unfair competition.

Sometimes businessmen go abroad and meet partners or competitors who act in bad faith and manage to be the first to register a trademark as their own. This is followed by tedious legal fights that try to prove who the real owner of this trademark is.

At present such a dispute is taking place in Latvia 's between the Estonian clothing manufacturer a/s Baltika and its former partner, who managed to register the trademark Evermen, which belongs to the Estonian company, in its name.

In order to avoid and prevent such cases 's when somebody trips up your business in such a fashion 's one should be cautious and forward-looking when researching a new market. The first step before entering a market and starting negotiations with a potential distributor or partner is to reinforce one's rights to the trademark by registering this trademark in the respective country. By planning the business development in this way the risk will be minimized.

Sometimes trademarks are registered with the intention of gaining advantages against the competition by using the other company's reputation or making capital at the expense of another company by selling its own trademark to it.

For example, a company that is successful in Lithuania and Estonia will sooner or later want to enter the Latvian market. Its competitor, however, may register this trademark in Latvia as its own in order to block entrance to the market. Even if the company does not use this trademark, the right to "retain" it without utilization is valid for five years after the registration. The entrepreneur who created this trademark and invested money in it, by contrast, is not able to use it in Latvia.

Of course, if a trademark widely known in Latvia 's for example, if Adidas were registered in this way 's it would be easy to identify the dishonest intentions of the applicant. If the trademark is well-known in Latvia, it is not difficult to prove who its real owner is. However, if the trademark is not well-known at the moment of registration and is used only locally, it is difficult or even impossible to prove the apparently dishonest intent when the application is filed.

So the first professional recommendation to any company that has far-reaching plans regarding business development in the European Union 's before investing money in production, marketing and logistics, carefully examine the market where you plan to start operation and register the rights to your trademarks in this market.

Trademark registration may take a relatively long time, and in each country there may be different details that prohibit the use of your trademark 's for example, a trademark that is identical or very similar to yours and that already exists in a country. Also, an improper meaning of the words in the language may be a sufficient reason to refuse the trademark registration.

If a company intends to extend its operation in more than three European Union member states, it is recommended to use the advantages provided by the community trademark registration, since a community trademark is effective in all the EU member states and does not require filing separate registration applications in each country individually. Such trademark registration is performed by the Office for Harmonization in the Internal Market (Trademarks and Designs), which is situated in Alicante, Spain. Registration of a one literal (word) community trademark in one class (for example, registration of the trademark Laima) costs about 2,000 euros. The fee is larger if the trademark is registered for several classes of goods and if it is not just a word mark but also includes graphics, picture, etc.