David vs Goliath trade mark battles: Where does your start-up stand?

Following Nokia’s legal threat to London tech start-up Lowdownapp, fledgling firms need to be aware of the risks – and their rights, says Andrew Bayley

The story so far…

Lowdownapp Ltd is the company behind a digital personal assistant for your smartphone. The Lowdown app includes a HERE button that enables users to alert contacts to their arrival at a location; there is also a standalone check-in app, called HERE. Lowdownapp is made by a small development team in the UK.

Nokia is one of the biggest and best-known global consumer electronics brands. Nokia HERE is the third-biggest mapping service in the world, behind Google Maps and Apple Maps. Nokia employs more than 60,000 people; its operating income in 2014 was more than €1.6bn.

In January, Nokia served Lowdownapp with a threat of legal action if it did not remove its HERE app from global app stores and rebrand the HERE functionality in its flagship product.

Nokia claimed that Lowdownapp’s branding was “likely to deceive”, that it amounted to misrepresentation and passing off, and that it made a mockery both of the £8m Nokia had invested in establishing its own HERE brand and of the relevant trade marks it had registered.

Lowdownapp CEO David Senior branded Nokia’s behaviour “ludicrous” and “heavy-handed”, calling out the company as a textbook corporate bully.

On the surface, it is a classic case of David versus Goliath. But is this a fight that David can realistically win?

Did it really have to come to this?

Cases such as this are becoming more frequent, especially as larger companies are increasingly developing brands around everyday words. These companies invest substantial sums in the marketing of these brands, creating the essential distinctiveness necessary to change a word into a recognisable brand capable of being registered as a trade mark.

And, of course, when a company has invested in a brand, they will inevitably seek to protect any intellectual property that subsists in that brand.

Many cases are, however, ignored, dropped, or settled amicably. Just last week, TUI AG – the German company that owns Thomson Holidays – dropped its trademark case against Mia Tui, a Milton Keynes-based handbag designer, on the basis that it was obvious that the two companies operate in very different markets. Co-existence agreements are often agreed between the parties and clear parameters outlined with regard to styles and use of the respective brands in order to minimise, and hopefully remove, the chance for confusion.

Mia Tui owner Charlotte Jemme highlighted a major issue facing small businesses in conflict with big brands: “We really rely on our brand. Being a small business, we could not have afforded to rebrand.” The cost – both financially and in terms of recognition and awareness – of being forced to change your branding has the potential to kill a start-up before it even gets off the ground.

So, what about Lowdownapp?

Nokia’s trade mark, HERE, pertains to products including computer software and apps. The situation is, therefore, much less clear-cut than it was for Mia Tui: on the face of it, with Lowdownapp applying an identical name to an app product, this could amount to an infringement of Nokia’s trade mark.

The common nature of the word HERE makes the case difficult: it is easy to unintentionally breach rights on a term like this, though this is not in itself sufficient defence against a claim of passing off. In Lowdownapp’s favour, however, is the fact that HERE is the simplest, most literal representation of what the app and button does.

Using common prefixes – such as “i-“, or “easy” – that have become synonymous with huge global brands can also be fraught with risk, even when they are used in different contexts. A recent visitor to the BBC’s Dragons’ Den discovered this – though, in the end, not to his cost – as investor after investor withdrew over concerns that Apple would crush his iGlove brand the instant it became big enough to worry about, despite him having a trademark for use on fashion products. Only Duncan Bannatyne was willing to take the risk of investing in an otherwise very promising small business.

Ultimately, while Nokia may in fact have been well within its rights to pursue Lowdownapp for a change to its branding, there remain questions as to the proportionality of its actions and the interpretation of the letter versus the spirit of the law. David Senior conceded as much: “All they needed to do was call us up, tell us about Nokia HERE, then ask us to please change the name.”

It is also a matter of perception for the “big boys”: do they want the negative publicity associated with “bullying” an innocent (or, at least, naïve) underdog, and to risk being seen to be stifling innovation?

I run a start-up. How can I protect myself?

  • Do your due diligence – Undertake a careful and detailed investigation, including searches via the Intellectual Property Office) before deciding on and committing to investing in any brand name, and take steps to protect the use of that brand name in the relevant context if possible
  • Avoid any doubt – If you have any doubts at all about the status of a brand name, consult a trademark attorney or solicitor for advice: even just the potential of a case such as Lowdownapp’s can be enough to have a significant impact on the growth of your startup, if it puts off wary potential investors
  • Stand up for yourself – Be prepared to stand your ground if you think you have a valid case: Mia Tui and others have shown that you don’t need to cave to an over-protective bigger brand

Andrew Bayley is senior solicitor in the commercial litigation team at law firm DWF.

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