Fashion retailers today face multiple challenges arising from global trade, the explosion of e-commerce and the imperative to operate sustainably while meeting ever higher client expectations. In this climate, a brand's image and reputation have become key factors of business success. Trademarks, in this shifting climate, provide a highly valuable competitive advantage, making the need to protect them even more important. The prudent business thus is proactive in its trademark protection and enforcement strategy.
One significant threat to trademarks arises from so-called trademark troll practices. These practices, although less known than patent troll practices, occur when a person or a company pre-emptively applies to register a mark used by a brand owner without the intention of using it for trade or production of goods or services, but as a means of pressure against the legitimate brand owner.
Trademark troll practices encompass two main behaviors:
Opportunistic trademark registrant: the applicant does not actually use or intend to use the trademark, but opportunistically files for a trademark (well-known or not) that has been registered by another company in other countries or in other classes. Subsequently, the troll holds the trademark for ransom, demanding a license or purchase fee when the legitimate owner decides to extend its trademark protection. Trademark bullies: a company with a well-established reputation in one or more countries engages in aggressive enforcement of its brands beyond its actual territorial borders and/or business scope, bringing actions against other companies that use the same or similar marks in other countries or in unrelated areas. A trademark bully uses threats of litigation against another company that is clearly and beyond any reasonable doubt operating within the bounds of trademark law. Trademark bullies use trademark law as camouflage; their goal is to drive competitors, or those they construe as competitors, out of business. They typically accomplish this by threatening to sue, being well aware of the fact that many small competitors cannot afford the costs associated with lengthy litigation. The behavior of the trademark bully is not illegal per se; trademark claims are part of any trademark enforcement strategy and are necessary for an entity of any size to preserve its trademark rights. However, if the abuse is blatant, such behavior could be condemned by the courts through the relevant abuse...