Devil’s Kiss: Burying brands under the garb of Bargain
The problem isn’t the abuse of power, it’s the power to abuse- Mike Cloud
Introduction: Placing the Bet over Brand.
In the cutthroat competition prevailing in the business world, the concept of David versus Goliath isn’t confined to ancient tales; it often plays out in modern boardrooms and courtrooms. The acquisition of a smaller firm by the comparatively larger one is not uncommon, however, most recently we have also come across one of the most insidious practices within this realm. That is acquiring or appropriating smaller firms’ trademarks by corporate behemoths. This manoeuvre not only stifles competition but also undermines the very essence of entrepreneurship and innovation.
Consider this scenario: a budding startup creates a unique product or service, building its brand and reputation from scratch. Then, seemingly out of nowhere, a larger corporation swoops in, and either places an offer to the smaller firm, for buying the brand outright or engages in legal battles to wrest control of its trademark.[1] This predatory tactic has far-reaching implications, not only for the affected companies but also for consumers and the market at large.
What is Trademark Law?[2]: Exercising Exclusivity
Trademark law, universally recognized, safeguards distinctive signs such as symbols, words, or logos that distinguish the origin of goods or services in commerce. The registration process typically involves application submission, examination for compliance with legal standards and provisions, publication for opposition, and eventual registration. Upon registration, trademark owners gain exclusive rights to use the mark in connection with specified goods or services, enabling them to prevent others from using similar marks that could confuse consumers. Grounds for refusal of registration include lack of distinctiveness, descriptiveness, or similarity to existing trademarks. Enforcement mechanisms encompass civil litigation for infringement, seeking remedies like injunctions and damages, alongside criminal penalties for counterfeiting. International treaties like the Paris Convention and TRIPS facilitate harmonisation and reciprocal protection among signatory countries, ensuring the integrity of trademarks and promoting fair competition in global markets.
The Motives Behind the Machinations[3]
So while the so- called big brands have a brand portfolio of their own, the question arises, “why do large firms engage in the dubious practice of acquiring other’s trademarks?”
One primary motivation is to eliminate competition and consolidate market control. By acquiring smaller firms’ trademarks, larger companies can suppress potential rivals and expand their market share without the inconvenience of genuine innovation or competition.
Moreover, dragging small firms into protracted legal battles over trademark disputes serves as a strategic deterrent against challengers. The mere threat of litigation can intimidate smaller businesses into capitulation, sparing larger companies the expense and effort of genuine competition.
Illustrations: All for One?
1. Instagram vs. Littergram[4]: In 2016, a UK-based startup called Littergram, which aimed to encourage users to share photos of littered areas to promote environmental awareness, faced legal action from Instagram. Instagram claimed that Littergram’s name infringed upon its trademark. Despite Littergram’s argument that it operated in a different sector and had a distinct brand identity, it ultimately changed its name to “TrashTag” to avoid further legal battles.
2. Monster Energy vs. Thunder Beast[5]: In 2017, a small brewery in Vermont named Rock Art Brewery faced a trademark dispute with Monster Energy over its beer named “Vermonster.” Monster Energy claimed that the name was too similar to its brand and could cause confusion among consumers. Despite Rock Art Brewery’s argument that “Vermonster” had been in use for years and was associated with its beer, it ultimately settled the dispute by agreeing to limit the distribution of its beer outside of Vermont.
3. Red Bull vs. Bullseye BBQ Sauce: Bullseye BBQ Sauce, a small Australian company, faced a legal battle with Red Bull over its logo, which featured a charging bull. Red Bull argued that the logo infringed upon its trademark, which also featured a charging bull. Despite Bullseye BBQ Sauce’s argument that it operated in a different industry and had been using its logo for years without issue, it ultimately changed its logo to avoid further legal action from Red Bull.
4. Disney vs. Deadmau5[6]: In 2014, electronic music artist Deadmau5 (Joel Zimmerman) faced a trademark dispute with entertainment giant Disney over his iconic mouse-shaped headgear. Disney, which owns the trademark for Mickey Mouse, opposed Deadmau5’s trademark application for his logo, arguing that it resembled Mickey Mouse and could cause confusion among consumers. Despite Deadmau5’s argument that his logo was a distinct part of his brand identity and had been in use for years, he ultimately withdrew his trademark application to avoid a prolonged legal battle with Disney.
5. Tesla vs. Tesla Motors Club: In 2020, Tesla, the electric car manufacturer, sent a cease-and-desist letter to Tesla Motors Club, an online community for Tesla enthusiasts, demanding that they stop using the name “Tesla” and hand over their domain name. Despite Tesla Motors Club’s argument that they were not engaged in commercial activities and were simply providing a platform for Tesla owners to connect and share information, they ultimately acquiesced to Tesla’s demands to avoid costly legal proceedings.
6. Deckers Outdoor Corporation vs. Australian Ugg Manufacturers[7]: The trademark dispute surrounding the term “ugg” has been a long-standing battle between Deckers Outdoor Corporation, the parent company of UGG Australia, and Australian Ugg boot manufacturers. Despite “ugg” being a generic term in Australia to describe sheepskin boots, Deckers successfully trademarked the term in the United States and other countries. This led to legal battles with Australian manufacturers who had been producing Ugg boots for decades before Deckers’ trademark registration. Many Australian manufacturers faced cease-and-desist letters and lawsuits from Deckers, challenging their right to use the term “ugg.” Despite arguments that “ugg” was a generic term in Australia and had been used for decades by local manufacturers, Deckers prevailed in the courts, solidifying its control over the UGG trademark and impacting the traditional Australian ugg boot industry. This case highlights the power dynamics in trademark disputes and the challenges faced by small businesses against well-funded corporations in protecting their brand identities.
7. Budweiser vs. Budweiser Budvar[8]: An ongoing trademark dispute between Anheuser-Busch InBev (AB InBev) and Czech brewery Budweiser Budvar has spanned over a century. Both companies claim rights to the “Budweiser” name, with AB InBev arguing that it has exclusive rights to the name in most countries, while Budweiser Budvar asserts its historical claim to the name based on its origins in the Czech city of České Budějovice (German: Budweis). The legal battle has involved multiple lawsuits and international arbitration proceedings, highlighting the complexities of trademark disputes in the global marketplace.
These examples further illustrate how larger companies often wield their trademark rights aggressively to protect their brands and assert dominance over smaller entities, sometimes at the expense of legitimate businesses with their own established identities and goodwill.
Seeking Protection: The Strategy of “Protect to Promote”
Most often, it’s the popularity of the innovation/business models and not the mere existence of the smaller firms that pose a potential threat to the larger firms- as they are already into the practice of outrageously protecting, promoting their brands and preventing others from subsisting even if there is a minutest similarity between them and the others.
Despite the formidable challenges presented by predatory practices, small firms can deploy a range of strategies to safeguard themselves. One pivotal step involves securing robust legal protection through trademark registration early in the company’s trajectory. This ensures official recognition and legal safeguards for their brand assets, making it harder for larger entities to appropriate or exploit their trademarks.
Additionally, building a resilient online presence and cultivating a devoted customer base can prove invaluable in defending against trademark disputes[9]. A strong digital footprint not only enhances brand visibility and recognition but also establishes a loyal following that can rally behind the small firm in times of contention. Engaging with customers through social media, personalised interactions, and community events fosters a sense of loyalty and solidarity, which can sway public opinion and legal outcomes in favour of the smaller entity.
Furthermore, forging strategic partnerships and alliances within the industry empowers small firms to amplify their voices and collectively advocate for fair competition and regulatory protections[10]. By collaborating with like-minded businesses and industry associations, smaller players can pool resources, share knowledge, and exert collective pressure on larger competitors and regulatory bodies to uphold ethical standards and prevent exploitation.
Moreover, investing in proactive trademark monitoring and enforcement mechanisms can help small firms detect and address potential infringements early on, minimising the risk of losing control over their brand identity. Regularly monitoring trademark databases, online marketplaces, and industry publications allows small businesses to identify unauthorised use of their trademarks and take timely legal action to protect their rights.[11]
Additionally, seeking legal counsel from experienced intellectual property attorneys can provide small firms with expert guidance and representation in navigating trademark disputes and enforcing their rights.[12] Legal professionals can offer valuable insights into trademark law, assist in drafting robust licensing agreements, and represent small firms in negotiations and litigation, bolstering their defences against larger adversaries.
Finally, maintaining meticulous records of branding activities, including logo designs, marketing materials, and product packaging, can serve as crucial evidence in trademark disputes.[13] Comprehensive documentation strengthens the small firm’s case in proving ownership and distinctiveness of their trademarks, making it harder for larger entities to challenge their rights.
In essence, a multifaceted approach encompassing proactive trademark registration, strategic branding, community engagement, legal advocacy, and diligent monitoring is key to protecting small firms against the predatory tactics of larger competitors. By fortifying their defences and leveraging collective strength, small businesses can assert their rights, preserve their brand integrity, and thrive in the face of adversity.
Conclusion: Prevention is better than Cure
The Devil’s Kiss, characterised by the appropriation of smaller firms’ trademarks by larger corporations, poses a significant threat to the integrity of entrepreneurship and innovation. However, small firms are not defenceless against such predatory practices. By proactively registering trademarks, cultivating strong customer relationships, forming strategic alliances, and investing in legal counsel and enforcement mechanisms, small businesses can fortify their defences and assert their rights in the marketplace. Through collective action and resilience, small firms can navigate trademark disputes, preserve their brand identities, and emerge victorious in the face of corporate hegemony. Ultimately, the battle against the Devil’s Kiss is a testament to the resilience and ingenuity of small businesses in preserving the spirit of entrepreneurship and fair competition.
[1] https://www.lexology.com/library/detail.aspx?g=72ae12b4-4b83-4ec4-a0d2-96d9aa534be5
[2] https://www.wto.org/english/thewto_e/acc_e/hrv_e/wtacchrv57_leg_11.pdf
[3]https://www.collaw.edu.au/news/2016/11/14/trademark-law-who-wins-when-it-comes-to-big–business-vs-small
[4] https://www.bbc.com/news/uk-england-36159560
[5] https://www.drinkthunderbeast.com/EpicBattle.html
[6] https://www.bbc.com/news/newsbeat-33235330
[7]https://natlawreview.com/article/federal-circuit-boots-potential-circuit-split-trademark-case-turns-ugg-ly-australian
[8] https://www.tasteatlas.com/the-budweiser-war-one-name-two-completely-different-beers
[9] https://www.wipo.int/wipo_magazine/en/2020/04/article_0008.html
[10] https://amazonsellerslawyer.com/blog/trademark-bullying-by-big-corporations/
[11] http://op.niscpr.res.in/index.php/JIPR/article/download/57066/465482555
[12] Ibid.
[13] https://www.theippress.com/2021/10/02/reverse-trademark-bullying/
