When costs count

23rd Feb 2022

Emily Roberts explains what it takes to make sure your IP enforcement strategy remains legally robust and commercially viable.

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Globalisation and recent worldwide events have been the catalyst for significant changes in the IP infringement landscape, often making enforcement more complex, time-consuming and expensive.

But how far should right holders go to protect their IP before the costs of enforcement outweigh the benefits of taking action?

Defining clear objectives

As with all business decisions, defining clear objectives for any IP enforcement strategy is crucial. What are the business’ primary concerns? Are they reputational, economic, or both?

A “win” for one business is not necessarily a “win” for another. Commercial goals differ from one brand owner to the next depending on a number of factors including the size of the business, its unique selling point and brand values.

A critical first step in the cost-benefit analysis of enforcement action is determining when to take action. Even with a bottomless budget, it will rarely be possible to tackle every issue that arises.

Relevant to this analysis are a range of legal and commercial considerations, including:

Who is using the mark?

Is it a competitor operating in the same commercial space? Does that competitor have deep pockets and is it likely to be entrenched? If it is a small business or an individual, depending on the size of your brand, are there likely to be PR consequences arising from any enforcement action you do decide to take?

Knowing your opponent and adapting your strategy accordingly is crucial to defining a strategy that is both appropriate and proportionate.

What IP is being used?

Is it a business “crown jewel” or a less significant company asset? How close is it to your own IP? Are there any known issues with enforcing that particular right, such as previous adverse decisions or proof of use requirements that might be difficult to satisfy?

Taking a holistic approach to enforcement and weighing up the pros and cons of pursuing a particular matter can avoid an escalation of time and expense further down the line.

In what way is the IP being used?

Is the use deliberate – for example, a parody? Does it relate to counterfeit goods? Is the use particularly damaging from a reputational perspective? Is there actual confusion? Are there safety concerns?

Adapting your strategy to be commensurate with the likely impact of infringement ensures you are focusing your energy and resources on business-critical issues. 

Where is the IP being used?

Is it a key territory or a strategically significant one for the business? Is the issue purely online? If so, what can be done?

Where there is infringement in multiple jurisdictions, the infringer’s location, along with other considerations such as court timescales and cost recoverability in a particular location, can have a significant impact on the overall cost of enforcement.

It is also important to think about whether the alleged infringer has rights elsewhere that might be a barrier to your own use.  

 

Having considered these factors and defined some clear objectives, keep them under review. As technology progresses, so do infringers.

The pandemic has seen an unprecedented move to e-commerce and internet-based infringement, for example. A successful enforcement strategy should have the flexibility to adapt and respond to new types of threat.

Care for core assets

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Think carefully also about what it is that you are protecting. Are you expending unnecessary time and cost in maintaining rights that the business could afford to let lapse (for example, if never used or only used for a promotion)?

Be selective in your clearance criteria and focus on those issues and territories that are likely to present the highest risk to the business.

Globalisation brings global issues, so it also pays to think outside the box in terms of the regions where you might seek to protect your IP. For example, think about where you are manufacturing the goods and what protection can be sought there.

Countries such as China remain an issue for those producing their goods overseas. Also, consider whether protection should be sought in territories neighbouring any major jurisdictions where the brand may want to launch. Forward planning can prevent costly issues later on.

Actively monitor

There is no doubt that litigation can be a drain on resources, but failing to police your IP can be costly and undermines the investment made in creating and maintaining those rights.

Putting strategies in place to monitor potential infringements can really pay off.

Opposing a trade mark at the UK IPO level (for example, when a mark is in its application stages and not yet in use) or challenging a new domain name or company name is far more effective than resorting to costly litigation months later when your opponent is established and entrenched.

Technological tools

Of course, the rise of e-commerce and social media provides businesses with a unique ability to connect with their supply chains, as well as their customers, at the touch of a button. Use this to your advantage.

For example, using social media channels to teach consumers to spot fake versions of a product can streamline enforcement and positively influence brand value. Want to keep your authentication processes closer to your chest?

Producing manuals to share with your supply chains (and border enforcement) to educate and assist them in helping you fight infringement can also be an effective tool in fighting counterfeits.

Taking advantage of technological advances in the field of monitoring and enforcement (for example, using AI-enhanced solutions incorporating algorithms to detect counterfeits, infringements and other IP threats) can also be a cost-effective alternative to traditional methods of enforcement.

These can be particularly useful in monitoring online infringements, where an oft-cited frustration among in-house IP practitioners and brand owners is the “whack-a-mole problem” (when it seems like you have stopped one form of infringement or infringer, only to find another has emerged). 

The use of AI and integrated technology such as blockchain to assist with the tracking and authentication of physical goods is also on the rise.

For example, Nike’s widely publicised patenting of cryptographically secured digital assets for articles of footwear (so-called “CryptoKicks”) and Alibaba’s multiple filings for blockchain-related patents show that there is huge potential for technology to assist with supply chain and transaction management.

Assess appropriateness

Once you have considered the factors above, the legal merits and your commercial drivers, it is worth pausing to think about whether taking action is appropriate. If it is, what kind of action?

There are a number of viable, cost-effective alternatives to the traditional cease and desist letter and court proceedings model which rights holders can consider.

For example, picking up the phone or filing a simple notice of threatened opposition may bring your opponent to the table at the fraction of the cost of a formal opposition or threatened legal claim.

Similarly, in appropriate circumstances, the Company Names Tribunal, domain name complaints (whether Nominet’s DRS or a UDRP complaint) and use of third-party online complaints procedures (such as Amazon’s or Facebook’s online reporting tools) can all be cost-effective alternatives to traditional litigation. 

If litigation seems an inevitability, it still pays to be selective in terms of form and forum. There are several options to choose from according to the complexity of the dispute, each with different procedures and associated costs (as well as specific rules relating to recoverability).

The High Court is no longer the default, and the IPEC or Shorter Trials Scheme can help to keep costs down in appropriate cases.

Deciding on what action to pursue and how (for example, whether to pursue interim relief, adopt a split trial model or take summary action) will also have an impact on the overall time and expense. 

Finally, working collaboratively within the business and with the right external team is invaluable in ensuring that matters are dealt with efficiently and effectively. 

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