According to a recent report by a BBC undercover journalist, a "trade mark troll" has been registering the names of juice bars in Scotland as trade marks and attempting to hold the owners to ransom.

A trade mark is a sign or logo that can be used as a marketing tool to distinguish your goods or services from those of a competitor. A trade mark can be words or pictures or a combination of both. A trade mark helps the holder to build up a strong brand like "Coca Cola" for example. A trade mark troll is someone, often a company, who registers a trade mark or trade name in respect of particular goods or services. This person then obtains a monopoly right to use that name in connection with those goods or services in the relevant territory such as the UK. Trade marks are territorial and protection can also be obtained outwith the UK. The troll then tends to approach the unsuspecting owner of the related goods or services and demand an upfront sum to transfer or license the registered trade mark to that party.

According to the BBC report, "Juiceling" in Glasgow and "Juiced Up" in Edinburgh were among a number of juice bar businesses contacted by a company claiming it owned the trade mark to their name/brand. The trade mark troll threatened court action if they did not pay up. This undoubtedly was a big concern for the companies being targeted and caused a significant amount of anxiety. The owner of Juiceling apparently said "It felt like I had the carpet swiped from under me and that I was effectively being robbed by this company".

However there are things that can be done to prevent trade mark trolls. Assuming the various juice bars had been trading for a period, they would have built up goodwill in their brands and would have unregistered trade mark rights. A trade mark is not valuable unless there are goods or services associated with it so if the registered trade mark owner were not trading the brand would not be valuable to them.

The juice bars may be able to oppose the trade mark applications on the basis of these earlier unregistered rights. They may also be able to oppose the trade mark application on the grounds that the application was made in bad faith. The existing businesses may also be able to raise an action for passing off.

The relevant trade mark legislation provides for the possibility of someone having an earlier unregistered trade mark so even if an application goes through unopposed, you may still be able to continue using your unregistered mark without challenge on the basis of your earlier right in a particular locality.

If you are targeted in such a fashion, the best thing to do is to check the UK trade mark registry to see if the person claiming to own the trade mark actually does. If they do, do not panic and do not hand over any money without speaking first to an IP lawyer or similar advisor. The best advice if you are building up a brand nonetheless remains that you should seek registered protection and the costs of doing so are not prohibitively expensive.

Please contact Paul Carlyle or Joanna Boag-Thomson if you would like further information.

07 May 2008

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