Successful Brand Growth, The Other Side Of The Coin
Özlem Futman, 2003 / Marques Meeting

It is not disputed today what trademarks mean to companies. These very valuable items of companies‘ portfolios are the marks of an economic and social importance based on considerable capital labour and prestige. Apart from the business management and strategies required to increase the success of trademarks,legal protection of the trademarks is the most important issue.

I guess everyone present would agree that the first step for a company which has decided to operate in another country is to have initiated the process for registration of its trademarks or in better terms completed such before taking any action. Especially for the sake of overseas operations,companies which want to strenghten the success of their trademarks this is must. Today, registration has became much cheaper and easier thanks to the systems like CTM,Madrid and so on.

Filing or completing trademark applications before starting to operate in another country would establish solid grounds for preventing trademark infringments by any third parties.

Companies operating internationally face several difficulties during the registration process. In this respect ,I would like to give some examples covering such cases.

PREVIOUS REGISTRATIONS AND SPECIFICALLY DIFFULTIES WELL-KNOWN TRADEMARKS FACE WITH

The least desirable difficulty is that a third party acting in bad faith has applied for registration or has registered your mark beforehand. Companies facing such a situation have different alternatives:

1. In the event the application of the third party has not been registered and the application is identified during the publication period ,it is possible to file an opposition backed with necessary evidence .Depending on the result of the opposition ,it might be possible to overcome the problem or following exhaustion of the administrative remedies,it might be necessary to take legal action before the courts.
2. In the event the third party is awarded the registration and has a registration certificate, since all administrative remedies are left behind, its solely up to the company whether to start legal proceedings or to go for settlement out of court. Leaving the option to file a law suit aside,methods for out-of-court settlement are mainly issuing a cease and desist letter to the other party,issuing a formal notification letter (such as via a notary public),or negotiating for purchase of the trademark by means of an attorney.

During the negotiation process for purchase of the trademark ,although the other party’s bargaining power depends largely on the value and repute of the trademark ,how your attorney handles the issue and provides solutions is also important.At this point ,I would like to give the following example based on our experience.

CHAMPION

In the late 1990’s,the former owner of the subject trademark,PROMODES, established a joint venture in the Turkish retail sector with SABANCI GROUP ,a company well-known in the Turkish business environment ,and decided to enter the market with the well- known chain-store CHAMPION. Unfortunately,they came to learn that a real person had previously applied for registration of the trademark. Upon receipt of this information ,PROMODES filed an objection to the application .However ,they could not resolve the problem satisfactorily by filing the opposition .At this point ,PROMODES opted for out –of- court settlement negotiations rather than taking legal action . Accordingly we started negotiating with the applicant .Thoroughout the negotiations ,the most crucial point was not to mention the SABANCI name. We learned that the applicant had become familiar with the chain –store Champion while travelling abroad and applied for registry of the trademark before the real proprietor since he thought that this group might decide to invest in Turkey .During the negotiations the SABANCI name was not mentioned at all. We also understood that the other party did not know the company PROMEDES at all despite its well-known reputation . As we all know ,trademarks have become signs having their own value independent from the companies which own them .Therefore ,it might not be possible for consumers or third parties acting in bad faith to identify which company a trademark belongs to.In this example ,after thorough bargaining negotiations ,the other party agreed to transfer the trademark to our client PROMODES ,which he assumed to be a middle – sized company , for a very small amount .Short after the transfer procedures ,it was announced in all the newspapers in Turkey that SABANCI Group was to start operating CHAMPION stores with its partner.

If your trademark is succsessive and well – known ,you are highly possible to be a focus of interest for third parties in bad faith. Previous applications in bad faith might be in the same /similiar clases or very different classes. Although I hope that your client or the companies you work for as in –house counsel never face such problems. I would like to state that although it is irrelevant in which sector it operates in our country, a company is applied for the trademarks OCEAN (for class 32),TACOBELL (for class 29,30,32),BUD (30,32,33),OCEAN SPRAY(for class 30,32,33),CORONA(for class 29 and 30),BECK’S (for class 30) and BUDWEISER (for class 30,32,33) ,PLANET’S HOLLYWOOD and TROPICANA. Some of these applications were awarded the right for registration ,but revoked afterwards since registration fees were not paid on time. On the other hand, The Turkish Patent Enstitute has rejected some of the applications because of the previous registrations of the real proprietors of these trademarks, it is noteworthy that a majority of the applications succeeded.

Of course ,not every company facing such problems can reach a solution through opposition or or out-of –court settlement. In this case, filing a law suit is necessary under the scope of the legislation of the subject country and the boundries of international agreements, so that the trademark proprietor’s approach the problem provides to be serious.

CULTURAL DIFFERENCES – LINGUISTIC DIFFERENCES-GENERIC NAMES

When taking your trademark out of the company which initially held it, you are faced with the reality of another culture. Thus, you must be ready for any surprises arising from cultural differences. In this regard, one of the important problems where the meaning of a word is inappropriate in the language of another country. İnappropriateness can be caused by the words having a nasty meanin, being open to derision and thus impairing the repute of the trademark, irritating the consumer of the market in terms of the religious-cultural-social aspects.In order to prevent such inappropriateness. I believe it would be wise to seek the opinion of the trademark agents in the counrty. It is a fact that every country has different jargons and linguistic idiosyncrasies. Although it might not be possible to search for every single word or expression, use of words which would certainly cause annoyance could be prevented.

Sometimes, even if they do not have inappropriate meanings,trademarks might consist of words used by in daily life,in other words,not of distinctive character .These might be the words of the national language of that country as well as widely used words of another language. In this case ,one might be faced with the problem of rejection of the registration of the trademark for not having a distinctive character. For example ,the word RATING,according to the Turkish Patent Institute is commonly used in the daily life of our country and as stated in some of its decisions, has lost its distrinctive character in terms of Article 7/1-c of the Trademark Legislation no.556 . In one of the oppositions made ,it was argued that the word “rating” is used in Turkish with reference to the rating of television programmes and their popularity ,whereas the activity of the client was different from the television sector. In the meantime ,oppositions arguing that word refering to the popularity of a television programme is “the ratings” used its plural form and that this trademark is registered in English speaking countries were not accepted.

As far as the overall of the influence of the English language around the world and its daily usage by people in many different ways are concerned,there is always the possibility of refusal of a trademark application based on these considerations. If a word has been registered as a trademark in English –speaking countries , such a registration can be the basis for arguing that the subject word is of a distrinctive nature. Therefore,it should always be kept in mind that the decision lies within the discreation of the expert in change of the file.

The GSM trademark is an interesting example ,since the issue here is focused on how ordinary consumers comprehend the trademark.Actually ,as we all know,products to be put on the market for the first time generally face the risk of becoming a generic name . Thereafter,the consumer perceives the trademark as if it were the product and begins to disregard the trademark reality. A trademark application made for tthe word GSM , although accepted by the Turkish Patent Institute ,was opposed by a third party.It is noteworty that after being accepted by the expert, a trademark is open to disscussion by a third party,in other words ,the public. The third party has claimed that GSM was not a trademark ,but instead a generic word which can be used by all companies operating in the cellular phone sector and that it was of no distinctive feature. The problem was solved only after proving that the trademark belonged to GSM Mou Association and all the operators could use this trademark only after having entered into licence agreements.

Use of a different alphabets should be also noted. Countries such as Russia Japan ,China, and Greece use their alphabets rather than the Latin alphabet. When considering registering a trademark written in the Latin alphabet,for example ,in Russia where the Cyrillic alphabet is used,we suggested that our client file a separate application for the trademark written in the Cyrillic alphabet.

Similarity of a trademark subject to application with the registration /applications of earlier dates is one of the grounds for refusal. Sometimes it would be helpful to open to discussion the roots and pronunciation of the trademarks consisting of words and demonstrade that they are not similar.Insisting that the two trademarks are not similar and the trademark you applied for registration is not similar to the trademark of an earlier date does not necessarily mean that you would achieve positive results.Nobody expects the arguments of the applicant and the agent acting to defend his or her rights to be 100 per cent objective. But what about the totally impartial expert? Speciifcally with respect to cases where the roots, pronunciation and nuances in meaning are subject to comparison. I am of the opinion that an opposition would be much more effective if based upon the report of an imperial expert.

BERKELEY

The story of the file begins with the instruction of JE Evans – Jackson &Co ,UK on behalf of its client Gallaher Ltd. for registration of BERKELEY (word) and BERKELEY + device trademarks in class 34. The applications were filed after examination by the Turkish Patent Institute and were issued on the official Bulletin. Within the three-month opposition period,Brown &Williamson Tobacco Corporation, and American based company ,opposed the application arguing the similarity between the trademark BERKELEY and their trademark BARCLAY . The Turkish Patent Institute was persuaded by the objection and refused our client’s application for registration.Upon the refusal decision,we requested an academician working at the Linguistic Studies Department of a reputable university to examine the two words. That professor submitted a report concluding that upon comparison of the two words in many respects,the two words were not similiar to each other that there was a possibilitiy of confusion. Our opposion used this report and was accepted.The trademarks were registered under the name of our client,Gallaher Ltd.

Additionally,the expert noted our argument stating that most smokers do not prefer brands other then their own.Therefore there was no possibiliy of confusing the trademarks.

Negative situations based on cultural differences might not always arise at the stage of registration, but instead after the products bearing the trademarks are marketed. This can result in the considerable costs. One of our clients, one of the leading companies in the tobacco sector completed all registration requirements and entered the market with a tobacco brand. There was graphic picture of a mosque, which is holly place for a prayer on an object like cigarettes are harmful to one’s health and an ordinary,everyday product was disrespectful to the Islamic religion . Because of a widening negative reaction ,the tobacco company removed the depiction of the mosque from its packaging all around the world,starting in Turkey ,even though it had succesfully registered the depiction. As this example proves,reactions sometimes considered to be purely local can cause chain reactions and force global changes.

REGISTRATION OF THE TRADEMARK BY THE COMMERCIAL AGENT OR REPRESENTATIVE UNDER HIS NAME

Sometimes ,proprietors of trademarks might prefer to join the game through different actors rather than directly taking part in the market. These actors might be the sole distributors, agents etc. Sometimes, there are situations where representives acting in bad faith intend to register the actual trademark or marks confusingly similiar to the trademark without the permission of the trademark proprietors. Thus,agreements granding in the right to use the trademark sould be carefully drafted. Neverless, in case it is discovered that the agent has made an unfair application , an opposition shoul be filed during the notice period or,if the registration is already completed, a law suit shoul be filed.

CLASSIFICATION

It is crucial track the changes and developments of the Nice Classification and to file additional applications within a reasonable period. By doing so, it is possible to overcome any risks which might arise in the future ,since third parties acting in bad faith might take quicker advantage of such gaps than the proprietor of the trademarks already existing in the market. For example, as we all know ,acceptance retail service in class 35 upon WIPO decision is an important step. In countries where you plan to operate or in the country where you are currently operating ,having registrations only in the classes where your field of activity matches might not be sufficent. Today ,many trademarks in Turkey suffer from not taking actions at the right time. For example ,very well-known trademarks in the textile industry ,maybe because of not opening stores under their name ,do not have registrations in Class 35.In this case ,third parties acting in bad fairth are given the opportunity to use the trademark in the retial sector through registration in class 25 but in sub-classes including retail services. Cannot oppositions based on grounds of bad faith be filed due to the interrrelation between the classes ? Or cannot lawsuits be filed in order to determine that such actions constitutes trademark infrigment and unfair competition? When opposed, the issue lies within the discretion of the expert, and it might be necessary to start legal proceedings for annulment of a decision against your company. Considering the length and cost of the trial process, is it not wiser to react in a timeiy manner?

SCOPE OF PROTECTION
Another problem is the difterence as to the practice of official bodies of different countries and contradictions within legislation. İt might be better to explain this issue through a provision of the Turkish legislation. Under Article 5 of the Decree-Law on Trademark Protection No.566;

Decision no: 2003/2475

Registration of trademarks-Articles 7.1-a and 7.1-c of the Decree Law No 556-Distinctive Character.
Plaintiff has applied for the registration of the slogan “GET CONNECTED TO THE FLAVOR OF THE WORLD”.

Defendant Turkish Patent Institute has rejected this application on the grounds that this slogan does not designate the trademark proprietor and is deprived of distinctive character.

The judgement of the local Court, which held that according to the evidence presented, the subject-matter slogan being known and registered as a trademark in a number of countries, is original and of a distinctive character and that Article 7.1-C is irrelevant , and therefore, that the lnstitute’s decision rejecting the application for the registration should be annuled, is lawful.

DO YOU REALLY KNOW YOUR TRADEMARK PORTFOLIO AS WELL AS YOU THINK YOU DO?

Today, despite being helpful for trademark valuation and fast decision-making with regard to the overseas trademark portfolio of multinational companies, one overlooked point is the need to maintain sufflcient co-ordination between the company management and Iawyers in charge of the trademark portfolio. lndeed, this point is not really focused on despite the availability of relevant technology-software. In a company operating in more than one country, all of the trademark portfolio —or at least the basic features-of the company can be recorded on computer. By means of a coordinated study, a listing can be prepared based on the information gathered from the management, sales and marketing departments.It is certain that each trademark has a tale of its own from the very beginning of search and registry. Thus, not every detail might need to be recorded on computer. However, main steps the trademark has been through, information supplied by the local agents, and a sample of the trademark can be filed on the computer so as to enable management to check at first glance the current status of the trademark in any country the company is operating in. This is an absolutely effective time and energy saving measure. We personaliy experience the advantages of a close working relationship with both the management and export-sales departments of our clients.

MASS MOVEMENTS: IMMIGRATIONS, WARS AND TRADEMARKS

Another problem some companles face with is that before they have a chance to analyze the market in order to decide whether to enter it or not, public events that the company cannot control may push the trademark into the market. For example, in many parts of the world where conditions are unstable, mass movements of people are experienced as a result of political events so that trademarks and trademark images are carried along with these people from one place to another. For example, a considerable population from the former Yugoslavia reside in Turkey today. Citizens of the former Federal Republic of Yugoslavia, which is now separated into different countries, carry their habits and trademark consciousness with them to the countries they immigrate to. Although it is not at the present visible and backed with marketing and image based campaigns, some weIl-known trademarks of the former Federal Republic of Yugoslavia are alive within Turkish citizens of Yugoslavian origin. Goods successfully counterfeiting these trademarks are used by ordinary customers without knowing that they are buying counterfeited goods. While such a case demonstrates the success and power of the trademarks, it certainly causes problems for the real trademark proprietor. Fortunately, some of these trademarks have obtained successful results from law suits filed to prevent counterfeiting.

KNOW YOUR COMPETITORS

It is absolute that you are directly interested in your trademarks. But what about the competitors? While entering into a new market, to know on one hand the other actors and to decide on their following steps, is extremely important to have sufficient feedback of their trademark portfolio. Having feedback of the trademark application and registration of the other actors of the market would give you an idea about their further moves and other instruments against your company. Hence, while giving a start to your trademark applications and registrations, it is important to know about your competitors trademark applications and registrations. In this respect, it would help to obtain and periodically update a trademark research report. Accordingly, in addition to the trademark research to be concluded at the beginning, up-to-date information about your competitors trademark applications/registrations could be gathered through periodical bulletin research.

Trademark infringements happening after completion of registrations is another side of the issue. The scope of legal options, types of law suits to be filed, and claims to be made in order to prevent such infringement are wide enough to be the subject of another presentation.

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