The English courts were recently asked to restrict fashion retailer ASOS’ use of its brand name, in particular in the context of its online trading operations as ASOS.com. The claim had been brought by ASSOS, a Swiss based manufacturer of cycling clothes. In 2005 ASSOS had registered a Community Trademark in respect of clothing, headgear and footwear and it objected to ASOS selling clothes under an almost identical name.
The general rule of brand protection is that the proprietor of a trademark can stop competitors from using the same or a similar name if it is likely that the public will wrongly associate the competitors’ products with the protected brand. Once a trademark is registered it will block any subsequent application by others in respect of similar products and services provided that the trademark proprietor actively trades under the relevant name. A trademark can be revoked if it has been registered to simply prevent others from carrying on business under this name.
ASOS relied on the “own name defence”. The trademark laws acknowledge that a person should be allowed to trade under its actual name. Mr Burger King and Mrs McDonald will therefore be able to sell burgers under their personal names without infringing the rights of the big corporate franchises (provided they do not otherwise suggest any association). This principle can also be extended to a corporate name. Of course, in a corporate scenario where the name is freely chosen by those operating the business, the issue becomes much more complex. Firstly, the trading name must be derived from a genuine corporate name such as the name in which a company is registered at Companies House. Now largely forgotten, ASOS plc had started life as “AsSeenOnScreen Holdings plc” before the acronym of ASOS was adopted as the official company register name. Secondly, the “own name defence” will not be available if any degree of bad faith is involved. The court will have to be persuaded that the offending name was chosen innocently and not with an intention to benefit from a competitor’s reputation.
The courts will always have to balance between the need to give effect to the brand protection offered under the trademark laws and, on the other hand, the legitimate business interests of an innocent party. The “own name defence” is an exception to the rule and the courts will not tolerate any clever manipulation and abuse. How finely balanced these interests are is demonstrated by the fact that the first instance judge found in favour of ASSOS as the trademark proprietor but he was overturned by a narrow majority in the Court of Appeal, which sided with ASOS.