Trade Marks for the IT Industry: EU Trade Mark Registration

A brand is undoubtedly an important asset and a strong foundation for any business. The concept is multifaceted and generally includes names, logos, slogans, colour combinations, corporate identity, and even sounds or scents, customer service, and other elements. Together, these create a lasting impression of a particular product or the company’s services among customers and potential customers.

Here is the point: most elements of a brand can be registered as a trade mark. A trade mark, referred to as a “mark for goods and services” under Ukrainian legislation, is a designation used to distinguish the goods or services of one market participant from those of another. For convenience, a trade mark is also referred to below as a “TM.”

A TM may take the form of a name, logo or image, or a combination of these, which are the formats most familiar to us. It may also take rather unusual forms, such as a scent, sound, holographic elements, multimedia, and more. Below are several examples of trade marks with links to the relevant register entries in different jurisdictions.

Let us be honest: the general level of legal awareness in Ukraine remains relatively low. Providing services based on a verbal promise without a contract and making advance payments without written arrangements are common and painful phenomena for lawyers. Failure to register a TM belongs on the same list of “fails.”

We frequently receive enquiries relating to domain name disputes, brand copying, or an application being banned from the App Store. These problems could often be resolved quite easily and without unnecessary suffering, except that no one had thought about registering the trade mark.

As a rule, this is caused by a simple lack of awareness of the benefits of a registered TM, insufficient budget, or postponing the matter until later—which usually means never. Although there is no statutory requirement to register a TM as a condition for conducting business, it has effectively become a requirement imposed by the market and the level of competition within it.

Trade Marks for IT Businesses

Does a TM have greater importance for any particular industry? Probably not. However, online businesses without a registered brand suffer particularly noticeable consequences because the number of tools available to unfair competitors has increased.

The IT industry is both promising and highly competitive, and one naturally reinforces the other. How many companies are already operating under names that play on the word “soft” in one way or another? How many of these names sound alike?

There are also many applications with identical names and many similar domain names. Such situations create potential risks from the perspective of trade mark infringement.

Let us examine why a trade mark is needed in the IT industry and the situations in which it is indispensable.

Domain Names

As a general rule, the principle of first come, first served applies to domain name registration. If the desired domain name has not yet been registered, the registrar will be able to delegate it.

However, it is important to understand the following:

(i) To delegate certain domain name formats, the registrar requires proof that the corresponding trade mark has been registered. In Ukraine, for example, such proof is required to obtain a second-level domain name in the .UA domain zone.

The TM must contain the same form of the name as the desired domain. Transliteration is also permitted, as is a TM registered in the form of a logo if the logo contains a word element.

For example, a corresponding TM may allow the registration of the following domains:

• legalitgroup.ua;
• legal-it-group.ua.

(ii) It is incorrect to assume that registering a domain name establishes rights to a particular name, prevents others from using that name, or serves as an argument in a trade mark dispute.

What Risks May Arise?

Another person or company may register a TM corresponding to the domain name. As a result:

1. the domain owner may be unable to register the same TM in the relevant jurisdiction because a conflict between the marks will exist;
2. the owner of the registered TM may potentially be able to “take” the domain, including by obtaining the relevant rights through legal proceedings, on the grounds that they own the registered TM and that the domain owner is infringing their rights.

Another risk is the registration of a similar domain name that reduces traffic to the “original” website. Without a registered TM, it is extremely difficult to challenge the opponent’s actions and secure the redelegation of the domain.

(iii) When a matter develops into a domain name dispute, a registered trade mark effectively determines the prospects of resolving it successfully.

To protect a domain name or prevent its bad-faith use by an opponent under either the UDRP, the Uniform Domain Name Dispute Resolution Policy, or the UA-DRP, the .UA Domain Name Dispute Resolution Policy, it is necessary to demonstrate that the domain name is identical or confusingly similar to a trade mark in which the complainant has rights.

According to established practice, the existence of a registered TM is sufficient to establish that a domain name is confusingly similar to that TM.

A trade mark is therefore one of the main arguments when applying to the relevant organisation with a request to redelegate a domain that infringes intellectual property rights.

Mobile Applications

Start-ups do not always allocate funds for trade mark registration in their budgets. Where investors are involved, registration may be a mandatory condition for receiving investment.

On the other hand, from a developer’s perspective, launching an application does not require a significant amount of overhead expenditure, so attention is often focused solely on the prospects of attracting advertisers.

The mobile application development industry is unique because it is difficult to predict which applications users will actually like. As a result, successful applications often acquire clones—applications with similar or identical functionality.

Healthy competition is generally a good thing. However, where not only the idea but also the name or logo of an application is copied with the aim of attracting part of the original product’s target audience, this clearly constitutes an infringement of rights and may amount to unfair competition and free-riding on goodwill.

One of the protection mechanisms available in such cases is to register the name, logo, or slogan of the mobile application in the jurisdiction in which the application is distributed.

In fact, this should be done at the concept stage or during the early stages of development.

Online application distribution platforms do not require developers to provide proof of TM registration before using a particular name or logo in the title of an application when uploading it. However, this does not remove the obligation to respect the intellectual property rights of others.

What Opportunities Does a Registered TM Provide?

(i) Preventive function. In an ideal world, before publishing an application, the developer checks whether the TM they intend to use as the product name has already been registered and whether its use would infringe third-party rights.

(ii) Protective function. Where an infringement occurs, including the copying of an application’s name in the titles or descriptions of other applications, a TM provides grounds for having the infringing application or the infringing developer’s account banned.

As a rule, proof of TM registration is necessary and sufficient to confirm the infringement.

(iii) Where the developer finds themselves on the other side and a complaint is filed against them and their application, having a registered trade mark will serve as evidence of good-faith use of the relevant name or logo and may protect the application from being removed from the platform for infringement.

Investment and Promotion

The investment attractiveness of a business depends, among other things, on the strength of its brand. The strength of a brand depends on the recognition of its attributes among users.

Recognisable brand attributes are those in whose promotion money has been invested. Investing in such promotion without registered trade marks is highly risky. We believe the connection is clear.

In addition, as already noted, a registered TM is sometimes a mandatory requirement imposed by investors.

A Business Asset

First, rights to a TM may be contributed to the share capital of a legal entity.

Second, rights to use a TM may be granted under a licence agreement. This is particularly relevant in the video game industry, where a game distribution agreement between the development company and the publisher may contain terms granting such rights.

More generally, the right to use a TM may also be granted:

• in collaborations;
• for the production of merchandise;
• in franchise relationships;
• in connection with API placement or use.

Accordingly, a registered TM may generate additional revenue rather than merely performing a status-related function.

Other Benefits

In addition to the specific benefits of TMs for IT businesses described above, a trade mark also:

• provides a priority right to use the relevant name, logo, or another form of the mark: from the moment the application is filed, the applicant may challenge marks filed later if they conflict in relation to the relevant goods or services within the same jurisdiction;
• makes any unauthorised use of the TM unlawful and subject to liability under the applicable legislation, meaning that the trade mark may be used as a mechanism for recovering damages from infringers;
• where registered in Ukraine, may serve as the basis for the international registration of the TM under the Madrid System, allowing simultaneous registration in selected countries through a single application where there are plans to enter foreign markets;
• where the marketing budget is limited, provides a practical solution that reduces the risk of losing the brand through unfair competition and the financial losses associated with developing an entirely new set of company attributes.

Another obvious disadvantage of using a TM without registering it is the need to conduct constant monitoring and verify whether the use of the mark infringes third-party rights.

This may result in an unexpected infringement of the TM owner’s rights and an obligation to compensate for the resulting damage.

Multiple Jurisdictions: How Does a TM Operate in the EU and Where Should It Be Registered?

The rule that should be remembered when selecting a jurisdiction for TM registration is:

A TM provides protection only in the country or jurisdiction in which it is registered.

A trade mark registered in Canada does not provide protection in the EU, the United States, or other countries. Infringements of the TM in those countries will not have consequences in the country of registration, except where the TM has been recognised as well known.

This territorial feature creates broad opportunities for bad-faith conduct.

For example, international brands, including the TMs of well-known social networks, applications, games, and similar products, are registered in a wide range of countries as early as the product launch planning stage.

This strategy is intended to prevent “trade mark hijacking,” meaning the registration of such TMs by other parties for the purpose of subsequently selling them to the genuine TM owners.

Which Country Should Be Selected for Trade Mark Registration?

There is no single answer to the question of where a TM should be registered.

The obvious starting point is registration in the country in which the business primarily operates. However, IT activities are almost never limited to a single market: both outsourcing companies and product companies target broad audiences.

In such a case, priority markets should be identified and registration should begin with them.

For example, names and logos for mobile applications are commonly registered first in the United States and then in other countries as the business expands.

Where a TM must be registered in several countries, one of the following options may be selected:

• filing separate applications in each jurisdiction;
• registering through the Madrid System using a single international application.

Option 1

Separate national applications may be convenient where the number of jurisdictions is limited and the lists of goods or services are not identical in each jurisdiction—for example, where only a limited range of services is available in certain markets.

Another advantage is that the applications are not connected. A refusal in one country does not affect the registration process in other countries.

The language of an application in a foreign jurisdiction may create difficulties. Filing in English is not always possible because, in many jurisdictions, an application may only be filed in the official national language.

Local representatives may therefore need to be engaged to communicate effectively with the relevant intellectual property office.

Option 2

The Madrid System is an excellent alternative where registration is required in many jurisdictions because it helps optimise the process.

This optimisation includes both reducing the financial burden and reducing the time that would otherwise be required to complete the registration process individually in each country.

An international application is filed through the system of the World Intellectual Property Organization, or WIPO.

The main benefits of this option include:

• under the Madrid System, a TM may be registered in 125 countries that are members of the Madrid Union, consisting of the contracting parties to the Madrid Agreement and the Madrid Protocol;
• one application language—English, French, or Spanish—and fees paid in a single currency, Swiss francs;
• a centralised system for monitoring the status of the application;
• as a general rule, the ability to extend the international registration to additional countries after registration.

An important condition for filing a single international application with WIPO is the existence of a registered trade mark or an active application for registration in one of the member countries. This is referred to as the basic mark.

In this context, it is important to remember that the international registration remains dependent on the basic mark for five years.

What does this mean?

The application in the first jurisdiction may be refused in whole or in part, or the registration may be cancelled in whole or in part. In that case, the international registration will be cancelled to the corresponding extent.

For this reason, it may be advisable to file an application for international registration only after the mark has been successfully registered in the original jurisdiction.

This helps avoid unnecessary losses because official fees are not refundable where registration is refused.

The list of goods or services in the international application may be narrower than the list covered by the basic mark, but it cannot be expanded beyond the scope of the basic mark.

A strategy for registering a TM in international markets should therefore include an analysis of the goods and services that may need to be covered.

For example, if a company currently develops only mobile games but plans to expand into the console video game market, those plans should be taken into account when preparing the list of goods and services for the initial TM registration.

The international application is submitted through the same authority that handled the registration of the basic mark.

After WIPO receives the application and verifies that it complies with the formal requirements, WIPO forwards it to the relevant intellectual property offices in the countries designated in the international application.

Each office decides whether to grant legal protection to the TM under its applicable national legislation.

Even where registration is refused in one country, that decision does not affect the possibility of registration in the other designated countries.

The international registration fee consists of:

• a basic fee;
• an individual or supplementary fee for specified contracting parties, although not every country charges an additional fee;
• an additional fee for each class of goods and services beyond the first three classes.

WIPO provides a convenient fee calculator for estimating the cost of an international registration.

Registering a TM in All EU Member States

In addition to the international registration procedure described above, another popular procedure for registering a mark in several countries at once is registration through the European Union Intellectual Property Office, or EUIPO.

This procedure allows a TM to be registered in all EU Member States through a single application.

The EU Trade Mark Registration Process: What Is Special About It?

The registration requirements applicable in a jurisdiction also influence the choice of where to register a TM.

Although the general requirements and grounds for refusal are similar, trade mark registration procedures differ between jurisdictions. Some requirements may be burdensome, so it is important to understand them in advance.

Preparing for Registration

Before initiating the trade mark registration procedure, it is necessary to determine:

• who will be the applicant: an individual or a company;
• the class or classes in which the TM will be registered;
• the list of goods and services supplied or provided under the TM;
• whether the name or logo indicates the nature of the relevant services or goods and is therefore descriptive.

Once the application has been filed, the list of goods and services may only be amended by narrowing it. Expanding the list is not permitted.

Descriptive trade marks have weak distinctive character and, as a general rule, are not eligible for registration.

A clear example is the word “Apple.” For technology products, “Apple” is sufficiently distinctive as a trade mark. For the sale of apples, however, “Apple” directly describes the goods and would not normally qualify for registration.

Examples of descriptive mobile application names include:

• Adware Cleaner;
• Disk Cleaner;
• Virtual Installer;
• Duplicate File Cleaner;
• Number Finder.

The function of each application is directly described by its name. The signs are therefore considered descriptive.

To assess a TM from this perspective, it may also be useful to analyse how frequently the relevant word or slogan is used in advertising for the goods or services covered by the application.

If it is used frequently, there is a high likelihood that the mark will be regarded as descriptive.

Preliminary Search

An important step before beginning the registration procedure is conducting a preliminary search for potential conflicts with identical or confusingly similar trade marks belonging to other owners or applicants.

This helps avoid financial losses because it allows the applicant to assess in advance whether the desired mark has a realistic prospect of registration and reduces the risk of refusal or opposition.

When assessing the search results, attention should be paid to the following:

• the lists of goods and services do not necessarily have to be identical for a conflict to exist; as a rule, similarity or relatedness may be sufficient even where the goods or services fall within different classes;
• a potential conflict may arise where names or logos are similar, including where they sound alike; for example, “Book-reader,” “Bookreeder,” and “Book radar,” or “F. Barkley” and “Ef Barglee,” may be phonetically similar;
• a conflict may also arise where one trade mark incorporates another; for example, “Pixels” and “Pixels Development,” when used as trade marks for companies providing website development services, are likely to be regarded as similar, and the later application may be refused;
• the likelihood of confusion is assessed from the perspective of the average consumer; even where similar TMs have entirely different semantic meanings, this may not prevent refusal if those differences are not obvious to consumers;
• “Foursquare” and “Fivesquare,” or “Instagram” and “Storygram,” may appear to be different trade marks at first glance, but a logical connection can be identified between them.

If a consumer encountering a trade mark may assume, because of a similar name, that a product belongs to another company, that certain goods constitute merchandise of a well-known brand, or that a collaboration exists, the TM is highly likely to be considered conflicting.

Useful services for conducting a preliminary search include:

• WIPO Global Brand Database: https://www3.wipo.int/branddb/en/;
• TMview: https://www.tmdn.org/tmview/.

Registration Stages

The registration process consists of the following stages:

1. Filing the application and paying the official fees.
2. Examination of the application documents for compliance with formal requirements and for the existence of grounds for refusal.Where applicable, the intellectual property office may notify the applicant of identified issues, and the applicant may respond to the office’s correspondence.Registration may be refused at this stage where the applicant fails to provide additional information or convincing arguments in favour of registration, including where a conflict with another sign has been identified or the TM is descriptive.
3. Publication of the application and establishment of a period during which owners of other trade marks may file oppositions.If the opposition proceedings are unsuccessful for the applicant, the application may be refused.
4. If no opposition is filed, a decision to register the TM is issued and a certificate is granted.The certificate is valid for ten years and may generally be renewed an unlimited number of times.

The procedure in different countries generally follows the stages described above, although the applicable time limits may vary.

Certain jurisdictions also impose specific conditions and requirements for trade mark registration. Some features of popular jurisdictions are discussed below.

Specific Features of EU Trade Mark Registration

A TM may be registered in the European Union in two ways:

1. through the separate intellectual property offices of individual Member States;
2. by filing a single application with the EUIPO.

Unlike registration through the Madrid System, the EU application is subject to a single filing fee.

The current fee is EUR 850 for one class, plus EUR 50 for the second class and EUR 150 for each additional class.

Compared with the cost of registration in every individual Member State, this is clearly advantageous both financially and in terms of time efficiency.

Tips and Tricks for Successfully Registering a TM in the EU

Non-residents file an application through an online account with the assistance of a representative before the EUIPO.

Communication with the Office is also conducted through the representative.

The form that allows a representative to be added is the Advanced Form.

When preparing the list of goods and services, it is recommended to select terms from the approved Goods and Services Builder.

This database contains terms that have already been accepted by the EUIPO and national intellectual property offices within the European Union. Using these terms may simplify the examination of the application.

Applicants may provide their own descriptions. However, doing so may delay the process and may create a need to amend the list of goods or services.

The EUIPO examines applications for absolute grounds for refusal, including:

• descriptiveness;
• conflict with generally accepted principles of morality;
• the potential to mislead consumers;
• other absolute grounds.

A particular feature of the EU TM registration process is that the EUIPO does not independently examine whether the application conflicts with earlier filed or registered trade marks.

This issue is left to the relevant rights holders.

Once the application is published, owners of earlier rights may file an opposition and claim that a conflict exists, providing supporting arguments.

It does not matter whether the earlier TM was filed or registered throughout the entire EU or only in one Member State.

A conflict in a single country may therefore prevent registration of the TM throughout the EU under the single application.

This again confirms the importance of conducting a preliminary search.

At the same time, after the applicant completes the “goods and services” field, the EUIPO application system provides a list of potential conflicts.

This list should be reviewed to ensure that all such potential conflicts were taken into account during the preliminary search.

Potential conflicts may be searched using the databases of registered marks and applications mentioned above, as well as the EUIPO’s eSearch plus tool.

The entire registration procedure usually takes approximately five months, provided that no grounds for refusal are identified and no oppositions are filed.

Conclusion

When investing time and money in creating and promoting a product, it is also important to protect the brand.

The current IT services and products market imposes its own rules. The wide range of opportunities for unfair competition, free-riding on goodwill, cybersquatting, and similar conduct encourages businesses to use every lawful mechanism available to protect their brands.

Trade mark registration is one such mechanism.

Regardless of the jurisdiction in which a business operates, a trade mark is both a protection tool and a business asset.

Registering the trade mark without delay in every jurisdiction in which the business operates or whose market it plans to enter in the near future is the minimum a business owner can do to protect the business and strengthen its market position.

Legal IT Group helps businesses register trade marks in the EU. We conduct preliminary clearance searches, prepare and file applications, and provide support throughout the examination procedure.

Our team protects brands and helps businesses avoid the risks of refusal and trade mark disputes.