March 28, 2019
A dispute over the right to use a pizza parlour’s trademark ended up in the Market Court and ended with a solution that provides valuable pointers for trademark owners on protecting and defending their trademarks, writes Kolster's IP lawyer.
This recent decision by the Market Court relates to the Pappa Pizza trademark. A pizzeria company registered it as its auxiliary business name in 2006 and has since then used the name in its business. However, the company did not register the trademark until 2015.
Before this, in 2011 to 2014, another pizzeria company used the same name. After the company was transferred to a new owner in an asset deal, the new entrepreneur started using the same Pappa Pizza trademark. In 2017, the original user of the mark contacted the entrepreneur by letter, demanding them to stop providing restaurant services under the name of Pappa Pizza.
This series of events is a good reminder of how important it is to protect your trademark in good time.
Protect your trademark at an early stage
The pizzeria company that started using the trademark later requested in their proceedings started in the Market Court that the registration made in 2015 must be invalidated because the trademark was registered in bad faith. If a trademark has been registered in bad faith, it means that the registration has been obtained while being aware that another party is already using the mark. In such cases, the applicant for the registration has not used the mark before the use of the other mark was already started.
However, in this case, the company that had registered the trademark had been using the mark since 2006, before the other entrepreneur started using it, meaning that this was not a case of a registration obtained in bad faith.
Unclarities would have been avoided, if the trademark had already been registered in 2006, when it was first taken into use. In fact, it is not a good idea to delay protecting your trademark, and instead, you should ensure exclusive rights to your mark as early on as possible. It is also a good idea to perform a preliminary search before registration to check if the trademark is eligible for protection. We are happy to help our customers in all stages of trademark protection.
Establishment must be proven
In Finland, it is possible to obtain exclusive rights for a trademark either through registration or establishment, i.e. long-term use. A trademark is established if it is generally known as a specialised mark of the owner’s products in relevant Finnish business and consumer circles. The party invoking the trademark’s establishment always has the burden of proof. It is worth ensuring one’s exclusive rights to a trademark primarily through registration as establishment is a more uncertain measure because of the burden of proof.
Collect correct material on the usage of your mark
Collecting material on the usage of a trademark is important because these materials often play a key role when disputes arise. Insufficient material may result in losing your trademark rights. The material is even more important, if there is a need to prove the establishment of the trademark, or if the other party aims at cancelling the registration, claiming that the trademark has not been in use.
Quantitatively and qualitatively correct evidence material on the usage and establishment of a trademark is of utmost importance. In fact, it is worthwhile to actively collect diverse material on the usage of your trademark even before any potential disputes arise. Such material includes advertisements, product packaging, sales figures, reports on the resources used for advertising, newspaper articles, and sufficiently comprehensive market researches conducted by a neutral party.
We are happy to help our customers prove the usage and establishment of their trademarks.
Intervene promptly in trademark infringements
It is crucial to promptly intervene in trademark infringements because otherwise there is the risk that the trademark owner loses their right to prohibit. The Trademarks Act requires the trademark owner to take measures in good time to prevent the use of the trademark after becoming aware of its use.
In this case, according to the company that started using the mark after the other one, they had the right to use their established trademark because the pizza parlour that has registered the mark had not presented their claims within the reasonable time required by legislation. However, the Market Court found that there was not enough proof of establishment, so in its decision, it did not issue an opinion about whether the original trademark owner had taken measures in good time.
If you as a trademark owner notice that your competitor, for instance, is using your trademark or a similar mark without consent, contact our experts immediately. We will help you assess the situation and recommend potential actions.
Reach a detailed agreement on the assignment of rights
When trademark rights or other intellectual property rights are assigned to another party, for instance in an asset deal, it is important to perform sufficient background research before the deal and reach a detailed agreement on the assignment of the rights.
In this dispute case, the intention was to assign rights related to the Pappa Pizza name in the sales contract of the asset deal, but according to the Market Court, the parties were not able to assign the rights competently.
Once the background work has been done thoroughly and the agreement has been drafted carefully, it is possible to avoid unclarities and problems. We are happy to help our customers avoid the pitfalls of assigning IP rights.
Read the decision by the Market Court here.