Trevor Little

New research has revealed that 80% of C-level executives feel that trademark infringement is on the rise, with more than half reporting that their organisation has initiated legal action against third parties in a bid to defend their brands. While a useful insight into the concerns of senior management, the challenge for counsel is turning this into budgetary support for trademark enforcement endeavours.

Commissioned by CompuMark, the report, titled The Trademark Ecosystem: Through the Lens of the C-Suite, was conducted by research company Opinium. The company surveyed 440 C-suite respondents across the US, UK, Italy, Spain, France and Germany. It is the focus group that makes the report worth noting – while many studies concentrate on the perception and experience of trademark counsel, the thoughts of chief executive officers, chief technology officers, chief information officers and chief finance officers are often left unexplored. With the C-suite representing key stakeholders for counsel to engage in, the report therefore makes for important reading.

In this regard, the positive is that there does seem to be a high degree of trademark awareness. The negative is that, for the most part, many respondents are aware of trademarks due to being on the wrong end of infringement. The majority of respondents (79%) felt that trademark infringement was on the rise, with 63% having been negatively affected by it. Meanwhile, 53% indicated their organisation had taken legal action on third parties who had infringed upon their brand, while a third have had to change one of a brand name as a result of infringement. Reflecting this, 40% of participants stated that they were more concerned about trademark infringement than five years ago.

Exploring this fear further, loss of revenue was the most frequently cited negative consequence of trademark infringement (26%), followed by damage to brand reputation (21%), customer confusion (21%), reduced customer loyalty and trust (19%) and loss of time for marketing and legal teams (12%).

As the report acknowledges, trademark registrations are on the rise across the globe. It therefore doesn’t take much of a logical leap to expect infringement to be rising also. Put simply, more marks mean more clearance challenges and more opportunities for infringers. The former trend also looks set to continue. Some 61% of respondents had launched new brands in the previous year, with two-thirds stating that new trademarks would be sought in the coming year. As a result, 41% of respondents indicated that they were increasing budget for trademark clearance.

Interestingly, while there is an enthusiasm for portfolio expansion, just one in five of respondents said they actively watched more than three quarters of their marks, while half said they only watched between 26%-75% of their marks. Therefore, once secured, many marks are going unmonitored with respect to possible competitor and infringer activity.

As to why, this goes unexplored in the research. One suspects, however, that cost could be a factor. Similarly, while budget for clearance was examined (CompuMark’s focus – as a provider of such services – being specifically clearance and watching), whether the C-Suite plan to up enforcement budgets to counter perceived rising infringement similarly went unanswered. It will be a concern for counsel if companies are happy to spend registering marks, but then let enforcement budgets wither or stay static.

Yesterday we reported on the recent Managing the Trademark Asset Lifecycle conference in Munich, at which the topic of how trademark counsel can establish and maintain meaningful relationships with other corporate stakeholders was front and center. For those seeking to engage CEOs and CFOs, the report is positive in that there is a recognition of both the benefits of, and challenges surrounding, trademark-related activities. It also provides an insight into some of their fears – always useful to know when seeking to address pain points and illustrate the value of the legal team in countering threats. However, whether this will be enough to secure additional support and department funding will vary massively from company to company. 

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