A more connected world

This is an Insight article, written by a selected partner as part of WTR's co-published content. Read more on Insight

Susie Harris, general counsel of Plum Guide and chair of MARQUES, explains why small and medium-sized enterprises increasingly require global, integrated systems to help protect their IP rights.

A more connected world

I have spent much of my career going into companies when they are at an early, innovative stage. Earlier this year I joined Plum Guide, an exciting start-up in the luxury travel industry. Before that, I was chief legal officer at King (now part of Activision Blizzard), which makes games including Candy Crush Saga, and I also worked at Skype (now part of Microsoft). One lesson that I have learnt during this time is that there is a great need for coordinated protection and enforcement of IP rights across all industries and markets.

I believe this to be the case particularly for creative and technology-driven start-up companies. The reason is that however small you are, even if you have just a few employees in one office, you are immediately global. As soon as you have an online presence, you potentially have customers, clients and competitors all over the world. For a start-up or small or medium-sized enterprise (SME), this presents a very real problem when trying to protect intellectual property: applying for and enforcing IP rights takes time, specialist knowledge and resources – three things that are often limited in start-ups.

Over the past two decades or so, national, regional and international IP rights protection systems have evolved significantly and can now offer many benefits to both large and small companies. Although great progress has been made in improving accessibility and streamlining procedures in recent years, there are still many divergences in practice. With business becoming increasingly digital and global, it is more important than ever to strive for consistency across both registration and enforcement, and to help educate all businesses on the importance of IP rights.

MARQUES represents a wide range of companies based in Europe and beyond, and we are seeing (and in some cases working on) a variety of initiatives to promote greater accessibility to IP rights protection, as well as legal certainty, consistency and transparency, including:

  • harmonisation of laws and regulations;
  • alignment of practices and simplification of procedures; and
  • education and enforcement.

Harmonisation of laws and practices

Obtaining IP rights protection, notably for trademarks and designs, is the first vital step for both big and small companies. Despite being an early-stage start-up, at Plum Guide we have already seen copycats seeking to use our brand. Obtaining registrations at an early stage enables us to enforce our rights and prevent consumers from being misled. It also reassures our investors that their investment is being protected and maximised. At MARQUES, therefore, we welcome moves to make trademark and design registration and enforcement more accessible and comprehensible to SMEs, including:

  • electronic searching, filing and repository tools;
  • efficient and dependable administrative proceedings; and
  • improvements in user experience, including in IP learning and networking.

Obtaining protection internationally may pose further problems, given the need to identify which territories to prioritise and how much resource to dedicate to them. During my time at King, we faced online infringement on a global scale and so struggled to limit the number of territories in which we registered our rights. This illustrates the real dilemma that all in-house counsel face: we know that infringements can happen anywhere, but we must always prioritise resources. This is particularly acute for start-ups.

Brand owners are reassured to see increasing participation in systems that simplify protection internationally, such as the Madrid Protocol and the Hague Agreement. In particular, MARQUES has long worked to promote membership to the Madrid System, and we welcome the recent accession of large markets such as Brazil and Canada. We look forward to more members joining soon. On the design protection front, MARQUES has also been active and has achieved successful cooperation with the WIPO, promoting use of the Hague System in a series of roving seminars guiding design applicants on practical tips to help overcome registration problems and get the best out of this efficient multi-jurisdictional design protection system.

However, harmonisation goes beyond merely aligning laws. It also extends to making practices and procedures more intelligible and fair for users. In this respect, we are really pleased to witness the continued growth of collaborative initiatives and actual cooperation among IP offices in Europe and globally, as well as more user-friendly tools and services, such as TMview, DesignView and the Global Brand Database, which are invaluable resources for IP applicants.

In Europe, the cooperation between IP offices, led by the EUIPO in the legal framework of European cooperation, and all the resulting convergence projects have proved a great benefit to trademark and design users. MARQUES has been one of the major contributors under this umbrella, and has also been active in initiatives to support the quality review of operations, as well as EUIPO Stakeholder Quality Assurance Panel audits tackling decisions on oppositions, absolute grounds and design invalidity with a view to making practice more accurate and predictable. It is vital to the success of all such initiatives that the voices of users are heard.

Looking ahead, MARQUES has submitted comments on EUIPO’s Strategic Plan 2025 and participated in a Strategic Session of Users Groups in September 2019. We at MARQUES especially welcome the focus on making the IP system work for all businesses, particularly SMEs, and the goal to promote accessibility and understanding through:

  • increasing the successful use of intellectual property by SMEs; and
  • increasing SMEs’ knowledge on the use and value of IP rights.

MARQUES is keen to see how the European cooperation projects will be developed under the new Strategic Plan. We would also welcome cooperation between the EUIPO and national offices to support the implementation of the revocation or declaration of invalidity procedures required by the new Trademark Directive, as well as appropriate training and formal cooperation to build an IP knowledge database or information hub on national non-registered trademark rights, among other priorities.

We expect to see further progress in the next few years in further closing the gaps in IP rights protection systems at national, regional and international levels and delivering further harmonisation. This is vital as forecasts indicate that the need for IP protection will increase, brand owners will continue to expand into new markets and IP rights holders will therefore need to be able to depend on robust IP protection. A recent EUIPO-EPO report assessing the importance of IP rights to the EU economy between 2014 and 2016 found that IP rights strongly benefit the European economy, as industries that make intensive use of IP rights such as patents, trademarks, industrial designs and copyrights generate 45% of GDP (€6.6 trillion) in the European Union annually and account for 63 million jobs (29% of all jobs).

Education and enforcement

Improved systems for registering IP rights are, however, only part of the story. We also need effective and efficient systems for enforcing rights and raising awareness about the value of intellectual property so that companies’ rights are understood.

One example of the problems that rights holders face is bad-faith registrations. When I worked at Skype several years ago, we faced numerous cases where individuals had registered the Skype logo marks in China almost as soon as Skype launched and well before Skype started thinking about protecting its brand globally. The individuals then tried to stop Skype using its own brands in the country. Such problems can be difficult, time-consuming and expensive to deal with, particularly if you are unfamiliar with the jurisdiction in question.

Thankfully, in the past few years many countries have taken big steps forward in protecting famous marks and dealing with bad-faith registrations, including China. It is important to share knowledge and experience across different regions and in this respect the cooperation between MARQUES and the China Trademark Association has been invaluable. MARQUES has taken part in the past three China Trademark Festivals and has also welcomed China Trademark Association representatives to present workshops at the MARQUES Annual Conference. Where legal frameworks are different and unfamiliar, it is particularly important to highlight and develop the mutual understanding of business needs and priorities in intellectual property and to improve mechanisms where possible.

Amendments to China’s Trademark Law came into effect on 1 November 2019 specifically to address issues including bad-faith trademark applications and damages for trademark infringement. It is significant that the Chinese legislature clearly intended to respond to widespread concern among brand owners about the escalation in counterfeit goods available in the Chinese marketplace, as well as in malicious trademark registration. The new provisions should further empower the administrative and judicial authorities to effectively tackle those infringement cases, as well as giving much stronger means to legitimate trademark owners to defend their rights. Another very positive development was the recent bilateral agreement between the European Union and China to protect geographical indications from each region against imitations and usurpation.

While on the technical level this work is vital, it must be complemented by activities to educate and raise awareness about IP rights and their significance throughout society in general. This is especially important in the context of fighting piracy and counterfeiting. MARQUES regularly attends institutional events organised in this area and supports the work and initiatives of the European Observatory on the Infringement of Intellectual Property Rights. The European Observatory provides a forum to discuss and promote best practices, recognise successful initiatives and compile information to assist IP rights holders. Its work is fundamental in facilitating cooperation among all relevant stakeholders from the public and private sectors and civil society in the protection of IP rights against piracy and counterfeiting.

Protection on platforms

In an increasingly digital and global world, there is another dimension that we cannot overlook when protecting and enforcing our intellectual property: the Internet.

Brand owners are now very familiar with procedures regarding domain names and how to protect brands in the digital environment. However, this is becoming more of a challenge for a number of reasons: the number of GTLD domains is expanding and is likely to grow further; there are serious restrictions and growing uncertainty regarding Whois information following the implementation of the EU General Data Protection Regulation; and the functioning of the UDRP is set to be reviewed. On this point, MARQUES has always been at the forefront of advocating the value and effectiveness of the UDRP and believes that changes should be made only if they are based on evidence. In 2019 we compiled research estimating that brand owners have spent at least $360 million on resolving disputes since the UDRP was launched, and that complainants win about 85% of cases. We will continue to defend the UDRP system by resisting changes that are based on bias, anecdote or edge cases, rather than evidence.

However, in today’s commercial world, domain names are only one aspect of a company’s identity, and as more counterfeiting moves online we must pay attention to enforcement procedures available on a variety of platforms, including online marketplaces, social media forums and search engines. On one hand, it is pleasing to see that many of these platforms recognise the threat of IP infringement and have put in place some measures to deal with it. On the other hand, many businesses find it frustrating that there is still great divergence in how platforms support the fight against IP infringement in practice.

For these procedures to be effective, it is vital that they are clear, easy to use and accessible. Greater consistency between platforms would be welcome, and it would also be desirable for them to share learnings and best practices, so that we do not have to reinvent tools each time.

Brands must exist on multiple platforms to communicate with customers, staff and investors, among others. Therefore, having effective means available to tackle IP rights infringement should provide an efficient and inexpensive way to police a global brand.

More work to do

One of the findings from the European Observatory’s Intellectual Property SMEs Scoreboard 2019 was that IP rights are critical for SMEs. This research, commissioned by KPMG Spain, found that 54% of IP rights holders said that they had seen positive results after registering their IP rights:

  • 52% identified an increase in reputation;
  • 39% identified an increase in turnover; and
  • 37% identified an ability to access new markets.

More worryingly, however, was that the scoreboard found that just 9% of SMEs own any registered IP rights and the number of SMEs that had not registered their IP rights due to lack of knowledge had grown from 25% in 2016 to 38% in 2019. Just 25% of medium-sized IP rights holders have professionally valued their intangible assets and only 13% of IP rights holders have attempted to gain finance using their intangible assets.

While IP systems offer many benefits to SMEs, there is still much work to do to bring down barriers and make IP rights fully accessible and comprehensible to all businesses, both large and small. Only then will the potential of start-ups and SMEs to transform the economy be fully realised. We at MARQUES look forward to working with governments, agencies and other user associations to achieve this aim.

Unlock unlimited access to all WTR content