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Legal Issues on Trademarks, Names and Domains

Here you will find answers to general and frequently asked questions on trademarks, trademark law, trademark protection and trademark applications - questions answered by the lawyer Karsten Prehm. If you require specific legal advice, which can be provided in accordance with official fee schedules or cost liabilities, please refer to a lawyer of your own choice. In the  Legal Directory  on Markenplatz, you will find competent lawyers who specialize in trademark law, copyright law and competition law.

This information, focusing on the situation in Germany and Europe, is provided by Karsten Prehm, Germany, specialist lawyer for trademark issues (www.markenservice.com) and associated member of the german editorial team of Markenbusiness. We welcome international editorial contributions to these and other questions concerning legal issues to do with intellectual property.

FAQ - Frequently Asked Questions:

What can be protected as a trademark?

Various trademark forms are can be differentiated:

• The word-trademark protects a word in every form that you wish;
  
  
• The word/design-trademark protects a word in connection with one or several graphic elements;
  
  
• The design trademark protects a particular graphic representation;
  
  
• Further trademark forms are, for example, a sound trademark or 3-D trademark.

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Can international protection be obtained for a trademark?

Apart from national trademarks in different countries, for which however it is often required to have a local representative in the area, there is the possibility of obtaining an international trademark protection via the European Community Trademark or International Registration according to MMA and PMMA.

The European Community Trademark has, after registration, a validity in all 15 member states of the Community. In 2004, the number of states will be raised to 25 following the entry of further countries. The European Community Trademark is obtained from the Department for Harmonization in the Internal Market, in Alicante.

At the World Intellectual Property Organization (WIPO) in Geneva, you can apply for International Registration for a national trademark or European Community Trademark. This Registration is possible in the current 71 countries who have signed the Madrid Agreement and Madrid Protocols. By the end of 2003, the entry of the USA will allow International Registration there also.

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How much does it cost to register your name as a trademark?

In Germany, a national trademark is registered with the Deutschen Patent- und Markenamt (DPMA) in Munich. The official application fees are 300 Euro for a registration in up to three of the 45 classes of goods and services.

For the European Community Trademark, the relevant body is the Department for Harmonization in the Internal Market in Alicante. Their fees are split into application and registration fees and amount in total, for three classes, to 2,075 Euro.

The fees for International Registration depend on the choice of countries and classes, but will come to at least 726 Swiss Franks.

Before each trademark application is lodged, a professional Similarity Search should be carried out. For the analysis of investigation reports and the carrying through of the application, the service of a lawyer, specialized in trademark law, is to be recommended.

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Why must an Trademark Search be carried out in the lead up to an application?

It could be that pre-existing, older trademark rights stand in the way of a successful application. These pre-existing rights can be from all the trademarks legally effective in Germany, i.e. German trademarks, European Community Trademarks and International Registration according to the Madrid Agreements.

A trademark application contains the risk of an objection to registration from a third party, or an erasure petition or a dissuasion, incurring liability for costs. It is advisable to recognize, assess and avoid these risks by a suitable search in the lead up to a trademark application.

In this connection, an investigation into company names entered in business registers is also to be recommended, to check for any existing older names and trademarks of a third party which have priority.

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How do I avoid expensive conflicts over trademarks on the Internet?

Tip 1: Before a domain registration, be absolutely sure to carry out a Trademark Search, especially if it concerns fantasy names or a composite name derived from fantasy names. But even general terms like *Scout* or *Allianz* can contain the possibility of trademark conflict. Likewise, company names and names of personalities should be avoided.

Tip 2: With trademarks, similarities are often enough to cause a conflict and lead to a dissuasion. Therefore a trademark search should be carried out in the form of a Similarity search. Important: Because, under trademark law, similarities very often lead to dissuasion being issued, a reliable pronouncement on the potential of conflict over a name can only be given following a legal assessment of the Similarity Search.

Tip 3: You should also check with international databases. For example apart from German trademarks themselves, European Community Trademarks and internationally-registered trademarks also have protection in Germany.

Tip 4: When you want to obtain protection for your domain or for your name which will go out via the Internet, you should also apply for a trademark with, for example, with the Deutschen Patent- und Markenamt. Here you can also protect your logo or a graphic.

Tip 5: If you want to use your domain for a longer period, or even if you have additionally registered another trademark, you should regularly check whether your rights are being infringed in order, where appropriate, to be able to react early with a dissuasion.

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How many registered trademarks are there?

At the moment, the number of registered German trademarks lodged with the Deutschen Patent- und Markenamt (DPMA) stands at 743,423 trademarks. Altogether at the moment, there are 1,250,497 active trademarks with protection in Germany (including EU and IR trademarks). In 2002, there were 56,492 trademark applications with DPMA.

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Why are regionally-active companies a risk group?

Regionally-active companies are a specially high-risk group with respect to disputes over trademarks. Often names are used, which have already been protected for a long time by other parties with a Patent- and Trademark-Office, without this being detected by the original trademark owners based in another region. However, through their Internet presence and a Domain Registration, these regional companies become suddenly visible and receive a dissuasion from the trademark owner, in most cases entailing high costs. Because a correct, professional choice of name is often overlooked in small businesses, no Trademark Investigation is carried out before the registration of a domain; and because immaterial assets, which in stark contrast to material assets, are managed and looked after in a neglected way, the company loses out financially in a big way, while simultaneously great risks of conflict are being taken.

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Where and how do I find a new name?

The name, the trademark belongs to the beginnings of companies and entrepreneurial projects. The Corporate Branding is a decisive factor for success and represents a valuable immaterial asset for the undertaking. The professional development of a trademark which is appropriate for the strategic vision of the company or the product is, in these times when immaterial resources are becoming more and more scarce, a great challenge. Often, however, the correct, professional choice of name is overlooked, especially in small businesses. Immaterial assets are mostly badly administered and looked after, in stark contrast to the material assets. The company loses enormous assets and possibilities for successful marketing, while simultaneously great risks of conflict are being taken. Professional name making or name finding is the foundation for hindering conflict situations and for building up a valuable body of immaterial assets.

Specialist agencies take on or coordinate, in a multi-stage customized process, all essential phases of the brand development, which starts from name making and ends with a completed brand development with global development and determining of the corporate design.

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How expensive can a trademark law conflict become?

The costs of a trademark rights dissuasion depend on the legal costs stemming from the dissuasion. In this connection the legal costs depend on the infringed trademark, not as frequently accepted, on the nature of the trademark infringement, for example - on an internet domain. So the legal costs with respect to an unused trademark is seldom fixed at under 25,000 Euro. If the trademark is being used, then at least 50,000 Euro is the rule. Well-known trademarks and trademarks connected with a large turnover will definitely justify higher costs. Therefore, the cost of the dissuasion already amounts to over 500 Euro on the basis of legal costs of 25,000 Euro.

If a provisional proceeding of injunction, main court procedure, appeal procedure before higher Court requires the service of a trademark lawyer, the accumulated costs climb quickly into five figures. Costs of more than 30,000 Euro in such cases are not unusual.

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How should I react to an caution?

Stated fundamentally - on receiving an dissuasion, three different strategies can be identified:

1. Acceptance of the dissuasion and Execution of a Declaration of Misprision.

2. Refusal to sign the declaration relating to obligation and misprision.

3. Anti-dissuasion and negative affirmative action for a right.

The choice of the correct reaction to an dissuasion in individual cases is determined primarily by its legality. Note: Not every dissuasion is justified!

For the assessment of the legal situation and the working-out of a suitable strategy, the employment of a specialized lawyer is recommended.

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How can I increase the value of my name?

After the trademark registration, a regular monitoring of your trademark is required, in order to ascertain the existence of trademarks with less senior priority and to prevent trademark infringements. If this monitoring of the trademark is not done, then dilution and obsolescence threatens the trademark through unauthorized use by a third party.

Likewise, it is also important to actually use the trademark for the claimed goods and services - at the very latest by the end of the five-year respite allowed for this. If this use is not made, an erasure petition from a third party could stand a good chance.

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Which utilization possibilities exist for a trademark?

If you do not want to make use of your own trademark, it can be offered for a licensing designed specifically to make actual use of the trademark. The trademark owner can give either exclusive or non-exclusive rights of use to the trademark, rights which can also be limited geographically or with respect to goods and services. In the case of exclusivity he can also choose whether to give up his own usage rights. In accordance with the contractual arrangement, the trademark licence grants to the license holder suitable usage rights and a right to ban against a third party. The license giver should ensure, at all costs, that the given license is also being used in the planned area, as well as that the quality of the products sold by the license holder is appropriate to the standard of the trademark.

Alternatively, the sale of the trademark is possible. Trademark law and the regulations of the European Community regarding Community Trademarks allow the free sale of trademarks, even the application connected with it, as well as partial sales of trademark rights. As the ban on blank trademark assignments (abolition of regulations of WZG by trademark law) has been cancelled, it is no longer required that the trademark is used inside a business, so that an exclusive sale of trademark rights or entitlement is possible.

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These informations focusing the situation in Germany and Europe are provided by Karsten Prehm, Germany, specialist lawyer for trademark issues  [www.markenservice.com] and associated member of the german editorial team of Markenbusiness. We welcome international editorial contributions to these and other questions concerning legal issues on intellectual property.