Trademark Turf Wars: Giants versus Pioneers - The участь малых компаний под натиском крупных брендов
- Illustration: A playful design featuring a cartoon alligator with a striped body, wearing a baseball cap, and holding a paddle.
Corporate Showdown: Large Enterprises Pursuing Legal Action Against Smaller Businesses Through Cease-and-Desist Demands - Titan Clash: Large Corporations Alert Smaller Enterprises
Ever thought a simple, quirky logo like this could land you in a legal battle with a well-established, multinational conglomerate? That's what happened to Felix Huynh, the 36-year-old founder of "Broccodile," based in Mühlacker (Enzkreis). The French fashion brand Lacoste, known for its iconic green crocodile logo, sent him a cease-and-desist letter over Huynh's Broccoli reptile design. Despite his belief that the two logos bore little resemblance, Huynh was initially asked to pay over 5,000 euros, with a dispute value reaching half a million euros. Huynh refused, and now fears a lawsuit. Lacoste did not comment on the matter.
Small companies frequently find themselves in this precarious position, forced to contend with the might of large, strongly-branded, financially powerful corporations. Legal challenges for suspected or actual trademark infringements are a common tactic used by big-name brands to safeguard their intellectual property and prevent their brands from becoming diluted, according to Jens Klaus Fusbahn, a specialist lawyer in intellectual property rights. However, in some cases, these challenges may go too far.
The case of Stuttgart-based Selva Negra Spirits is a prime example. The duo behind the company unintentionally found themselves embroiled in a dispute with herbal liqueur manufacturer Jägermeister. They sold an agave liquor featuring a deer antler logo, leading to a dispute value of around 250,000 euros - a financial hit for the small business. During this time, the company felt significant pressure from the financial strength of Jägermeister. However, the matter eventually ended favorably for Selva Negra Spirits, with the Higher Regional Court of Hamburg ruling that depicting a deer or deer-like figure did not automatically constitute a trademark infringement. Despite the court awarding costs, the company still faced considerable expenses.
Legal disputes invariably come with costs that small companies may not be able to afford, according to patent attorney Alexander Bulling, who teaches at the University of Stuttgart. Additionally, small companies often misjudge their legal position, leading to protracted disputes. Yet, not every case ends in financial ruin for the little guy. A Swabian toy company successfully defended its use of a yellow triangle resembling Caterpillar’s construction machinery logo after a long-standing legal dispute. Apple once threatened a small café in Bonn for using an apple-child illustration but later withdrew its opposition. And Jack Wolfskin backed down in a trademark dispute with small retailers over alleged infringements.
Case Studies
- Timeless Spirits vs. Bacardi: The US-based vodka producer Timeless Spirits used cease-and-desist letters and legal action against Bacardi for its use of a trademarked slogan. Although Bacardi withdrew its application after facing opposition, the case serves as a reminder of how even large companies can be challenged by smaller brands.
- Subway India vs. Infinity Foodstuff: Subway, the global sandwich chain, sued Infinity Foodstuff in India, alleging infringement of its “Suberb” mark. Despite the court finding no likelihood of confusion and the smaller business altering its name and branding, Subway continued its legal pursuit, resulting in significant legal costs for the small bakery. This case is often cited as an example of “trademark bullying.”
- BigBasket vs. Daily Basket: In India, the online grocer BigBasket sent a cease-and-desist letter to Daily Basket, demanding it change its name and surrender related domain names. Although operating in slightly different market segments, the threat of litigation led Daily Basket to mediation at a considerable cost.
- Steve Madden vs. Adidas: In a role reversal, Steve Madden preemptively sued Adidas seeking a ruling that its two-stripe shoes did not infringe on Adidas’ three-stripe trademark. Although both are large companies, this case demonstrates the aggressive enforcement stance adopted by major brands.
Legal Considerations
- Cease-and-Desist Letters as the First Step: These letters are typically the initial measure to alert the alleged infringer and demand compliance. Ignoring them may lead to further legal action.
- Escalation to Litigation: If a cease-and-desist is ignored, companies may seek injunctions or initiate lawsuits, seeking both the cessation of infringing activity and potentially damages.
- Trademark Bullying: Large companies sometimes use these legal mechanisms to bully or intimidate smaller competitors into abandoning their branding. This can create a chilling effect on competition and innovation.
- Costs and Consequences for Small Businesses: Defending against such legal claims can be financially devastating for small businesses, often forcing them to settle or rebrand even when infringement is weak or non-existent.
- Platform Involvement: In cases involving online or social media misuse, platforms may remove infringing content upon complaint, but ambiguous or borderline cases may still require court intervention.
These cases collectively highlight the power dynamics in trademark disputes and the legal and financial risks small businesses face when challenged by larger companies, even when claims may be questionable.
Small businesses often require community aid and financial support to protect themselves from business disputes with large, financially powerful corporations, as evident in cases like Broccodile and Selva Negra Spirits. Research and development for innovative intellectual property rights and strategies can help small businesses defend their brands against trademark infringement accusations and bullying tactics from larger companies. In pursuit of justice and fairness, research and development in this area could provide crucial resources for small businesses, ensuring a level playing field in the face of trademark challenges.
