How Much Can Trademark Infringement Cost You?

There are obvious aspects to a trademark infringement case that can damage a company — the loss of a brand, accompanying loss of sales, delays in getting your product back out into the marketplace, and the oftentimes significant cost of a re-brand. However, there are other satellite issues that can arise, and they can take the price of getting it wrong to dizzy new heights. Factors such as negative publicity in a social media world and legal fees can carry a heavy price tag.

In May of this year, a notable trademark infringement case in Ireland underlined that point. Nualtra Ltd, a nutritional supplement company based in the Irish Midlands city of Limerick, launched a nutritional supplement drink called NUTRIPLEN and sought an EU trademark registration for such. Two other associated EU registrations were sought for NUTRIPLEN SMOOTHIE and NUTRIPLEN PROTEIN. All three applications are now invalid.

These attempted registrations were challenged by Nutrimedical BV, owners of an existing EU registration NUTRIPLETE (licensed and assigned to Aymes International in the UK) also a nutritional supplement drink but one marketed directly to medical professionals rather than the general public. The goods and services description includes the phrase “the aforesaid goods for use under medical supervision”. At the onset of proceedings, Nualtra Ltd selected a new name of ALTRAPLEN and rebranded their products including ALTRAPLEN COMPACT and ALTRAPLEN PROTEIN.

The discovery hearing in May 2016 brought to light some unsettling issues on the part of one of the plaintiffs prompting Mr. Justice Max Barrett in delivering his judgment to write “Our courts may be temples of truth, but few within them are saints”. These issues were settled with a payment to Nualtra Ltd of €101,000 and payment of associated legal costs. A July 2016 application to remove the remaining matters from the commercial lists was refused by Mr Justice Brian J. McGovern.

The final judgment on the infringement matters was delivered by Mr. Justice Twomey on 2nd May 2017. He noted that no actual losses had been demonstrated by the plaintiffs. Instead, they relied on evidence providing a valuation of the license fee that would have been imposed if Nualtra Ltd were to have obtained a license to use the trademark NUTRIPLETE for the time period. The figure supplied was in the order of €260,000. Nualtra Ltd supplied evidence to show that no profits had been acquired from the use of the NUTRIPLEN mark during the period and judgment was delivered that €35,000 was an appropriate sum to award to the plaintiffs.

However, the issue of the legal fees involved in the various actions brought the dangers of infringement into sharp relief. In his judgment, Mr. Justice Twomey wrote, “There does seem to this Court something perverse about the fact that a damages claim by the plaintiff for a maximum of €260,000, which has led to an award of €35,000 in damages, could cost over €2 million in legal fees and almost put the defendant company out of business and which could have led to the loss of jobs.”

He did mention some hope for trademark owners (and indeed all civil litigants) regarding legal fees in referencing the “Review of Civil Litigation Costs: Final Report” by Lord Justice Jackson in the UK. The review recommends the introduction of providing limitations and caps on legal actions and associated fees to prevent financial issues impeding access to justice or disproportionate fees to an action causing irreparable harm.

Final Thoughts

While these developments may be some time in the future and have distinctly different time frames and arrangements in different jurisdictions, the discussions around these developments are reason for optimism.

In the interim, with increasing globalization and increasing volumes of trademark registrations creating more trademark issues than before, running comprehensive clearance on your trademark candidates is more important than ever!

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DISCLAIMERS:

*This is an informational opinion article of the author. The views and opinions expressed in this article are those of the author and do not necessarily represent official policy or positions of Corsearch or its clients.

*The above trademarks and logos are not affiliated with or owned by Corsearch, and are used for illustrative purposes only as public record from the respective Trademark Offices.

*The above-mentioned brands are noted for factual reporting purposes only, the listing of the brands does not imply any relationship with Corsearch or its related entities.