A ‘David vs. Goliath’ battle that recently played out over a bicycle-related name shows the importance of doing your research before adopting a trademark, says Toronto IP lawyer John Simpson.
The case centres around a Canadian war veteran who opened the Cafe Roubaix Bicycle Studio in Cochrane, Alta. last year, naming his business after the French region where the Paris-Roubaix bike race takes place, The Globe and Mail reports.
Specialized Bicycle Components, which owns the trademark on the word Roubaix in Canada, later served the bike shop owner with a notice of trademark infringement. The bike shop owner tells the Globe that he did not check the trademark database when he was starting his business.
According to a report from Bicycle Retailer and Industry News, the U.S. company that licences the Roubaix name to Specialized has since taken issue with the company’s registration of the mark in Canada and says it is going to licence the bike shop owner's use of the trademark.
In cases like this, a licence agreement can make sense for both parties, says Simpson, who adds that the vast majority of trademark infringement disputes are resolved through some sort of settlement.
“It allows the trademark owner to maintain some control over how their trademark is used and prevents their trademark from becoming diluted in the marketplace. And if the defendant is willing to have its use of the trademark supervised to some degree, then a licence agreement lets them keep using it,” he explains.
Simpson adds that a “co-existence” agreement is a more common form of settlement, where each party agrees to some restrictions on their use of, or enforcement of, their trademarks.
The bike shop owner has reportedly received significant support on social media over this issue, which Simpson says will be a factor in how Specialized chooses to handle this case.
“While they have a legitimate interest in protecting their trademark rights, they have to balance that against the negative publicity fueled by social media. It is always going to be the David vs. Goliath, ‘Big U.S. corporation vs. Canadian war vet’ narrative that gets the attention of social media instead of the legal reasons why a trademark owner has to police its rights,” he adds.
From a legal standpoint, Simpson says if a place name is being used as a trademark for wares or services and someone owns a trademark for the place name in association with the same wares or services, it constitutes an infringing use.
But if the place name is being used descriptively, then it is not being used as a trademark.
Ultimately, says Simpson, it is important to check the trademark database before adopting a name.
“Someone may have filed a ‘proposed use’ application to register a trademark – or something very similar – that you wouldn’t discover if your search was limited to marks that are actually being used. There are also thousands of registered trademarks that are not currently being used in commerce but that are still enforceable. Also, you can’t trust a corporate name search – e.g. a NUANS search – because the right to use a business name does not mean you are not infringing someone’s trademark,” he explains.
“Generally speaking, it is going to be a lot more cost-effective to do a proper search – and to secure your own trademark registration – at the beginning than to face an infringement lawsuit down the road, be forced to change your name and lose all the goodwill associated with it,” says Simpson.