As reported in the Telegraph, online fashion retailer ASOS has agreed to pay £20.2m and stop selling own-brand cycling gear in order to settle two long-running trade mark disputes.
On the face of it, this is a pretty high price to pay - and the true cost will be far higher than the headline figures suggest. The six year long dispute involved infringement claims against ASOS in the UK, Germany and the US, and ASOS must have spent a huge amount in legal fees and other professional expenses – not to mention the time of key individuals within the business required to deal with the dispute.
In reality, the long-term implications for ASOS are likely to be relatively limited compared to some who find themselves at the wrong end of a trade mark dispute. At worst you may be forced to completely re-brand, losing much of the goodwill you've generated in the original brand. (The UK courts rejected Swiss cycling clothing brand Assos' attempt to force ASOS to re-brand – but they did try.)
So could (and if so, should) ASOS have avoided the issue? Probably not in this case. However, there are often things you can do to minimise the risk of getting caught up in a trade mark dispute – or at least enable you to assess that risk and decide whether, on balance, it is one worth taking.
These sorts of disputes commonly arise when a new brand is launched, or when an existing brand expands into a new area, industry or sector – as in ASOS' case. In the latter situation, the value of being consistent in your branding (particularly where you've already established a high degree of brand recognition) may make the possibility of a trade mark dispute worth the risk. However, if you're just starting out, or developing a new brand (or sub-brand), you may well be able to avoid a particular risk by identifying it at an early enough stage to simply 'choose a different brand'.
In either case, taking steps to identify risks before fixing your plans for the brand launch or expansion will be really important - in most cases, this is done by engaging someone to carry out a trade mark clearance search. Yes, there is a cost involved (and it won't give you a cast-iron guarantee that there's absolutely no risk), but if it does identify an issue and help you to avoid a far more costly dispute further down the line then it will undoubtedly be money well spent.
If you are unlucky enough to find yourself on the receiving end of a trade mark dispute – whether an opposition to an application to register your brand as a trade mark, or an infringement claim – then the priority will be to manage and resolve the dispute in a way that minimises the cost and wider impact on your business. Co-existence arrangements, like ASOS' agreement to stop selling own-brand cycling kit, are often a useful compromise and can be helpful in resolving a dispute by alleviating the key concerns that gave rise to it in the first place without the nuclear option of a full re-brand.
If you would like any more advice on trade mark disputes, clearance searches or co-existence agreements, please get in touch.
Asos, the online fashion marketplace, has paid £20.2m to end trademark disputes with the Swiss cycling clothing firm Assos, and German menswear retailer Anson’s Herrenhaus, which both took their name-fellow to court over the similar brand names. Asos’ chief executive Nick Beighton said the payouts, which draw a line under six years of infringement claims in countries including the UK, US and Germany, was the “right commercial decision” as he struck global final settlements with both firms.