Having worked hard to establish the reputation of your product, there is nothing more annoying than a competitor marketing rival goods under a confusingly similar name. As a High Court ruling showed, however, registering a trade mark is a highly effective means of defending yourself against such conduct.
A company designed, manufactured and sold a range of high-visibility goods for use by equestrians which were branded with the word 'Mercury'. Its sole director swiftly complained after a competitor company began marketing hi-vis equestrian products the labelling of which included the same word.
After the company registered 'Mercury' as a trade mark, the competitor undertook a voluntary rebranding process, aiming to reduce and then cease its use of the word in connection with its products. Some infringing use continued, however, and the company launched proceedings.
Following a trial, a judge found the competitor liable both for infringing the company's trade mark and for passing off. An injunction was issued restraining the competitor from engaging in any further acts of infringement. The company elected to have its compensation assessed on the basis of the profits that the competitor had made from selling infringing goods.
Ruling on the matter, the Court found that the competitor had made a gross profit of £24,356 on selling goods bearing the Mercury mark. After deduction of overheads, the net profit figure came to £20,947. A further deduction was also made because the use of Mercury labels was not the sole factor driving the sale of the infringing goods. The company was awarded £12,568 in damages, plus interest.