Trademark Dilution
Some of you might have heard about trademarks and a few of you may have in-depth knowledge of trademarks and other Intellectual Property Rights. For those who are not conversant with the term trademark, it refers to a sign capable of distinguishing goods and services of one brand from another (Section 10(1) of the Nigerian Trademarks Act 1967). Under the Nigerian trademark Act, a mark may consist of “a device, brand, heading, label, ticket, name, signature, word, letter, numeral, or any combination thereof;” while in other jurisdictions, a trademark may include symbols (2 dimensional diagrams), shapes (3 dimensional diagrams), words, numbers, and logos, as well as non-conventional marks such as colours, smells, holograms or sound . Trademarks have to be registered to obtain protection (although unregistered trademarks may be protected albeit to a lesser degree) and can be protected for as long as the registration is renewed.
Perhaps the most recognisable trademark in the beverage industry is the “COCA-COLA” mark. Other examples include the word “MÖET & CHANDON” and the image of a crown, for Champagne (which is actually a geographical indication but more on that in another article) and the word “HENNESSY” with the image of an arm holding an axe for alcoholic beverages excluding beer.
In the fashion industry, symbols such as the Adidas Three stripes, and the Nike Swoosh are famous trademarks as well as Louboutin’s Red Sole on its shoes, Chanel’s interlocked “CC” mark as well as the word “CHANEL”, the Gucci “G”, the Louis Vuitton LV and monogram marks amongst others. There are numerous articles and blog posts on these famous trademarks.
These trademarks act as a source identifier for the goods as well as a quality stamp. Consumers upon seeing a trademark would immediately recall the brand and positive associations (goodwill) they have towards the brand. This makes a trademark a powerful marketing tool. Accordingly, brands, especially famous brands invest in their trademark and as such, it becomes a highly valued commodity. Consequently, it is only reasonable for brand owners to fear trademark dilution, which has the power to destroy all their hard work.
Speaking from a fashion standpoint, brand owners usually initiate intellectual property infringement proceedings relating to:
1. The creation of knockoffs of their designs, and
2. The more harmful counterfeiting of their products.
Although knockoffs and counterfeits are used interchangeably, they do not mean the same thing. A knockoff is a copyright infringement where brand “A” reproduces specific designs of brand “B”. Here it is the style that is copied and the outfit is branded with brand “A's” mark. For example, when a high street brand copies the design of a famous brand for their collection (although it could also be the famous brand doing the copying).
A counterfeit item, however, is a trademark infringement where a brand’s trademark has been affixed on goods not made or endorsed by the said brand. These goods may be in the style of the original brand or a completely different style altogether, what matters here is that the trademark was used. For more on this distinction and a more in-depth discussion of this topic see The Fashion Law blog.
Arguments may be made that knockoffs are not harmful to brands because the customers buying knockoffs are not the same customers who will purchase the authentic merchandise. However, Trademark dilution is truly harmful because it reduces the value of the trademark and negates all the effort being put into protecting and growing its value. The sale and purchase of these counterfeit goods may lead to saturation in the market, which is a problem for most expensive and famous brand who value exclusivity.
Furthermore, it damages a brands goodwill (the positive association consumers have towards the brand, its trademarks, and logos). The consumers in the famous brands market may decide that the brands no longer represents what they stand for and this would lead to loss of market power and a decline in sales for the brand (this was the case with Louis Vuitton and Gucci some years ago when online sellers began offering counterfeit products for sale).
Therefore, what can we learn from this article?
a. For consumers: Do not purchase counterfeit products because by purchasing you encourage them to keep producing and selling these items. Always check that the product you are purchasing is genuine. Most brands now have codes or serial numbers to detect counterfeits.
b. For brands creating knockoffs: Yes imitation is the most sincere form of flattery but please try and create your own designs or take inspiration from other brands but do not copy verbatim, you can be prosecuted for copyright infringement.
c. To Counterfeiters and shops or websites providing a platform for counterfeit goods: STOP! You can be prosecuted and will pay a lot in damages or fines.
d. For Brands: protect and grow your trademarks, as they can be a huge source of value for your brand. Do not take any infringements lightly as little drops of infringements can turn into an ocean-sized litigation.
REFERENCES
The Nigerian Trade Marks Act LFN 2004 < http://www.nigeria-law.org/Trade%20Marks%20Act.htm>
The International Comparative Legal Guide to: Trade Marks 2012 <http://www.banwo-ighodalo.com/assets/resources/d97c515ffb60c25aca27cbef2d427887.pdf>
JUSTIA Trademarks < https://trademarks.justia.com/>
What is Trademark Dilution? <https://www.nolo.com/legal-encyclopedia/what-trademark-dilution.html>
Africa Fashion Law™: Dolce & Gabbana Sues South Africa’s Dolce & Banana Shop for Trademark Dilution < http://ladybrillemag.com/africa-fashion-law-dolce-gabbana-sues-south-africas-dolce-banana-shop-for-trademark-dilution/>
In Response: Is Counterfeiting Actually Good for Fashion <http://www.thefashionlaw.com/home/in-response-is-counterfeiting-actually-good-for-fashion?rq=counterfeits%2C%20knockoffs>
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