A couple of weeks ago, to highlight the problem of unprotected business identities amongst start-ups and SMEs, we decided to give away our director’s identity card (doctored copies) at a women entrepreneur’s conference. From the stunned looks on the faces of the delegates who were the beneficiaries of Rebecca’s IC, we think we've made our point - without proper protection, you might as well serve up your business identity on a silver platter with an apple in its mouth. As a matter of fact, the world of start-ups is replete with countless examples of business identity thefts, and start-ups usually get the shorter end of the stick. Here are some heartbreaking case-studies of identity thefts that are exceedingly common the world over…
X was a lovely family-run neighbourhood restaurant, they’ve been around for a couple of years, dishing out home cooked delicacies daily to the delight of their loyal patrons. However, their idyllic existence was to come crashing down when one day, they received a Cease and Desist letter in the post. The sender, attorneys of an international hotel chain, demanded X to immediately cease using their trade mark which was very similar to the trade mark of one of the hotel’s restaurants. Unknown to X, the hotel had also registered the trade mark a year ago in the Malaysia.
Even though X’s trade mark was not registered, being the first to use the trade mark meant that X had the rights to challenge the registration of the hotel’s trade mark and even to prevent its use. However, because the hotel’s mark was already registered, they are now, in the eyes of the law, the rightful owner of its trade mark. The only recourse for X was to bring the hotel to court in order to regain ownership and use of the trade mark. Unfortunately, after weighing the financial and emotional costs that would surely follow the lawsuit, not to mention the time and effort it would take, X decided to simply throw in the towel. They were just not ready to take on the juggernaut and their attorneys. So they ditched their decade-old brand, renamed themselves, and lost a substantial amount of goodwill that their brand had garnered over time.
The Illusive Squatter
Y is a foreign retail chain with presence in several Asian, Middle Eastern and European countries. Before entering into Malaysia, Y had conducted a trade mark search to ensure that there was freedom to operate. 2 weeks later, an application was made to register its trademark. Unfortunately, and unknown to Y, a squatter had also applied for the same trade mark just a week before. Now in Malaysia, when two trade marks that are really similar to each other are filed within a short time of each other, the Trade Mark Registry will not allow either application to proceed until the parties either sort it out themselves or the court is called in to decide on the matter. This was despite Y being able to show itself as the owner of the trade mark in numerous countries and its use of the mark internationally for a number of years.
Not wanting to lose any time in securing its trade mark, Y set out to contact the rogue squatter. However, as it turned out, the squatter could not be located at the address that was provided to the Trade Mark Registry. It took a fair bit of sleuthing before the illusive squatter was finally located and persuaded (under threats of a lawsuit) to withdraw his applications from the Trade Mark Registry. So, although Y had recovered its trademark, what could have been a routine registration took twice as long and cost several thousands more.
The Thieving Neighbours
T is a medicinal oil maker, like his father before him and his father’s father before that. Although T ran a small business and his sales were by no means the talk of town, other traders around him started to ride on his coattails by using trade marks that were very similar to his. This put T in a right old pickle as the customers were confused and some even started to think T was the counterfeiter! He tried talking his neighbours out of their thieving ways but to no avail.
His business’s modest profit meant that there was little he could do. T’s brand has been damaged and diluted. And barring the unlikely event that all his thieving neighbours were to cease using their lookalike trademarks and making a public proclamation that T was in fact the real McCoy, nothing could have saved T’s brand aside from engaging each of them in a costly passing-off suit. Even then, success was not guaranteed as a major flood a couple of years ago had destroyed much of the documentary evidence that T had of his 3rd generation business, leaving T with nothing to prove that his business have used the trade mark for decades. Sadly, T had to give up his decade old brand in order to differentiate his business from his neighbours.
S runs a successful F&B business. Knowing the value of a protected brand, S applied to register his trade mark from the get-go. Not long after the start of his business, he caught wind of a certain restaurant in another area of the country that was using his trade mark. Although slightly perturbed by this new discovery, S was nevertheless sure that the odds are in his favour. His trade mark applications have gone through, which meant that in the eyes of the law, S is now the legal owner of his trade mark.
With that in mind, S reached out to his doppelganger across the land to inform the latter that he had infringed S’s trade mark right. It turned out that the kerfuffle was in fact a genuine mistake, the doppelganger did not know of S’s existence and had come up with the brand independently. So a phone call and a friendly meeting later, the matter was settled amicably without costing much time or effort. Oh happy days!
So which of the above best describes your business? Are you home dry or should we get the cutlery ready for that juicy brand of yours?