Despite the lack of time and resources to effectively search and watch all trademarks, the fact remains that infringement is on the rise. A glance at the news headlines certainly reinforces this sentiment; in October 2019 California Wine Company filed a complaint that Applebee’s VAMPIRE cocktail is infringing on its own VAMPIRE trademark. A similar case saw Riot Games sue Riot Squad for trademark infringement, saying Riot Squad was intentionally using Riot’s name to infer a relationship between the two brands to fans.
The research highlights a growing trend in infringement. In 2017, 74% of trademark professionals experienced infringement. This increased to 81% in 2018, and now in the latest research has hit a high of 85%. In just two years, there has been a 15% increase, signaling a definite upward trend.
This increase can also be seen in the number of cases reported by respondents. Nearly four in 10 report they experienced between 1-10 instances of infringement, while 30% experienced between 11-30.
The figures from the 2018 research are in line with the new research, except where respondents reported 31-50 cases; in 2018 7% experienced 31-50 cases, while in 2019 this figure rose to 12%.
This rise is reflected in perception too. More than four in 10 (43%) trademark professionals say they believe infringement has increased over the last two years, while 37% say they believe cases of infringement remained the same during the period. This demonstrates the severity of the threat and the fact that the consequences for brands remain a major issue that they need to contend with.
Additionally, the research highlights that infringement is taking place across channels. Respondents experienced infringement across business name (44%), web domains (44%), social media (38%), online marketplaces (38%), and advertising campaigns (34%).
The cost of infringement
It is not just the number of instances of trademark infringement that organizations face that is concerning, but the overall cost of that abuse. The consequences of infringement are well documented; from loss of customer trust to loss of revenue. Trademark professionals in the research identified four key areas that infringement had an effect on, namely customer confusion, loss of revenue, damage to brand reputation and reduced customer trust and loyalty.
These remain aligned to the 2018 CompuMark research:
However, there are other tangible concerns that organizations experience as a direct result of trademark infringement, all of which affect the four elements listed above. Specifically, 75% have started litigation as a result of infringement. This is a costly avenue and impacts on the wider business in terms of publicity, how customers and the market perceive the brand.
In fact, 47% of respondents say their organization spent up to $50,000 on litigation in their most challenging infringement litigation. Additionally, 40% spent between $50,000 – $249,999. While lawsuits may be settled amicably, such as in the well-publicized case of Burberry versus Target,
or Adidas America versus Skechers USA, it can also lead to more costly conclusions.
Apart from litigation, 46% of trademark professionals say their organization had to change a brand name as a result of infringement. This figure is up significantly from 2018 where 30% had to resort to this measure. Again, changing a brand name has wide-reaching implications,
including cost, reputational damage and customer trust. Depending on where the organization is in launching a new brand, for example, changing the name can be devastating and affects everything from website design and advertising, to packaging and logos. This affects everyone from global brands to local businesses.
A case in point is Sol Kitchen, a coffee and juice bar, that opened in Denver. Soon after opening its doors, the business was sued for trademark infringement by an Arizona-based restaurant operator that said it conflicted with its Sol Cocina brand (cocina meaning kitchen in Spanish). The owners of Sol Kitchen already invested $10,000 in website and logo design but had to rebrand.
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