26 October 2023
26 October 2023
A business earns profits once it has developed a brand by which its consumers and clients can distinguish it from other competing brands. A brand can be protected through the trademark it uses to let people know that the product comes from the business that owns the brand.
In this guide, we will look at the rights and obligations of a trademark owner. We will look at what the owner can do to prevent his trademark from being used by others and in which ways the owner can authorize others to use their trademark. For purposes of this guide, a trademark may also refer to a service mark.
A Trademark is a visible sign, logo, figure, or image representing the brand of a product giving the consumers the ability to identify the product. If it pertains to a service, it is called a Service Mark. The ownership of a trademark entails certain rights to protect the brand from being used by others in a confusing or misleading way.
The trademark owner acquires ownership of the same upon its use but its registration before the Intellectual Property Office (IPO) gives the owner a presumptive right over said trademark which means that the law presumes that the owner owns the trademark if it is registered in his name.
Thus, to protect one's ownership over a trademark, it is best to register it before the IPO.
Once the trademark is used by the owner and is registered before the IPO, the law grants the trademark owner the following rights:
The trademark owner has the right to use the trademark to the exclusion of others for the type of goods or services it was registered for. So once it has been registered for a certain type of goods or services, no other person can use the same trademark for the said type of goods or services.
For example, if trademark ABC is a registered trademark for meat products, no other meat product can use the ABC trademark as its brand.
The trademark owner has the right to stop others from using a similar or identical trademark if it might confuse people about the source of the products or services. This is to ensure that customers know they're getting something from the owner of the trademark and not from some other person.
Thus, using the same example above, if the ABC trademark is registered for meat products, and another business owner wants to use the ABC trademark for chicken products, the business owner who wants to sell chicken products will be prohibited by law from using the ABC trademark as it may cause confusion as to the source of the chicken products.
A trademark can also be the subject of a licensing agreement through an Intellectual Property License Agreement, where the trademark owner can allow another person to use the trademark for purposes of obtaining profits without the risk on the part of the trademark owner in losing his ownership over the trademark. This also allows the trademark owner to control how the trademark is used by the other party and manage how profits can be earned through the use of the trademark.
A request can also be made to the trademark owner to allow the use of the trademark for purposes of profits through a Letter Requesting Permission to Use Intellectual Property. With this, the person requesting can prevent himself from being liable for trademark infringement. Infringement is further discussed in the succeeding sections with the available legal remedies.
If another person infringes or uses a trademark without the permission of the trademark owner in a way that harms his business or confuses consumers, this is called trademark infringement and the trademark owner has the right to take legal action against them in a court of law. The legal actions that may be filed are as follows:
An injunction is a remedy that may be availed of in court by the trademark owner to stop the infringer from doing further acts of infringement.
A good measure before filing for an injunction is to send the infringer, a Trademark Infringement Cease and Desist Letter. This letter can serve as evidence that the infringer indeed committed an act of infringement and may stop the infringer from doing further acts of infringement.
This legal action is usually done before a trademark owner can file a civil action or criminal action for trademark infringement in a court of law.
For example, if the owner of the ABC trademark discovers that another business is using the ABC trademark to distribute and sell chicken products, the trademark owner can file for an injunction to stop the other business and prevent it from further committing infringing acts.
After filing for an injunction or if the infringement undeniably caused damage to the trademark owner, the trademark owner can file a civil action to recover from the person (also called "infringer") who committed trademark infringement damages sustained by the infringement, including attorney's fees and litigation costs.
This is a legal action that can be availed of if the trademark owner wants to recover profits that he could have earned if no infringement was committed by the infringer. This remedy can be chosen alongside a criminal action for trademark infringement, but if the trademark owner does not want the infringer to suffer the harsh penalty of imprisonment, then a civil action for infringement can solely be filed before a court of law.
It must be noted that no damages can be recovered for infringing acts committed more than four (4) years from the time the infringement was discovered. Thus, it is important not to sleep on one's rights after knowing that the infringement was committed.
To illustrate, and following the same example, if the owner of the ABC trademark lost potential profits by reason of the sales of chicken products bearing the ABC trademark made by the infringer, then a civil action for infringement may be filed by the trademark owner against the infringer to recover the lost profits within four (4) years from the time the trademark owner discovered the infringing acts committed by the infringer.
A formal criminal complaint for trademark infringement may be filed by the trademark owner against the infringer where the infringer may be punished and be imprisoned for a term of two (2) to five (5) years and may be ordered to pay a fine ranging from Php 50,000 to Php 200,000.
This legal action should be availed of only in cases where the infringer undeniably caused damage to the reputation and business of the trademark owner as a result of the trademark infringement.
If the infringer despite the demands made by the trademark owner to stop the infringer from committing further acts of infringement, a criminal action for infringement may then be filed.
To illustrate, if after sending a Trademark Infringement Cease and Desist Letter and filing for an injunction against the infringer, the infringing acts still continued, then the trademark owner can then file for a criminal action of infringement.
It must be remembered that having a trademark gives the trademark owner certain rights, but he must actively use those rights by actually using the trademark.
Thus, the trademark owner is also obliged to file a declaration of actual use within three (3) years from the time of filing the trademark registration before the IPO.
A declaration of actual use explains how the trademark is used and evidence of how it is used in the market should also be shown before the IPO.
Trademark rights are not permanent. For the trademark owner to exercise the abovementioned rights, he is also required to renew his trademark registration before it expires.
This should be done before a period of ten (10) years from the trademark registration lapses. It's important to maintain the registration of a trademark for the owner to continue enjoying the rights entailed by his ownership over the trademark.
Both obligations should be complied with by the trademark owner, otherwise, he may run the risk of losing his ownership and rights over the trademark.
To summarize, the rights of a trademark owner include the right to use the trademark exclusively and prevent others from using the trademark without the owner's consent, the trademark owner can also avail of legal remedies such as civil or criminal action of infringement to punish the infringer with a claim of damages or imprisonment. Additionally, the infringer can be stopped from committing infringing acts through the legal remedy of injunction.
It must also be remembered that the trademark owner should actually use the trademark and submit a document called a declaration of actual use to establish that he is in fact exercising his rights over the trademark. Further, he must also renew his trademark registration before the expiration of the ten (10) year period.
The owner of a trademark will undeniably be able to enjoy the profits and benefits that trademark ownership entails. But he must also have the knowledge of the need to register the same before the Intellectual Property Office in order to be able to exercise the rights that come with trademark ownership as well as the obligations needed to maintain his ownership over the trademark.