After a small UK company spotted global brand Nike had launched an advertising campaign with a slogan suspiciously close to its own, the business successfully sued the sportswear giant for trademark infringement. Here, Nathanael Young, a senior associate at SA Law, explains how the case was resolved.
The media have recently picked up on the trademark case of Frank Industries PTY Ltd v Nike Retail BV. Frank, a tiny company in the UK, successfully sued the global sportswear giant for trademark infringement, so most articles focused on the David and Goliath aspect of the case.
Not all appreciated how the procedure used by Frank contributed to its success, or how unusually fast the issue had been resolved.
Frank owns a UK and an EU mark for LNDR in relation to clothing, including sportswear. Nike launched a London-based marketing campaign in January this year, featuring Mo Farah and Skepta. It involved heavy use of the initials LDNR, included a popular Youtube video, which it explained as an abbreviation of Londoner. Frank took exception, pointing out the obvious similarity of LDNR and LNDR, and started court proceedings shortly thereafter.
Nike claimed it had made it clear (by using its “swoosh” logo) that it was promoting its own goods, and that consumers would realise that LDNR was a reference to Londoner. Frank, on the other hand, relied on the evidence of witnesses that said it had thought after seeing the campaign that Frank had collaborated with Nike.
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The court decided that enough people would perceive LDNR as a brand name for trademark infringement to have occurred. Frank had been successful, within seven months of the infringing campaign.
The progress of court proceedings is often measured in years rather than months, with delays of seven months not uncommon. While these proceedings had begun with an interim injunction, which truncated the usual pre-action wrangling, it was the procedure followed that enabled Frank to obtain a swift remedy, and helped it successfully take on a company as well-resourced as Nike.
Frank used the Intellectual Property Enterprise Court (IPEC) for its proceedings, a court previously known as the Patents County Court. This court is designed for smaller disputes, involving claims of damages for up to 500, 000, and is justifiably popular with SMEs.
This is for two main reasons. Firstly, there is an emphasis on speedy resolution of proceedings, with a simplified procedure designed to get parties to trial as quickly as possible. For example, applications are generally dealt with in writing rather than at a hearing, and there are strict limits on trial length.
Secondly, while costs can be recovered from an unsuccessful opponent, both at interim application stage and at trial, there are relatively low caps on the amount of costs that can be recovered.
This means that, unlike in normal court proceedings, parties can budget for the risks of losing, and will not face unknown costs risks. It also means that although large corporations and rich individuals can still try and outgun their opponents with teams of expensive lawyers, they will do so at their own expense. It is not so easy to wear their opponents down with expensive and complicated applications, or hope that by obtaining a large enough costs award on an interim application, they can force the other party to settle.
The procedures in IPEC are widely admired; elements of them are currently being trialled in the High Court. For now, however, its particular blend of capped costs and streamlined procedure is unique. As Frank Industries showed, it can prove the ideal environment for SMEs to take on their larger rivals.
Nathanael Young, is senior associate in the commercial litigation & dispute resolution department at SA LawTake a look back at our legal expert’s alternative dispute resolution series: