How to protect your own brand and business?

Written by JUDr. Lenka Tomanová, LL. M.

You know it for sure, you are starting a business, you are vehement when thinking up your business name, logo and business strategy. You are interested in differentiating yourself from the competition and gaining a wide clientele. You are successfully building your own "brand". However, you will subsequently find that someone uses the same or very similar designation as you, or parasitizes on your reputation or otherwise abuses what you have spent many years and increased finances on to achieve your brand. How can one proceed in such a situation and what can you do? We bring you the solution in a summarized manner, as discussed below.

1. Trademark

The surest way to protect yourself in a competitive environment is to register your brand as a trademark. In such a case, no third party may, in connection with its goods or services, use a sign in connection with its goods or services which is identical with or similar to your trademark in such a way that there is a likelihood of confusion on the part of the public between your goods/services and goods/services of this third party. Simply put, if your company operates, for example, in the field of cosmetic services and you have registered your brand as a trademark for the territory of the Slovak Republic, no other entrepreneur in Slovakia can use the same or similar designation in connection with cosmetic services. Should this nevertheless happen, it is possible to demand in particular:

  • that infringements of or rights to the trademark be prohibited and that the consequences of such interference be remedied (for example, that the sign is not used to designate the goods and services of a competitor);
  • damages, including lost profits (the amount of damage, in this case, is usually determined at least in the amount of remuneration that would be normal for obtaining a license to use the trademark at the time of unauthorized interference with this right, and therefore to determine the amount of damage lustration of licenses in similar cases or determination of remuneration in the established decision-making practice of courts),
  • compensation for non-pecuniary damage in money (in practice it is difficult to determine the appropriate amount of such compensation, while Slovak courts rarely grant such a claim, but this is not excluded),
  • justification or publication of a court judgment at the expense of the person who infringed or endangered the intellectual property right (it is also suitable as prevention to deter other persons from wrongdoing, and in this case, we would recommend exercising this right so that the proceedings are preventive),
  • the issue of unjust enrichment (applies only in specific cases, for example, where a person has acquired a service in place of the proprietor as a result of unauthorized use of a trademark (there has been a change of entity and the person has acquired what belongs to the trademark owner))
  • information on the origin of the infringing goods and the circumstances of their placing on the market (used, for example, if the owner is interested in obtaining more information to be able to quantify the damage or extent of unjust enrichment or to identify the person infringing).

The owner of the trademark is entitled to bring all the claims identified above in court by filing an action, while he is entitled to assert all as well as only some of them. The court fee for filing such action is EUR 99.50, while if the subject of the proceedings were also pecuniary performance (e.g. damages or reasonable satisfaction expressed in money), the court fee is calculated as 6% of the amount applied, but not more than 33,193.50 EUR.

If you are not yet a trademark owner but decide to register a trademark, you need to consider for which territory you will need protection, and therefore to what territorial extent you want to conduct your business. From this, you can subsequently determine whether registration is sufficient only for Slovakia, or the entire European Union, or other individual countries. A lawyer or other intellectual property specialist can help you register, and the cost varies depending on where and under what conditions you want to register the protection.

2. Domain name

The advantage of a trademark is also that it essentially protects the entrepreneur from another person registering a domain of which the trademark would be a part. For example, if we have a registered Slovak trademark "Stentors" for the provision of legal services, but then find out that another legal service provider has registered the domain name, then it is possible to request that the registration of such a domain name be cancelled. Within the Slovak Republic, it is possible to contact SK-NIC, a.s., which is the exclusive registration authority for the .sk top-level domain and which manages the central domain registry. In this regard, it is possible, in addition to the classic court proceedings, to initiate the so-called ADR - an alternative dispute resolution and in it to demand the cancellation of the domain name registration (but not a general refusal to use the domain name, and thus, for example, to prohibit the re-registration of the same domain name after the cancellation of the registration). Initiation of ADR does not prevent the parties from going to court subsequently or in addition to ADR and is rather an institute used in cases where the parties need an expert opinion to resolve the dispute and the dispute only concerns obtaining de-registration ("Self-enforceable decision"). Special rules issued by SK-NIC, a.s. apply to ADR, while the fees for proceedings range from approx. EUR 1,150 higher.

3. Good reputation

Competitive conduct may also undermine your company's reputation by, for example, selling a third party under your brand to poor quality or damaged products, and demonstrating that customers who purchased such products believed that it is a product of your company, or if the competition would slander and denigrate you. When interfering with reputation, courts sometimes (there is no uniform practise yet) require proof of a negative consequence and state that it is not enough to endanger the reputation, so it is advisable to prepare evidence of such negative consequences (e.g. that the number of your customers has decreased), which tends to be quite problematic.

Even in the event of damage to reputation, it is also possible to claim:

  • for the infringer to refrain and eliminate the defective situation,
  • Adequate satisfaction in money (essentially the same as in the case of a trademark, but in this claim, adequate satisfaction is more often attributed, as unjustified damage to reputation is directly linked to non-pecuniary damage and is easier to prove).

Again, the claim can be claimed in court proceedings, with a court fee of EUR 99.50 and, in the case of a pecuniary claim of 6% of the subject matter of the proceedings, a maximum of EUR 33,193.50.

4. Unfair competition

It is also possible to assert claims from unfair competition, as infringers often commit acts that are both unfair competition and thus conduct in the competition that is contrary to the good morals of competition and is capable of causing harm to other competitors (so - called general unfair competition clause).

Such conduct is, for example, also in the case of a misleading description of goods and services which is liable to give rise to a false presumption in economic relations that the goods or services covered come from a particular manufacturer, even though that is not the case.

It is also possible to demand an unfair competition

  • for the infringer to refrain from eliminating the defective situation,
  • damages, including lost profits,
  • publication of the judgment on the costs of the unsuccessful party and, where appropriate, the extent, form, manner of publication and time limit within which the decision is to be published;
  • adequate money satisfaction,
  • issue of unjust enrichment.

It is also true that a claim can be claimed in court proceedings by filing an action, with a court fee of EUR 99.50 and, in the case of a pecuniary claim of 6% of the subject matter of the proceedings, a maximum of EUR 33,193.50.

5. Business name

The sign may also be part of the company's trade name and may therefore be protected as a trade name. Indeed, a business company may not use the business name of another entrepreneur in its activities. In this area, the case-law of the courts in Slovakia is still very strict, which causes some uncertainty in determining the probability of success if court proceedings are initiated.

In any case, in the case of a trade name, it is also possible to claim:

  • for the infringer to refrain from eliminating the defective situation (and thus not to use the trade name in business),
  • damages, including lost profits (unless the amount of compensation can be determined otherwise in the case of a trade name, it will be determined at least in the amount of remuneration that would be normal at the time of unauthorized use of the trade name under the license agreement)
  • publication of the judgment on the costs of the unsuccessful party and, depending on the circumstances, determine the scope, form and manner of publication (as we stated in the case of the trademark, we recommend the claim in question from a precautionary point of view);
  • adequate satisfaction in money (essentially the same as for a trademark),
  • the issue of unjust enrichment (essentially the same as for a trademark).

The claim can be claimed in court proceedings by filing an action, with a court fee of EUR 99.50 and, in the case of a pecuniary claim of 6% of the subject matter of the proceedings, a maximum of EUR 33,193.50.

Summarizing the above, it is clear that the legal order offers entrepreneurs several means of legal protection in case of unauthorized interference with their brand or business, while the above calculation of claims is certainly not final and other means may be used in individual cases, and even criminal institutes. In any case, if such unauthorized conduct of your competition occurs, it is advisable to warn it strongly, and sometimes only a normal challenge is sufficient. If this has no effect, it is possible to consider initiating legal proceedings, but in this case, we recommend that you involve a lawyer who can assess the risks as well as the preliminary costs of litigation.

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