David vs. Goliath: Small Business Tangles with Corporate Giants Over Brands
Corporate Squabbles: Oversized Enterprises Threaten Legal Action Against Smaller Competitors - Corporate Giants vs. Small Operators: The Conflict Arising from Major Corporations' Warnings to Smaller Businesses
Yep, you read that right. A minor league David just might be facing down a colossal Goliath over trademarks. Such was the case for Felix Huynh, a 36-year-old entrepreneur based in Mühlacker (Enzkreis), when luxury fashion company Lacoste came kicking and screaming over his startup "Broccodile" and its broccoli-crocodile logo. Huynh couldn't believe it was anything but a joke when he received a cease and desist letter.
Initially, the expected payout for Huynh was over 5,000 euros, and the dispute value was a whopping 500,000 euros. Lacoste demanded the deletion of the "Broccodile" trademark registered with the German Patent and Trademark Office (DPMA), under which Huynh planned to sell T-shirts or cannabis consumption products in an online shop. The resourceful Huynh defied his lawyers' advice, stood his ground, and let the Lacoste-imposed deadline pass. Now, he's concerned a lawsuit might be on the horizon. Lacoste has yet to comment on the matter.
Financial implications can be severe for small businesses under siege by corporate behemoths. Large companies frequently launch legal battles against smaller firms for actual or assumed trademark infringements, according to Jens Klaus Fusbahn, a specialist lawyer for industrial property rights. Such actions are essential in maintaining the integrity and recognition value of well-known brands. However, in some instances, the target may be overzealously pursued.
A different small company was hurt hard by thisness: Stuttgart's Selva Negra Spirits found itself in a bind with liqueur manufacturer Jägermeister. Around three years ago, the young entrepreneurs Sebastian Dresel and Laurin Lehmann were served with a cease and desist letter because their company sold an agave schnapps featuring a deer antler logo. The dispute value was approximately 250,000 euros. Dresel shares that, at the time, the duo often felt they were being bullied by financial strength. Eventually, the Higher Regional Court of Hamburg sided with Selva Negra Spirits—remarking that the simple depiction of a deer or deer-like figure does not automatically constitute a trademark infringement. Despite reimbursement of legal fees, Selva Negra Spirits was left with substantial costs.
Legal disputes often bear significant costs that small companies may find impossible to shoulder. Patent attorney Alexander Bulling, who instructs at the University of Stuttgart, advises that small companies routinely misjudge their legal position and fight needlessly.
Plenty of brand disputes between small and large companies have made headlines in recent years. For example, a Swabian toy company that used a yellow triangle resembling the logo of construction machinery giant Caterpillar on its toy excavators prevailed in a long-standing legal dispute before the Higher Regional Court in Hamburg. Tech titan Apple once took action against a small café in Bonn that featured a child's head in an apple, but later withdrew its objection. And even outdoor equipment supplier Jack Wolfskin backed down in a dispute over alleged trademark infringements with small retailers.
Yet, outcomes vary: In 2015, Lacoste won a case before the EU Court against a Polish company with a logo of a crocodile whose tail bent downward, while Lacoste's is upward. The court deemed the risk of confusion too great.
Fusbahn understands the interests of trademark holders; their significance lies in the protection of not only the goods and services marked but also the brand's reputation and recognition value. Even if the attacked logo bears little resemblance to that of the complaining party, the risk of confusion can still be substantial.
At the DPMA, objections from holders of older trademarks against new trademarks are becoming less common. This improvement is due in part to enhanced search capabilities for registered trademarks and the early settlement of disputes. Out of around 50,000 trademarks registered last year, roughly 2,200 were met with objections.
For now, Huynh languishes in anticipation. After clicking on his website, it ominously reads, "We are coming soon." "Broccodile" remains registered at the DPMA, with the annotation "Opposition procedure pending."
The financial burden on small businesses can be substantial when they face legal battles from corporate giants over perceived trademark infringements, as demonstrated by the case of Selva Negra Spirits who battled liqueur manufacturer Jägermeister. In another instance, a Swabian toy company persistently defended its use of a yellow triangle resembling Caterpillar's logo on toy excavators. Community aid and small-business finance are crucial for these enterprises to navigate such arduous legal hurdles.
