Trademarks – risks and issues with distributors

May 11, 2016, By

Distribution Disasters

In the last year, we’ve noticed a significant rise in the number of clients either looking to register trade marks overseas and then finding they’re ‘blocked’ by trade mark applications filed by their own distributors or clients’ trade mark watching services picking up applications filed by their own distributors.

While, in most cases, the distributors are happy to transfer the applications/registrations to the ‘true’ owner, the cost involved for arranging the transfer can be substantial and could easily have been avoided had the applications been filed in the name of the supplier originally. However, the greater risk is where applications filed by a distributor never come to the supplier’s attention until there’s a dispute or the parties have stopped working together. At this stage, the distributor can blackmail the supplier with the threat of blocking the import/sale of their goods.

Therefore, we recommend that all of our clients who use distributors ensure that: (a) they have appropriate registered trade mark protection in their own name in the jurisdictions where their goods are sold; and (b) have an appropriately drafted distribution agreement which properly sets out the parties’ obligations and rights in respect of trade mark (and other intellectual property) issues.

If you have any distribution or trade mark queries, do give one of our experts a call on 0207 288 6003.

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