Too famous to copy? Reputation-based objections and trademark rights
Sometimes a brand name is a legal weapon in itself. Good examples include Coca-Cola, Tesla, and Apple. These brand names are not just products, they have value and market power in their own right.
But what can a global brand owner do if someone in a completely different industry tries to trademark a similar mark to their name? If the brand name is well known enough, trademark law allows action even if the product range is completely different.
Explore what you need to know about reputation-based objections. In this article, we explain how this works in more detail.
What does reputation mean in trademark law?
Normally, trademarks are protected for the class of goods or services for which they are registered. For example, suppose a company markets clothing products under a certain name. In that case, others may be entitled to use the same name - e.g. for software or agricultural implements - provided there is no deception or infringement.
However, ‘“reputation’” can override this fundamental rule. According to the case law, trademarks that are
● widely known to the public,
● have a strong presence on the market,
● and are of almost cultural significance and enjoy special protection.
Article 12(2) of the Hungarian Trademark Act (Act XI of 1997) and the relevant sections of the EU Trademark Regulation (Article 9 of the EUTMR) allow a trademark proprietor to oppose a new trademark application even if it does not relate to the same product or service but is likely to take unfair advantage of, weaken or detract from the reputation of the famous trademark.
To mention a few examples, the following brands have already proven to be well-known in Hungary:
● Herz
● Pick
● Chlorocid
● Enteroseptol
● Trabant
● Dacia
● Coca-Cola
● Mercedes
● Unicum
● Reebok
● Lego
● Wrigley’s
● Dior
● Porsche
● Levi’s
● Barbie
● Hilton
● Mclaren.
Reputation is not automatic, it must be proven
Misconception that if a trademark has been in use for a long time, or is known in a particular market, it automatically has a ‘reputation’. The law is much stricter on this. Famous trademark status is not automatic even if the brand is well known. This must always be supported by concrete evidence.
But what kind of evidence?
Proof that the mark is widely known by the relevant public. This could be the whole population or a specific sector.
It also needs to be shown that the brand has a significant market share, has been present for a long time, and receives regular, prominent exposure in the media or advertising campaigns.
The brand owner must provide quantifiable, credible data. Examples include:
● annual sales figures, market share,
● advertising expenditure, campaign documentation,
● awareness or brand research results,
● press coverage, international awards, or recognition.
Therefore, branding should be done in a legally conscious way, not only from a market perspective. A reputation can only be validated if it has demonstrable substance behind it.
When can a reputation-based objection be used?
The case law distinguishes 3 main categories.
1. Unfair advantage
It occurs when another party takes advantage of the famous trademark's reputation to benefit his product or service, either knowingly or unknowingly. An association in the mind of the consumer with the renowned brand is enough to increase the market attractiveness of the new product.
2. Weakening
Happens when too many similar names appear on the market - even in other industries - and this can gradually blur the distinctive character of a famous trademark. The uniqueness of the brand is damaged, especially if consumers become accustomed to seeing the name on more than one product.
3. Reputation damage
When a product or service with a similar name tarnishes the image of the famous brand. In particular, it occurs when the counterparty offers poor quality, operates in a dubious industry, or creates an association that damages the original brand's prestige.
These arguments can be invoked in trademark opposition proceedings (if the other party has only filed a trademark application), in cancellation proceedings (if the registration has already been made), or in court proceedings if the use causes concrete damage or threat to the famous trademark.
Why is awareness of reputation-based objections worth it?
For famous brand owners, this opportunity is a strategic asset. Reputation-based objections create possibilities for brands to maintain a globally consistent image, even if they have to enter new markets and new industries.
A conscious approach to reputation-based objections:
● Prevent brand erosion
● Limit abusive domain registration or brand riding
● Increase brand value in M&A, franchise, or licensing situations
However, even for start-ups, it's crucial to know that a creative-looking name choice can lead to serious litigation if it comes in the shadow of a famous brand. In Hungary, both HIPO and the courts have the legal framework to protect reputations.