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European IPR Helpdesk

Case Study
Developing a trade mark strategy when going
international

September 2017

Company details

Name: Anonymous

SME

Software applications

1. Background
A Croatian SME dealing with facility management, interior design and software
development for related services has been present in the market since 2010.

With a small team of three employees, the company has managed to position itself
as a reliable provider of high level and efficient software services for their clients.
Their presence in the domestic market is solid with a potential for growth in
international markets.

2. Problem faced
The company had been active in the Croatian market with its own (unregistered)
trade mark long before having started to look for opportunities abroad. After taking
the decision of going international, the company then sought advice1 on the
possible steps to be followed in terms of IP protection when expanding the business
to international markets. It was then that the company knocked on the European
IPR Helpdesk Ambassadors2 door in Croatia to get support on IP issues.

1
To learn more about the steps to follow in order to obtain IP protection when going international, please check
the European IPR Helpdesk fact sheet Intellectual property relevance in internationalisation here.
2
Click here to see the team of European IPR Helpdesk Ambassadors to find the contact in your country.
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The European IPR Helpdesks Ambassador helped the company to identify the
products and services in relation to which the trade mark was being used as well
as the classes according to the Nice Classification3, being a necessary step in
completing a trade mark application.

The next step consisted of conducting a trade mark search4 based on the identified
goods and services. At this stage, an issue arose: the results showed that although
the Croatian SMEs trade mark was available in Croatia, it was already registered
as a European Union trade mark (EUTM, previously known as Community Trade
Mark) for the same/similar products and services by a large electrical appliance
manufacturer. Indeed, the problem was more complex than it seemed because at
that time Croatia was six months away from becoming a European Union Member
State, when all the European Union trade marks, including this large
manufacturers trade mark, would become valid in Croatia.

According to the EUTM Regulations, when a new country joins the EU, the EUTMs
automatically extend to that country and the third parties rights in the accession
country in this case Croatia - that pre-date the accession date are maintained
and can be held against the use of the EUTMs in that country but cannot be relied
upon to invalidate the EUTMs5.

This could have turned out to be a critical issue for the Croatian SME if they
continued to use their trade mark without a registration, as it could become an
infringer once the large companys trade mark became valid in Croatia after its
accession to the EU.

3. Possible actions and the outcome

The SME had three possible options to follow:

(1) Finding another trade mark in order to avoid a potential infringement.

However, this could mean new investments both in time and money,
which might not be easy for an SME.
(2) Taking no steps regarding the registration while continuing to use the
unregistered trade mark. However, this could make the SME an infringer,
when the large company enters the Croatian market. In addition, the
SME would need to prove earlier rights without having a registered right
(e.g. on the grounds of genuine use, etc.) to challenge the large
companys trade mark, which might create a huge financial burden.

3
The Nice Classification is an international system of classifying goods and services for registration of trade
marks. The current version consists of 45 classes with more than 10,000 goods and services.
4
Please check the European IPR Helpdesk fact sheet on How to search for trade marks available here for more
information on trade mark searches.
5
Article 165 of the EUTM Regulations

2
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(3) Filing a trade mark application as soon as possible. This would allow both
trade marks to co-exist in the Croatian market. Besides, this would make
it easier to eventually claim earlier rights in order to stop the large
company from using its trade mark in Croatia.

After having discussed the matter with the European IPR Helpdesk Ambassador
and having received specialised support from IP professionals6, the Croatian SME
decided to follow the registration route at least to co-exist with the large company
in the Croatian market and to have a registered right in order to strengthen the
SMEs possible future prior rights claims.

For the other EU countries, since this trade mark has already been registered by
the large company, the SME has decided to develop and register7 a different trade
mark for the EU market in order not to face any further conflicts with the large
company.

4. Lessons learned and suggestions

Getting the right information at the right time is of the utmost importance to all
SMEs working in the open market. Considering all alternatives and taking all
measures in a timely manner help companies to identify potential threats and
opportunities, especially in taking a decision regarding international expansion.

Once again, this case study shows that before taking any further steps in
marketing and brand communication, conducting a trade mark search (together
with other IP searches) with professional help is always suggested. Prior to this
search, the goods and services in relation to which the trade mark is to be used as
well as the target markets should be identified. For this reason, it is essential to
develop an IP strategy integrated with the companys business strategy.

It should also be kept in mind that IP is an indispensable element for businesses.

Following the right steps can lead to market leadership while failing to do so may
cause irremediable consequences. Therefore, understanding the significance of IP
at an early stage is key for sustainable success.

6
The European IPR Helpdesk has published a guide on 10 steps to find a suitable IP professional to provide
support on how to find an IP professional that matches your needs.
7
For practical information regarding international registration of trade marks, check our IPR Charts on EU Trade
Marks and International Trade Marks (Madrid System)

3
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Fax: +352 25 22 33 334 istockphoto.com/Dave White

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The European IPR Helpdesk project receives funding from the European Unions Horizon 2020 research and
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European Union (2017)