The Cost of Defending an Unregistered Brand

A business can spend decades building a name, only to face a demand to stop using it after someone else registers it as a trade mark. Earlier use may provide rights on which the business can rely, but proving and defending those rights can involve substantial work and expense. The experience of Kyta Industries illustrates the consequences of leaving registration unresolved as a brand grows.

Kyta Industries operates in the retail pricing, merchandising and product display solutions sector. Over more than 25 years, it built substantial goodwill and brand recognition through its services and customer relationships. During that time, however, it had not registered the KYTA trade mark.

A third party subsequently applied for and obtained registration of the mark, then instituted proceedings alleging infringement and demanding that Kyta stop using the name. Kyta disputes the claim and is defending its continued use of the brand. The proceedings remain ongoing.

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The rights behind the dispute

The registered proprietor relies on the rights arising from registration under the Trade Marks Act. Registration does not, however, automatically extinguish earlier rights. Section 36 preserves certain rights acquired through continuous, good-faith prior use. Whether that protection applies depends on the relevant dates and evidence of use in relation to the goods or services concerned.

Kyta also challenges the registration on the basis that the application was made in bad faith. The Act provides for the removal of registrations on that ground, but bad faith must be established. Kyta’s allegation must therefore be assessed against the evidence in the proceedings.

The company also seeks to rely on passing off. This concerns misleading representations that one business, its goods or services are those of, or connected with, another. A claimant must establish a relevant reputation, a misrepresentation and resulting or likely damage. Evidence of reputation is therefore an essential part of the case, rather than the complete test.

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The work involved in proving an established reputation

A business may be well known to its customers yet still have to assemble detailed evidence showing the extent of its reputation at the relevant time. Historical invoices and sales figures can help establish the scale and duration of trading. Advertising, marketing expenditure and media coverage may show how the brand reached its market, while evidence from customers and others in the trade can help demonstrate recognition.

Collecting that material may require a business to retrieve records from older systems, locate former employees or suppliers, and explain changes in its branding over time. For a business facing such a dispute, the practical burden can extend beyond legal fees to management time and uncertainty over the continued use of a commercially important name.

Kyta’s case illustrates the work that can become necessary when a business must defend a brand it has spent years developing. The availability of arguments based on prior use and reputation does not remove the expense of substantiating them.

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Reviewing protection as the business grows

For business owners, the practical starting point is to establish what protection exists for the names and brands they use. Registering a company or a domain name does not amount to registering a trade mark, and the distinction can be overlooked when a business is being established.

A review should consider which marks are registered, who owns them and whether the goods or services covered still reflect the business’s activities. Growth into new product lines, an acquisition or a rebrand may justify revisiting the position. Keeping dated records of brand use and marketing activity can also make relevant evidence easier to locate if a challenge arises.

Early advice can help identify gaps and assess appropriate applications before a dispute develops. Registration is not a guarantee against litigation, but securing appropriate protection can put a business in a stronger position to manage and enforce its brand rights.

Barnard assists businesses with trade mark protection and disputes, and provides specialist IP support to law firms on a correspondent basis. Contact the team to discuss the protection of an established brand or a challenge to its continued use.