Introduction
Technological and social progress would not have been possible without adequate protection of intellectual property. Various intellectual property rights provide means for creators and inventors from the misuse of their products and illegal distribution. In turn, they are granted the capacity to monetize their intellectual property. Knowing about the related laws and principles is necessary when managing a business. Offering a new product to the market may lead to unfavorable consequences if someone else’s rights are infringed. This paper discusses the major concepts of intellectual property law and how they may be applied to the fictional case of the “High Friend” product.
Theoretical Concepts
Various pieces of law exist to protect specific aspects of intellectual property. Design rights, for instance, are aimed at safeguarding how a product looks. The visual appearance of a product is often a determining factor when a customer is to decide on a purchase. Therefore, protecting this appearance from being used on products from other manufacturers is critical. To be registered, a design must not be identical to what already exists on the market and must not be generic (Beatty, Samuelson, and Sanchez Abril, 2019). For instance, one may not register a sphere as a design of a ball, because all balls have this attribute.
To distinguish between the products of competitors, business owners often register trademarks. Words and signs that are used in combination to make a product or service distinct from other commodities on the market are trademarks. For instance, when one thinks of Coca-Cola, a specific product appears in his or her mind. In this context, Coca-Cola is a trademark that is used to identify this particular product. It is not necessary to register a trademark to be protected under common law. The only requirement is to be able to prove that the person was the first to start using this trademark (Beatty, Samuelson, and Sanchez Abril, 2019). However, registration provides the owner with many benefits, such as new marketing opportunities.
Usually, a design is registered in the form of a design patent. When an owner wants to protect the functional aspects of an invention or creation, a utility patent is needed (Sherwood, 2018). For instance, if a company invents a new type of radar, it may file for a utility patent. There are several requirements for a product to be patentable – it should be unique and novel, and should be functionally useful (What is intellectual property?, 2019). It should be noted that ideas are not patentable unless they are complemented with a tangible prototype (Beatty, Samuelson and Sanchez Abril, 2019). The infringement of a patent is prosecuted by law; therefore, businesses should conduct careful research before offering a new product to the market.
Implications regarding the Lipstick Case
It is not yet evident what parties using the proposed lipstick case may involve. The reason is that it is not clear whether there is already a product with a similar design on the market. Therefore, to determine the potential plaintiffs, research of the market should be conducted. The company needs to observe whether or not using a design with two girls giving a high-five is being employed by other companies. Makeup Jons Letterman Ltd. may need to alter the visual appearance of their lipstick if a similar design is found. Otherwise, legal consequences may follow the decision to use the design that is already on the market.
In the context of the lipstick case, design patent laws are relevant. The company may proceed with the design even if there is a similar product if no application for a patent has been filed. Since 2013, a legal owner of the patent is the one who applies first (Beatty, Samuelson and Sanchez Abril, 2019). Before this change in law, the patent belonged to whoever invented the design first (Beatty, Samuelson, and Sanchez Abril, 2019). For instance, even if there is a company that sells lipsticks with “high-five” designs, priority may be given to Make Up Jons Letterman Ltd. if the former company has failed to file for a patent.
It is critical to consider potential legal issues before selling a product on the market. Patent infringement has legal consequences that may result in a complete loss of revenue generated by a product that is protected by other company’s patents (Beatty, Samuelson, and Sanchez Abril, 2019). For instance, if Make Up Jons Letterman Ltd. starts selling its lipstick and someone else files a lawsuit, the company may need to transfer all of the revenue to the patent’s owner. Furthermore, any court proceeding has associated financial expenditure (Sherwood, 2018). Aside from the revenue recovery, the court may rule that the company pay treble damages, which can be up to three times the amount of revenue generated by the product (Beatty, Samuelson and Sanchez Abril, 2019). To avoid these financial and other costs, such as spoiled image, the company needs to look for any existing patents.
First, the company needs to conduct thorough research on companies that sell lipsticks. In case a similar design is found, the company needs to see whether or not this design was patented. If there is no patent, the company may apply to become the owner of the patent (What is intellectual property?, 2019). However, if the model is already protected, then the company may either license this design or think of a different visual appearance.
Implications in Regard to the Brand Name
Unlike the case of the lipstick design, the issue with the brand name is much simpler because a company with a similar trademark has already been found. Therefore, Makeup Jons Letterman Ltd. may not need to conduct further research and instead concentrate on resolving the issues related to the other brand, which is called “High and friendly!” The proposed name for the lipstick is likely to confuse customers, because “High and friendly!” is a trademark for mascara, which is a cosmetic-like lipstick.
The issue with the brand name falls within the scope of trademark law. Unlike a design patent, trademarks are protected even if they are not registered (Beatty, Samuelson and Sanchez Abril, 2019). Because “High and friendly!” was marketed before “High-friend!”, the former brand receives a higher priority. Makeup Jons Letterman Ltd. would be able to use the brand name they are proposing had “High and friendly!” operated within a different product category. However, both products are a type of cosmetics, and consumers may perceive them as the same brand.
Although “High-friend!” and “High and friendly!” are two distinct names, courts rely on other factors when making a decision. In case a plaintiff is able to prove that “High-friend!” may be falsely associated with “High and friendly!”, then Makeup Jons Letterman Ltd. will be accused of trademark infringement. Such a situation may lead to severe monetary losses – the company may have to reimburse the plaintiff all financial damages, lipsticks may be seized, and a fine may be imposed (What is intellectual property?, 2019). The company will need to search for a different brand name and start its business from scratch.
To avoid complications and legal consequences, the company needs to change its brand name to a different phrase. While “High and friendly!” may not file a lawsuit immediately, all generated revenue will have to be returned to the plaintiff in case they decide to appeal. It is more favorable to prevent such incidents from happening. The only solution, in this case, is to find a unique brand name and register it as a trademark.
Conclusion
Intellectual property laws are designed to protect the rights of creators and inventors. They incentivize the process of creating because businesses and individuals will be able to gain financial benefits from their products. Makeup Jons Letterman Ltd. has to examine whether or not a similar design exists on the market and whether or not it is patented. Regarding “High-friend!”, the company needs to change it to a different brand name because a similar trademark exists on the market. Furthermore, the trademark operates within the same industry the company is planning to enter. Therefore, the most rational decision would be to alter the name entirely.
Reference List
Beatty, J., Samuelson, S. and Sanchez Abril, P. (2019) ‘Introduction to business law’ [PowerPoint presentation]. Business Law. Web.
Sherwood, R.M. (2018) Intellectual property and economic development. New York: Routledge.
What is Intellectual property? (2019) Web.