Is it ok to acquiesce to a competitor’s trade mark?

Can you lose the right to challenge a competitor’s trade mark simply by doing nothing?

In intellectual property (IP) law, the answer is yes – if you wait too long.

This article explores the legal concept of acquiescence and what it means for your business.

Example case

In the context of IP law, acquiescence refers to a situation where a trade mark owner, or the owner of a prior IP right, loses the right to object to a later trade mark if they allow both marks to coexist for five years without objection.

The English Court of Appeal recently diverged from the established EU case law on this point, with Lord Justice Arnold offering useful clarification on when the five-year period begins.

His judgment in the case of Industrial Cleaning Equipment (Southampton) Ltd v Intelligent Cleaning Equipment Holdings Co Ltd & Anor stated:

“The legislation should be interpreted as meaning that the five-year period starts to run once the proprietor of the earlier trade mark becomes aware of the use of the later trade mark, and the later trade mark is in fact registered, whether or not the proprietor of the earlier trade mark is aware of the registration of the later trade mark.”

Arnold LJ’s interpretation of statutory acquiescence requires only knowledge of use, rather than knowledge of use and registration. His rationalisation is: if the five-year clock only starts when the earlier trade mark owner learns of the later trade mark’s registration, it removes the incentive to check the register, which could be used to delay the time running.

The purpose of the legislation is to penalise trade mark owners who fail to monitor competitors and enforce their IP rights. During that time, the later trade mark may build up goodwill and suffer damage if forced to rebrand or lose its own trade mark protection.

Arnold LJ also clarified what counts as sufficient action by the earlier trade mark owner to stop the timer running. Sending a warning letter to the later mark owner isn’t enough, unless it’s followed by a court or administrative Intellectual Property Office (IPO) action within a reasonable time frame. If those steps are taken, the date of the warning letter marks the point at which the timer stops.

Finally, Arnold LJ confirmed that the time rule also applies to passing off claims. If the defence of acquiescence applies, it prevents the earlier trade mark owner from bringing claims under both trade mark infringement and passing off.

So, is it ok?

No. If you become aware of a competitor or another company using a name, logo or phrase similar to yours, act quickly.

Firstly, seek advice on whether infringement has occurred. If yes, take steps to enforce your rights. You have five years from the date of the discovery to begin court proceedings or take administrative action with the IPO – but if you’re already approaching the deadline and the court finds your action wasn’t initiated within a reasonable timeframe, you may lose the right to enforce.

The consequence could be serious for your brand and detrimental to the future success of your business, so it’s not worth risking a delay in action.