Online fashion and beauty retailer Asos, previously
known as As Seen On Screen, is paying over £20 million to
cycle wear manufacturer Assos of Switzerland and German menswear
retailer, Anson's Herrenhaus, to settle ongoing trade mark
disputes between the companies.
From a UK perspective, it might seem surprising that Asos is
making such a payment, which amounts to approximately 30% of the
retailer's latest reported annual continuing profits before tax
and exceptional items, being £63.7 million to 31 August 2016.
In this jurisdiction, just 18 months ago,
Asos successfully defended an infringement action brought by
The Guardian reports, however, that Asos was also dealing with
cases in the US, Germany and France. The settlement is a full,
final and global one covering all outstanding litigation and trade
mark registry actions.
The Telegraph reports other details from the settlement. Asos
will be entitled to sell Asos-branded sportswear, although not
cycle wear. The Guardian adds that Asos will not be allowed to open
shops in Germany. This may not be much of a limitation in practice:
to date, Asos' physical store presence has been very limited,
for example in Australia in 2012 the retailer launched pop up
stores to promote a country-specific range. Being able to sell
own-brand sportswear, on the other hand, could be valuable. The
sportswear market in the UK alone is valued at around £6
billion a year.
Second, even in the UK, Asos may have felt vulnerable to further
allegations of trade mark infringement, despite the Court of Appeal
judgment in its favour. Asos won the UK action on the basis
of the own name defence, which provides that an EU trade mark owner
cannot prevent a third party from using his own name or address in
the course of trade, provided that he uses them in accordance with
honest practices in industrial or commercial matters.
Since the decision, however, amendments to
the EU Trade Mark Regulation have taken effect. One of the
changes is that companies can no longer benefit from the own name
defence; it is now only available to natural persons. It is an open
question as to how this will affect corporate defendants who have
built up brands in reliance on the defence, prior to the change,
but on the face of it there must have been at least a risk of a
fresh action against Asos now that its defence has fallen away.
It appears that Asos has decided that the certainty that it
could achieve via settlement was worth the significant short-term
financial hit, particularly perhaps with Assos of Switzerland due
any day to launch its first shop in the UK - a flagship
"experience concept" store in central London.
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1.The trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the Community under that trade mark by the proprietor or with his consent.
The UK government has not yet invoked Article 50 of the Treaty on European Union (this is likely to happen by the end of March), and the UK's actual exit from the European Union is at least two years away.
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