It's Time to Face the Trade Marks (What an X Factor Dispute can Teach Business)

The producers of X Factor revealed at the start of this month that Simco Ltd was withdrawing its application to register a trade mark for the name of girl group Rhythmix. (Simco Ltd is another of Simon Cowell's companies). 

This followed a dispute with a Brighton charity also known as Rhythmix, who work with music to help disadvantaged young people. They had already registered Rhythmix in the class appropriate for education and objected to its use by a band in X Factor.

There are several interesting points that emerge that businesses in all sectors should take note of:

1) The value of a brand in maximizing commercial value. Interesting isn't it that Simco go to the trouble of registering band names as trademarks right at the start. Even though girl bands traditionally are amongst the first acts to leave, Simco leave nothing to chance in ensuring they can maximize the commercial value of the acts.

2) The value of registration to protect your brand. The charity was also alert to the value and importance of its name and had gone to the trouble of registering that. Registration is relatively inexpensive, but if disputes arise puts the registrant in a much stronger position than it otherwise would be. This appears to be a classic example of that principle.

3) When does an infringement occur. Once the charity complained, Simco initially rejected the claim, believing their use of the name was not prevented by this registration. That does not appear to have been an entirely unreasonable conclusion for Simco to have reached. Under s10(1) Trade Marks Act 1984 an infringement occurs if identical use is made of an identical for identical services; but Simco would not be using the mark for educational purposes. The charity could also rely upon s10(2) where a similar mark for a similar service is used; in which case a likelihood of confusion to the public must also be caused for there to be an infringement. Would the public confuse a pop band with a charity?

4) Sometimes David beats Goliath. Despite the relative financial strengths of the parties and the question over how strong the claim was, Simco backed down. Rhythmix became Little Mix. A willingness to defend their position accompanied by an astutely run PR campaign achieved the charities objective - they said: "We are just asking them to stop and think about what they are doing and what impact they are going to have on a charity at such an already really challenging financial time." They used Facebook to harness public opinion, got the issue raised in Parliament and appealed to Simon Cowell personally (and openly), which all worked.

5) Sometimes the smart commercial decision is to back down. The X Factor series was still at an early stage. It was no big deal to change the name and it cost next to nothing. This was a PR battle they were going to lose, even if legally they had grounds to stand firm. And in the long run, just in case a girl group was to win, surely it would be better to have a name genuinely unique in case they become the next Spice Girls?

So businesses should take note of what may otherwise have seemed a story for the gossip pages.

Written by Stewart Vandermark, a Director specialising in Intellectual Property matters.

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