Use of third party brands: dos and don'ts in social media and advertising

Social media marketing is a powerful resource for brands, but the line between what is private and personal and what is commercial is becoming increasingly blurred. This article gives an overview of the rights under registered trademark law, passing off and advertising regulations that brand owners can enforce if a third party is using their brand without permission in advertising, and also outlines some advice for third parties looking to feature brands in their own communications.

Advertising relies on a number of key elements. Brand or product names, logos, slogans, distinctive packaging and get up, domain names and other signs frequently appear in marketing collateral. An issue arises when that content is being used without permission as such use could give rise to liability under trademark law or passing off. It could also fall foul of advertising regulations.

It is, therefore, crucially important for brand owners to be aware of the legal landscape and to understand how they can enforce their rights or reduce their risk if they wish to use a third party's brand in their advertising.

Introduction

The rise of Instagram and other social media (and influencers on those platforms) has contributed to the blurring between what is private and personal and what is commercial.

It can be especially challenging to differentiate when an individual posts both personal and commercial content to the same social media account. This issue was highlighted last summer when designer Philip Plein posted a cease and desist letter he had received from Ferrari's lawyers to his Instagram account. The letter was in response to a post Mr Plein had published, which featured his brand's trainers on the hood of his personal Ferrari. Ferrari complained that Mr Plein was using its brand for promotional purposes and the post was damaging to its reputation.

Given the current circumstances, where more and more content is being created at home and engagement is increasing, it may be that we see further examples of brand conflict in action.

What legal rights might be relevant for a brand owner?

Trademarks

• DO check whether you have a registered trademark. If so, you have an exclusive right to prevent third parties using:
  1. a mark that is identical with your trademark in relation to identical goods and services; and
  2. a mark that is identical or similar with your trademark in relation to identical or similar goods and services where there is a likelihood of confusion.
• DO NOT forget that if your trademark has a reputation, you can prevent third parties from using a mark that is identical or similar to your mark for any goods and services, where such use of the mark takes unfair advantage of, or is detrimental to, the distinctive character or the repute of your trademark.

Some practical points to consider:

• DO consider whether the third party is "using" the mark - under the Trade Marks Act 1994, use of your mark in advertising constitutes "use". For traditional adverts this is clear, but if your issue is with a post on social media you may need to consider whether it is an advert and would constitute use, or whether it is a personal (i.e. non-commercial) post.
• DO consider if there is a likelihood of confusion - some things to think about include:
  • How similar are the goods/services, is there a link?
  • Is there a likelihood that the average consumer would be confused into thinking there is a link between the infringing party and your brand?
  • How long has the other side been using the mark? Where two parties have co-existed for a long period, honestly using the same or closely similar names, the inevitable confusion may have to be tolerated.
• If you are a well-known brand DO consider whether the mark is known by a significant part of the relevant UK public - this will help to prove reputation. Things like market share, geographical spread, duration of use and investment should be kept in mind.
• If you believe you have met the threshold required for reputation, DO consider whether you can show the third party's use of the mark gives rise to damage:
  • Unfair advantage: are they riding on your coattails?
  • Detriment to distinctive character: is it harming your brand's ability to distinguish itself?
  • Detriment to reputation: is the reputation of your brand being harmed by the association?

Passing Off

• DO consider whether you have an action in passing off - if you do not have a registered trademark, you may be able to rely on the law of passing off in the UK. This claim can also be raised in addition to complaints of trademark infringement. In either case, you will need to show goodwill, misrepresentation and damage.
• DO assess whether you have sufficient goodwill. Goodwill is known as the "attractive force which brings in custom",[1] so things like how long you have been using the brand, and for what goods and services, will be relevant.
• DO think about what misrepresentation has occurred: you will need to show that a substantial part of the relevant public are likely to be deceived. For example, do the adverts amount to a false endorsement - e.g. are the public likely to believe you have endorsed the third party products or services?
• DO show a real likelihood of damage: for example, reputational damage or lost licensing opportunities.
• DO NOT forget that (unlike trademarks) passing off will not give you exclusivity in the use of a brand name, regardless of the wider context in which it is used.

Advertising

Your brand might be included in a third party's advertising in an unintended manner and with innocuous effect. However, sometimes the use of your brand name and/or logo is deliberate. A third party might be seeking to take advantage of your brand's reputation. A competitor may be using your brand name in comparative advertising or even ambush marketing. We also see influencers tagging brands they are not working with in order to increase their own profile and following.

Along with any rights to take action for trademark infringement and/or passing off, a brand owner may have the option of pursuing a complaint for breach of the UK advertising codes - the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code) and the UK Code of Broadcast Marketing (BCAP Code). For example, the CAP Code includes rules on discrediting or denigrating and unfair advantage-taking and on comparative advertising. In addition, brands should be aware of the underlying legal requirements under the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and Business Protection from Misleading Marketing Regulations 2008 (BPRs) when it comes to misleading and comparative advertising. Here are some things for brand owners to keep in mind.

• DO first check that the use of your brand is in advertising and not, for example, in a personal post.
• DO think carefully about how your brand or mark is being used by the third party. Your brand might find its way into advertising relatively easily - it is not always deliberate and could be incidental. For example, has a video been shot in a street where one of your stores is located, incidentally including your brand name or logo? Or, are you the manufacturer of a sound system, which appears as part of the interior of a car? It may also be that your brand is used in a general message of support, without implying an official relationship. The action you take may be different if your brand is used in an incidental way and not, for example, as part of a comparative advertising claim. It will also depend on any commercial relationship you have with the advertiser.
• DO consider whether the advertisement is likely to mislead consumers or create confusion, denigrates or takes unfair advantage of your brand or is promoting an imitation product.
• DO also check whether your trademark is being used in comparative advertising. If the other party has not complied with the requirements for comparative advertising set out, in the UK, in the Business Protection from Misleading Marketing Regulations, then use of your trademark could amount to infringement.

Practical steps for brand owners

It is a difficult decision for the brand owner: on one hand there is the old adage "all publicity is good publicity" but what can you do if someone is using your brand and you want to stop it?

It may be that the use does not reflect your brand values or it is harming licensing arrangements (existing or prospective). Alternatively, it may simply be that you have built up your brand's goodwill, and you consider it is unfair for someone else to dilute or tarnish its value.

• DO consider the following questions before sending a cease and desist letter to the infringing third party:
  • Has someone else in the business allowed this use? You can save some heartache and possibly negative PR (and costs!) by first checking internally.
  • Is it bad thing? Your brand may be receiving free and positive publicity and a boosted profile from being in the public eye.
  • How far are you willing to go? If the third party does not comply, are you prepared to litigate to stop them?
  • How urgent is it? Is an injunction appropriate?

We have seen that brand owners are starting to flex their muscles in this area - an example in the public domain being the dispute between Ferrari and Mr Plein mentioned above. When Mr Plein posted a picture of the cease and desist letter he received from Ferrari's lawyers to his Instagram page, he described it as "blackmail", therefore:

• DO bear in mind that any correspondence you exchange with the third party may be posted on social media.
• DO NOT underestimate the PR impact this may have on your brand, especially if you are a much bigger organisation or have a particular tone of voice. For example, Hugo Boss is facing a highly publicised protest led by comedian Joe Lycett following its cease and desist letters sent to small business and charities using the word "boss" in their names.
• DO seek advice on getting the tone right. You are perfectly entitled to protect and enforce your rights but the language chosen for use in communications can affect your own brand's image, so choose language that reflects the image you wish to convey as well as conveying the legal message.

What should you do if your brand is being used by a third party in advertising?

• DO take steps to protect your brand and minimise potential brand damage (including sending a cease and desist letter letter or submitting an advertising complaint, where appropriate), bearing the above in mind.
• If you wish to put in a complaint to the Advertising Standards Authority, DO make sure you follow the process for competitor complaints and first engage with the brand directly before lodging a complaint. If the complaint is upheld, the ASA will likely prevent the third party from running the ad in the same form again.
• DO seek advice on whether other enforcement measures or options for action may be available.

Practical steps before including a third party's brand in your online activity

What should you do if you are considering including a third party's brand in your own advertising, social media or other online activity?

There will always be some level of risk when using another party's brand. This is particularly so if you are using a registered trademark in your advertising.

We have set out some of the considerations to be kept in mind, including ways in which you may be able to decrease the potential risk of an action or complaint or support a defence against infringement:

• DO consider whether you really need to include the third party's brand. Of course, if you are planning a comparative advertising campaign, then you will want to include the third party's brand or, at least, a clear reference to the third party, so the audience understands the comparison. You may choose though to refer to "the leading competitor" or similar, rather than to use a trademark (avoiding the risk of trademark infringement proceedings). If the third party's trademark is not integral to the campaign - it just appears incidentally - then it will usually be preferable to obscure the mark or shoot the content in a way which means it does not appear in the first place.
• DO consider first asking for permission (unless you are using the third party's brand as part of a lawful comparative advertising campaign). If the brand agrees to your proposed use, you can be relatively comfortable that it is unlikely to try to prevent you from using it in that way, and may well be estopped from doing so.
• DO consider whose mark/brand you are looking to use: some brands are known for being particularly litigious and will seek to enforce their rights. If the brand has a large cross-licensing business then it is likely they will be quick to enforce their rights.
• DO NOT be complacent. Just because you do not hear about infringement proceedings arising from advertising regularly does not mean that brands will not move against you.
• DO check for any registered trademarks. As noted above, trademark owners are given significant protection. If there are registered trademarks, can you avoid including these in the advert?
• DO think about the positioning and size of the registered trademark (i.e. can you use a specific image of a product or position the product in such a way to avoid showing the trademark?).
• DO make it clear that this is your advertisement.
• DO distinguish yourself from the third party, e.g. clearly include your own logo in a more prominent position (and larger) than the third party's trademark.
• DO try to keep any use of the third party's trademark generic and descriptive where possible.
• DO consider whether there is a commercial need to refer to a third party's brand. Is your use informative to convey a true message to consumers? Are you a retailer identifying products that you have the right to sell? You can refer to a trademark where it is necessary to do so to indicate the purpose of a product or service providing such use is honest (e.g. is your coffee machine compatible with Nespresso® pods?).
• DO avoid using logos, stylised fonts, branding or get-up associated with an existing brand.
• DO NOT include the trademark in a way that is bigger than necessary, or multiple times.
• DO NOT make bad associations. While it is no guarantee, making good associations may reduce the risk of a detriment to reputation and/or action from the other brand. It would also reduce the potential damage caused to the brand owner. However, regardless of your intent the brand owner may not agree that the association is positive and may still take issue.
• DO NOT discredit or denigrate another product or service, brand, trademark, trade name or other distinguishing mark.
• DO include multiple products from a variety of brands; a focus on one brand will only make the use more obvious.
• DO NOT create any confusion between your brand and the third party's brand.
• DO NOT make any suggestion of a link between yourself and the third party's brand or take unfair advantage of the reputation enjoyed by the other brand.
• DO NOT mislead consumers about who manufacturers a product or delivers a service or present a product or service as an imitation or replica of an existing product or service protected by a trademark.
• DO think carefully before making any comparative advertising claims, if that is the reason for referring to another brand's trademark. This can be a difficult area, and you must ensure that you meet all of the requirements for comparative advertising in order for it to be lawful.
• DO first undertake a risk assessment - comparative claims tend to be closely monitored and acted upon.
• DO NOT forget that it will be a defence to trademark infringement if the conditions for comparative advertising are met.
• DO also consider the timing of your use of the other brand's trademark. A competitor may be more likely to act against you if you disrupt a planned campaign or product/service launch.
• DO NOT mislead consumers e.g. as to whether your products are endorsed by or associated with a third party.
• DO be aware that a complaint could be made to the ASA about your advertising. Upheld complaints are often accompanied by negative PR and you will be required to remove the advertisement(s) and prohibited from using it again, which may have cost implications (e.g. the costs of taking down ads and replacing them, wasted costs and opportunities, etc).
• DO consider whether including a disclaimer identifying the brand owner may be appropriate.

Conclusion

There is no clear-cut answer when it comes to the use of third party brands. The vast amount of content included on social media has increased the need for both brand owners (looking to protect their reputation) and third parties (featuring brands on their social media) to consider their respective rights and obligations carefully and to be pragmatic.

One thing is certain: the Ferrari and Philipp Plein spat is unlikely to be the last of its sort.

If you are a looking for further advice on how to protect your brand or on the risks associated with social media content or other advertising activity, please contact Kate Swaine, Dan Smith, Kate Hawkins or Zoe Pearman.

We recently strengthened our global IP team with the appointment of specialist IP counsel Ivy Liang in our Guangzhou office. Find out more here.

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