The Supreme Importance of Foreign Trademark Registrations
Clients often ask what the benefits are of registering a trademark. There are many benefits to registering a trademark in the United States, but, if a client wants to do business outside the US, registration in those foreign jurisdictions is especially important. Unlike in the US, where the owner of a trademark has rights based on use of the trademark regardless of registration, in many countries trademark rights only accrue with registration. In the modern economy that is global and online, failure to register a trademark in a foreign market could have devastating consequences.
The current problems facing Chapter 4 Corp. represent a worst case scenario. Chapter 4 is the company behind the acclaimed retail fashion/apparel brand SUPREME. You can be forgiven if you have not heard of SUPREME, especially if you are over the age of 30, but it has over 13 million followers on Instagram, fashion platform Lyst crowned it the industry’s most powerful logo in 2018, its T-shirts and hoodies often sell out immediately, and a few years ago it sold a 50% stake in the company to a private equity firm for $500 million. Chapter 4 has been using the SUPREME logo − a red box, with white lettering in a simple but stylized font − since 1994, but it did not get a registration in the US until 2012 and did not file in other jurisdictions until two years after that.
Chapter 4’s delay in registering its trademark allowed another company, IBF, to register for SUPREME on clothing in the UK, Europe, and a number of other countries including China. IBF employs a logo that is effectively identical to Chapter 4’s red box logo and sells many of the same “streetwear” clothing products as Chapter 4. Moreover, IBF is not just selling in the back alleys of the online marketplace; it has opened stores in Spain and announced a partnership with Samsung (which apparently believed it was working with Chapter 4). Chapter 4 is now locked in a costly, contentious, muli-front legal battle in which Chapter 4 believes it is trying to stop a counterfeiter acting in bad faith, while IBF argues that it is the legal owner of the SUPREME trademark in the countries at issue.
Registering SUPREME in Europe and China years ago might not have avoided all the trademark problems for Chapter 4, but it certainly would have put Chapter 4 in better position to promptly stop IBF from its own use of SUPREME on competing goods.