Why Should I File a Trade Mark in the Cayman Islands?

Many local businesses ask “Why should I file a trade mark in the Cayman Islands?” especially where there has been longstanding use of a mark in the Islands. Whilst unregistered rights acquired through use may be protectable under the common law of passing off, there are several reasons why trade mark protection is always a good idea.

1. Passing off requires evidence of use and evidence preparation can be expensive

Relying on unregistered rights is likely to be more expensive if litigation becomes necessary in order to protect your brand. This is because the owner of the unregistered rights (e.g. an unregistered trade name, logo or get-up) must demonstrate that they own the requisite goodwill through use and demonstrate this through evidence. Evidence preparation can be time consuming and therefore expensive.

On the other hand, the proprietor of a registered trade mark can simply rely on its trade mark registration certificate to prove ownership and the trade mark registration will be presumed valid unless and until the infringer can successfully demonstrate otherwise through arguments.

2. Exclusive rights in the trade mark

 Proprietors of registered Cayman Islands trade marks have the exclusive right to use the mark and registered rights are infringed by third party use of the trade mark in the Islands without the proprietor’s consent. There are some exceptions, but this is the general principle.

3. Trade mark registrations are valid from the date of filing

For those with a new brand idea, but not yet ready to start using the brand, filing a trade mark application prior to first use not only puts a flag in the sand, but it can also be a good way to alert third parties to your rights as trade mark applications are published in the Cayman Islands Gazette, Intellectual Property Edition.

Also, if any third party believes they own earlier rights to an identical/similar mark they may oppose your application based on earlier registered and/or unregistered rights. If such events occur this can be a good point to consider whether you wish to continue to pursue your chosen trade mark or rebrand. On the other hand, if no oppositions are filed, the trade mark will proceed to registration and the exclusive rights to use the trade mark will belong to you.

4. Disincentive to potential infringers

It is possible to search for registered trade marks before the Cayman Islands Intellectual Property Office (CIIPO) for a small fee via a registered agent.  It is always best to conduct a trade mark search before committing to a brand to ensure that a similar/identical trade mark is not already owned by a third party in respect of identical/similar goods and/or services. In-use searches are also recommended to check for any conflicting common law rights. It is common practice for businesses to conduct full trade mark clearance searches before filing a trade mark application and should their searches reveal a conflicting earlier registration this will act as a disincentive to move forward with the chosen brand.

5. Defence to an infringement action

Once your trade mark is registered, it cannot be infringed by the use of another registered trade mark in relation to goods or services which the latter trade mark is registered. In order to successfully bring infringement proceedings, the owner of the later trade mark registration would first have to invalidate your earlier trade mark registration through invalidity proceedings brought before the CIIPO or the Court.

6. Monetization of your brand

Your registered trade mark has an economic value. It can be sold or licensed to a third party in exchange for payment or royalties. It may also act as security before a bank or other financial institution in exchange for a loan.  Third party buyers, licensees and banks are much more likely to invest in a registered trade mark than an unregistered trade mark. The basic details of their investment should also be recorded on the public register through the filing of the relevant recordal applications at CIIPO.

7. Protection against trade mark trolls and cybersquatters

As you build up a reputation in your brand you may encounter trade mark trolls and cybersquatters seeking to register your brand as a trade mark or domain name with no intention to use it.  Securing your registered trade mark early on will help avoid such characters. In the context of domain name dispute resolution proceedings, ownership of a registered trade mark is a stronger right to rely on than an unregistered trade mark.

The bottom line is that trade mark registration is a good investment and that the long term protection gained is worth the initial investment.