Iceland’s trademark – will it be cold comfort for Supermarket Giant?

November 30, 2016

The government of Iceland has threatened to begin proceedings in an attempt to invalidate the Iceland supermarket’s European Union trademark at the EU Intellectual Property Office in Alicante Spain. Will Iceland the Supermarket be frozen out or is it ‘Icebergs Ahead’ for Reykjavik?

The Iceland supermarket chain owns supermarkets in both EU and non-EU countries, (including Iceland itself!). The chain first registered the name ICELAND in the UK in 1994 and it now owns registrations in several classes here and in the EU.

The essence of trademark protection is that it gives the holder a monopoly over the protected words, meaning that nobody else can use them in the classes in which they have been protected. This means that certain Icelandic companies are being denied the opportunity to use ‘Iceland’ in connection with their products because of Iceland the Supermarket’s earlier rights – rights which they are not shy about asserting.  For example, ‘Iceland Gold’, an Icelandic fish company and ‘Clean Iceland’, a specialist seller of Icelandic national products, have reportedly both had difficulty doing business in the EU due to the Supermarket’s ownership of the trademark.

Gunboat diplomacy has not yet broken out, but the Icelandic Government is not happy. It argues that firms from Iceland should not be prevented from using the word to denote their country of origin.

Along with the organisation ‘Promote Iceland’ it is seeking to ensure that Iceland the Supermarket is not allowed to use its trademark to prevent Icelandic companies using the word to identify where they come from. They might argue that under Trademark law descriptive use is an effective defence against trade mark infringement and so if companies are just describing that they are ‘from Iceland’ they should not be regarded as infringing anything.

Will they succeed? Trademark law (under the EU Trademark Directive and the Paris Convention) certainly mandates some restrictions based on nationality – national flags and emblems cannot be registered as trademarks. However, there is no prohibition on the name of a country becoming a trademark.

Iceland the Supermarket has therefore responded frostily to the threat of a claim. It points out that it has been using its brand for over 40 years without objection. It might also assert that it first applied for EU Registration of its trademark in 2002, and the mark took 12 years to achieve registration as a result of a lengthy ‘opposition’ process, during which time, no doubt, issues arising from any confusion between the name of the country and the name of the brand could or should have been explored.   What else is there to add to the debate now?

In reality, it seems likely that relations may thaw sufficiently for a compromise to be agreed between the parties which will allow both to use the trademark in specified areas. These kind of explicit or tacit arrangements are quite common (think of ‘Polo’ the mint, ‘Polo’ the car, and ‘Polo’ the leisure shirt, which all seem to co-exist quite happily).

The primary lesson though is the importance of registering a trademark in the first instance, in order to ensure that your brand is adequately protected. Many SME’s don’t bother with trademark protection. They feel that other issues (funding, product development, marketing) are all more important than the abstract issue of protecting intellectual property. However. Iceland the Supermarket has ensured it has a place at the table in this debate because it took the time and trouble to protect its mark over a number of years. That dedication to its brand is one of the main reasons why ‘Mums go to Iceland’………………..

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