ASOS pay out £20 million to settle trademark infringement claims
The UK online fashion retailer has settled claims over alleged trademark infringement with two European retailers following disputes over their names.
Anson’s Herrenhaus (German menswear retailer) and Assos (a Swiss cycling clothing firm) launched claims against ASOS in 2010 and 2011 respectively, as ASOS began to grow rapidly outside of the UK. Both retailers operated before ASOS changed its name from ‘As seen on screen’ in 2002. ASOS managed to defend the claims on home soil based on the ‘own name defence’. The defence means that an EU trademark owner cannot prevent a third party from using their own name during trade, as long as it is used in accordance with honest practices in commercial matters.
Nick Beighton, Chief Executive of ASOS, confirmed that this was “the right commercial decision” for the business and that the settlement was “full, final and global”. The settlement gives ASOS the opportunity to launch into the fast growing ‘athleisure’ market, without the threat of litigation and the possibility of having to rebrand.
The global nature of the settlement makes sense due to the claims against ASOS being in the key territories of the US, France and Germany. Long term, this may be considered a wise decision-bearing in mind the inconsistency in intellectual property law across jurisdictions. A defeat in the courts in the US or Europe could leave the company feeling vulnerable to further allegations of trademark infringement, despite the Court of Appeal in the UK finding in its favour.
Since the decision, amendments to the EU Trademark Regulations have been made. The own name defence is now only available to natural persons meaning, going forward, companies such as ASOS would be unable to rely on it. This amendment could have a damaging impact on corporate defendants who have built-up brands in reliance on this defence prior to the change. Before the settlement, there was huge risk of a fresh action being brought against ASOS now that its defence has fallen away.
It appears that ASOS have sensibly opted for long-term legal and commercial certainty over a significant but short-term financial liability.