The Importance of Trademarks – And why they can come at a cost

In 2015, online bathroom specialist reported healthy operating profits of £3.2m, but in 2016 it found itself with a worrying operating loss of £9.1m. Part of this, the company said, was down to the increased administration costs of transforming the business from former name Victoria Plumb to its new, online-specific name  But a significant chunk of the overall loss can be attributed to a major trademark infringement case.

Earlier this year, took legal proceedings against Victorian Plumbing, a direct competitor, for trademark infringement of its brand name. They also wanted action taken against Victorian Plumbing spending huge chunks of money on online search adverts which would pop up every time a customer searched for the Victoria Plum brand and its related terms.

In November, the court eventually found in favour of and ruled that its competitor had spent “hundreds of thousands of pounds per annum” on adverts which were indeed liable for trademark infringement.

Shortly after the ruling, CEO Paul McClenaghan said: “The court found that Victorian Plumbing acted unlawfully, infringed our trademarks and was increasing and exacerbating confusion for customers.”

This is a perfect real-life example of how sufficient trademark registrations work to safeguard your brand. But it also demonstrates the negative financial and sales implications that come with trademark infringement cases — even if the case is ruled in your favour.

In order to combat the confusion caused by the competitor’s adverts, had to invest heavily in its own advertising that would drive customers to the correct website — an effort that is ultimately reflected in this year’s operating loss. It also saw its year-on-year sales fall 3%, from £72.3m to £70.3m. Add all of this to the considerable legal fees that come with any court case, and you start to understand why trademark infringement cases are taken so seriously.

Despite the costs involved, managed to reduce what could have been an even more significant loss to the business by taking swift and affirmative action as soon as it caught light of the infringement. If anything, it just goes to show the importance of constantly monitoring your brand across all channels.