Neologisms swirl around like confetti in the online technology world, where new or emerging technologies, such as Artificial Intelligence, Blockchain, Cyptocurrencies, Smart Contracts and the Internet of Things, stimulate talented marketeers to come up with clever and eye-catching branding. New or even “wacky” names proliferate.
Is it enough that a brand is a neologism for it to constitute a registrable trade mark? Are neologisms automatically considered distinctive for registration and validity of a mark?
The English Intellectual Property Enterprise Court recently explored these issues in the case of Wirex Ltd v Cryptocarbon Global Ltd and others  EWHC 617.
We consider the judgment and what, in the light of it, businesses hoping to use a neologism as their foundation branding (whether in relation to new or emerging technologies or otherwise) ought to do to bolster the case for protecting it with a trade mark that is actually validly registered.
What happened in the case?
Wirex Limited, a cryptocurrency payment platform, began offering its “Cryptoback” credit card rewards scheme in May 2018. The scheme gave cryptocurrency rewards to customers who used their Wirex card for both in-store and online purchases. Wirex filed an application for a UK trade mark, CRYPTOBACK, on the filing date of 28 April 2018.
The defendants offered a competing cryptocurrency cashback service under the name “cryptoback”. Wirex alleged trade mark infringement by the defendants, and the defendants counterclaimed for a declaration that Wirex’s mark was invalidly registered.
What were the key issues?
The defendants argued that:
- The word "cryptoback" was a neologism, derived from the contraction of "cryptocurrency cashback", and was recognised by the public as distinctive of their own services (for purposes of the accrual of goodwill under the law of passing off). Neologisms, because they are newly coined words/expressions, do not have an established meaning and so are inherently non-descriptive.
- They had acquired goodwill associated with the word "cryptoback" before Wirex’s filing date, and had accordingly acquired the right to prevent use of the CRYPTOBACK mark at Wirex’s filing date by virtue of the law of passing off. The mark had therefore been invalidly registered (section 5(4)(a), Trade Marks Act 1994 (1994 Act)).
- As Wirex had known about the defendants’ earlier use when Wirex applied for the mark, its application had been made in bad faith, contrary to section 3(6), 1994 Act, and should be declared invalid on that basis.
In relation to the defendants’ arguments, Hacon J. observed that:
- It has long been recognised that there is a potential difficulty facing a claimant (in the position of the defendants) who seeks to rely on goodwill associated with a newly coined word which is used in relation to a particular product or service.
- A further issue was whether the public regarded "cryptoback" as descriptive of a type of service: "'Cryptoback' is a contraction of ‘cryptocurrency cashback’ and is thereby potentially descriptive. The more descriptive a word is of the goods or services in respect of which it is used, the more use, established to be use as a badge of origin, is liable to be required in order for it become distinctive of a single entity's goods or services (assuming that it is not so descriptive as to make that impossible in practice).” This consideration was relevant to whether the defendants had established that they had acquired goodwill by Wirex’s filing date.
What was decided?
On the facts, Hacon J. held that defendants had failed to establish that, at Wirex’s filing date, the defendants had accrued sufficient goodwill associated with the word "cryptoback" as a trade name.
The Wirex mark was therefore valid and judgment was given for Wirex.
Neologisms and distinctiveness
What is more significant than the outcome of the case itself is what Hacon J. said about neologisms and distinctiveness:
- He rejected the defendants’ argument that neologisms, because they are new, do not have an established meaning and so are inherently non-descriptive: “a neologism, especially where used in relation to a new product or service, may be taken by the public to be a new word for that type of product or service.”
- However, he did not accept that, because a word is new, it must be inherently non-descriptive. “The nature of the word and the goods and / or services in relation to which it is used will govern where it lies on the spectrum of descriptiveness.”
Neologisms and trade marks
UK trade mark legislation prohibits the registration of marks that are "devoid of any distinctive character" (section 3(1)(b), 1994 Act) or marks that indicate the characteristics of the goods or services with which they are associated or their geographical origin (section 3(1)(c), 1994 Act). A merely descriptive mark is not enough.
While Hacon J.’s comments were made in relation to whether sufficient goodwill had been acquired for purposes of the law of passing off, they are clearly relevant to a consideration of whether a neologism is sufficiently distinctive – or merely descriptive – for purposes of registration and validity of the neologism as a mark.
- Do not assume a new word will be regarded as distinctive: beware of assuming that using a newly coined word or expression for your products or services will automatically be considered distinctive and non-descriptive for purposes of mark registration and validity. That is not the case.
- Go completely wacky: the word/expression can still be considered to be descriptive if it describes the function of a product/service too closely. To avoid this, businesses should consider how the product/service is marketed, and/or consider adding minor quirky or unusual elements to the mark to make it less descriptive of the product/service for which registration is sought. This may help to differentiate the mark from use made by others of more descriptive formulations.
- Do not wait to register: take care with waiting too long to register a neologism as a mark. Although it may be a made up word or expression, others in the market might well be using that same term to describe identical or similar products/services. Seeking early registration of such words is preferable rather than having to rely on a passing off claim later down the line.