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Small Food Producer Feels Wrath of a Big Brand

Beware the wrath of big brands and their lawyers. What happens when a start-up gets hit for trademark infringement by a big corporation?

When a curtly worded letter arrived accusing Bethany Eaton’s Nush Foods of trademark infringement, something did not add up. It came from the lawyers Baker McKenzie representing Nosh Beverages — a maker of healthy smoothies that boasted a single-page website and a Twitter account that had not been updated for weeks. How could such a tiny company afford to hire the world’s second-largest law firm?

After some digging, Eaton discovered that Nosh’s owner, Life Health Foods UK (LHFUK), had strong links to Sanitarium Health & Wellbeing, a large Australian corporation. Sanitarium is owned by the Seventh-day Adventist Church, a Protestant denomination with more than 20m members.

Eaton, 39, could not believe it: “When I found out, I was scared. At first, I thought there is no way we can fight this.”
Trademark law is increasingly being used as a tool to attempt to crush small businesses. A string of recent cases involving multinationals such as the energy drinks maker Monster Beverage and beer maker BrewDog show the willingness of large corporations to threaten much smaller ones with legal action.

For Eaton, the legal letter was a bolt from the blue. She founded Nush with her husband, Paul, last year. Both served in the Metropolitan Police before pouring £150,000 of savings into the start-up, which makes dairy-free yoghurts that are sold in Waitrose and Sainsbury’s. They had registered trademarks in Britain and the EU. That didn’t wash with Baker McKenzie, which demanded that Nush change its name within six months — or face the consequences. The law firm declined to comment.

The link between Nosh and the Seventh-day Adventists is disputed by Sanitarium, which said it has no shareholding in Nosh’s owner LHFUK. A senior source at LHFUK said trademark disputes were common between two small businesses. However, Sanitarium lists LHFUK as an entity operated by the church on its website. Two senior Sanitarium executives are listed as active board members in LHFUK at Companies House.

According to its website, Sanitarium is operated by the church as “part of its vision to improve the health and well–being of communities”. It uses any profits, which are not taxed because it has charitable status, to support efforts to improve health.
Sanitarium has form for trademark disputes. Earlier this year, customs officers in New Zealand impounded hundreds of boxes of Weetabix destined for a small shop selling British goods in Christchurch. Sanitarium, it emerged, had complained that the brand could be confused with its own Weet-Bix product. Its actions caused uproar among expat Brits.

The attempt to block Nush is the latest in a long line of trademark disputes that appear to pit David against Goliath. Berkshire drinks business Thirsty Beasts, set up by an Iraq war veteran, was last month threatened by lawyers representing the US giant Monster Beverage, which objected to the use of the word “beast”. And earlier this year, the Scottish craft beer company BrewDog threatened legal action against a Leeds pub with the word “punk” in its name. BrewDog, whose best-selling brand is Punk IPA, eventually backed down.

UK intellectual property law “makes it very hard for big business to act like bullies”, said Kate O’Rourke, president of the UK Chartered Institute of Trade Mark Attorneys. Big companies are by no means in the wrong in all cases and problems can easily be avoided. Many small business owners fail to trademark their brands, or do not carry out sufficient research before choosing a name.

O’Rourke recommends seeking specialist help, and it does not have to cost anything: some trademark attorneys offer an initial 30 minutes of free advice.

But it may also be worth fighting back. After considering Nush’s position, Eaton has instructed her lawyers to resist the demands. “They want to bulldoze in and act like bullies,” she said. “And I’m not having it.”

Source: - 5 November 2017