Businesses everywhere stood up and took notice when the European Commission’s Office for Harmonization of the Internal Market (OHIM) recently rejected “in its entirety” Pinterest Inc.’s claim to the Pinterest trademark in the EU. It seems like a company called Pinterest would be a prime candidate to register the trademark “Pinterest” – unless a small London start-up by the name of Premium Interest snatches it up first.
In a trademark challenge shrouded with irony, OHIM has ruled in favor of the owner of the trademark, social news aggregator Premium Startup. Its founder, Alex Hearn, has expressed his ability to sympathize with Pinterest, but has made it clear that smaller businesses cannot be made to forfeit their protected intellectual property rights, “especially when it’s your baby”. And despite taking on one of the fastest growing social networking sites in the world, that is exactly what Premium Interest has remained – a baby. It has yet to formally launch its news aggregation service, and recently switched from an online platform to an exclusively mobile one. It has yet to use the trademark it owns and has successfully defended, whereas Pinterest has been active since 2010. But what Premium Interest lacks in size it makes up for in swiftness. Premium Interest filed for its EU trademark on January 31, 2012 – two months before Pinterest Inc. even filed for its US trademark, and a whole two years after being launched! Premium Interest claims priority back to its EU filing date for its Australian trademark too. Pinterest was not only slow-moving in protecting its IP, but lazy too, presenting weak evidence of its use of the mark in the EU prior to Premium Interest’s filing date.
The outcome has once again poignantly highlighted that financial clout can be irrelevant of in determining basic intellectual property rights. Having just raised $225 million in its October 2013 round of financing, and planning on using the funds to expand internationally, the threat of having to change its name in order to do business in the EU alters the course of Pinterest’s global stardom. And it gives others, like Pintrips, a travel-planning service that was recently sued by Pinterest for trademark infringement, the opportunity to paint Pinterest as the big-bad-wolf preying on a smaller “hard-working start up on specious claims.”
Going forward, Pinterest will have to find that sweet spot between zealously protecting its intellectual property and recognizing which legal battles are actually harming the brand. The OHIM decision offers several practical and important reminders about the value of IP protection, so that businesses do not lose their battles, like Pinterest. It is clear that registration, and not use, is the key factor in determining ownership of a trademark.
Registration is directly correlated to having foresight and being proactive, and allows businesses to develop defensive litigation strategies. Pinterest focused on building their business at the expense of protecting it. By being attentive to its demographic and its market, Pinterest forgot to assess its competition, and that its competition spans beyond US borders. Leaving aside the fact that Pinterest acted slowly even in the US itself, it failed to remember that trademarks are geographic in scope – a US trademark will not automatically qualify a business for trademark protection in the EU. This is especially important for the online business model, which has a website that can be accessed globally, but whose trademark protections do not stretch as far. While Pinterest was accessible in the UK before Premium Interest registered the mark, it failed to show that it enjoyed the same familiarity there as it did with US consumers, and thus, was not entitled to unregistered trademark rights in the EU.
Costly litigation, public defeat, and the possibility of rebranding in the face of an unsuccessful licensing deal with Premium Interest are just a few of Pinterest’s problems. As it moves into monetizing its service as an advertising space, it will need to make up for its past mistakes and include trademark protection as it expands globally – nobody wants to advertise on “Pyntryst”. If only someone had pinned the old adage “the early registrant catches the worm” sooner, perhaps Pinterest would have paid heed.