ASOS Pays Out £20million in Trade Mark Dispute

ASOS, the UK based online fashion and beauty store aimed at young adults, has been left counting the significant cost of having settled a trade mark dispute with two European rivals. The headline term of the settlement is that ASOS will pay £20.2 million to Swiss cyclewear manufacturer ASSOS and German retailer Anson's Herrenhaus. The division of this sum between ASSOS and Anson's Herrenhaus has not been disclosed.

The settlement has been agreed between the parties following a protracted legal battle and despite the large settlement sum, ASOS stated it was happy with the outcome and to have put the litigation behind them. Importantly for ASOS the terms of the settlement allow them to begin selling athletic leisurewear and this fact will likely go a long way to softening the blow of the large settlement sum.

The dispute began when ASSOS launched proceedings in the UK in December 2011 alleging infringement of its Community Trade Mark and partial invalidity of ASOS's UK trade mark. A majority decision at the Court of Appeal held that the ASOS mark was likely to cause confusion in the mind of consumers and damage the distinctive character of the ASSOS mark. There is however a defence to trade mark infringement where an individual or company is using its own name, and ASOS was able to rely on this 'own name' defence and successfully defend the action to date.

ASOS is a publicly listed company and this settlement was well received by the markets which were concerned about the impact of the litigation. This was due to the fact that if ASOS had ultimately been unsuccessful in the litigation it would have been forced to rebrand which could have had a significant effect on the value of the company.

This case demonstrates the many commercial considerations that need to be taken into account during any trade mark litigation. It is not only a legal consideration of whether infringement has occurred or not but also commercial considerations around the value of the brand which may be jeopardised and access to important and potentially lucrative new markets.

If you have any questions on the above please do not hesitate to contact the team at McDaniel & Co. on 0191 281 4000 or legal@mcdanielslaw.com.