Issue 26, February 2004
In 1998 I discovered German giant Deutsche Telekom was applying for the rights to use our company’s names, Telecom One and Telecom 1. My first reaction was to protect what my team and I had worked so hard to build and felt that rightfully belonged to us.
This gut reaction made me seek legal advice in an attempt to determine our position. Even though any legal dispute is an expensive undertaking – it cost us £100,000 over three and a half years and you are only awarded costs for the day’s hearing in trademark cases – I felt strongly that we deserved to hold onto the name. Attempting to re-establish ourselves under a different name would have negated all the hard work we had done in previous years. As Deutsche Telekom refused to negotiate, I realised a lengthy legal battle was inevitable.
When I set up Telecom One in 1997, I was advised that the company name was ‘too generic’ to register. Indeed I think it was this characteristic that was Deutsche Telekom’s motivation throughout the dispute – maybe it felt that ‘Deutsche’ Telekom would deter potential customers from outside Germany from using its services? The trademark dispute began in October 1998. As a small start up company, the trading we had done in the first year was modest, but we were gradually becoming known in the telecoms industry and this was important for our case.
We chose to get the best legal advice we could afford so appointed Steptoe & Johnson which in turn employed one the UK’s top trademark barristers to defend us. It was important to us to work closely with our legal team so we were kept completely up-to-date with every aspect of the case. This was immensely time consuming; finding old correspondence and remembering the chronology of events from five years ago was certainly a challenge.
Overall it was a slow process with letters from lawyers exchanging hands throughout. We never had any direct contact with Deutsche Telekom, but I was increasingly aware that this legal dispute was not its first priority. To such a large business, this dispute was perhaps trivial and immaterial, but to Telecom One it was an enormous undertaking.
Telecom One was my main priority and I was careful to ensure that the day-to-day running of the business was not disrupted. The situation did not affect our progression within the industry and our customers continued to receive the high quality standards they had come to expect. However, focusing on the future of Telecom One was difficult as the uncertainty of the outcome was a constant concern.
The final court hearing in the Patent Office finally arrived in September 2003, and I was keen to attend to see the dispute through to its conclusion. Throughout the legal wranglings it was clear that as a fairly young company we needed to establish that we had built up ‘goodwill’ in our name before Deutsche Telekom applied for the trademarks.
Usual goodwill measures – based on how the public at large perceives the company – were difficult for us to prove. Telecom One was still relatively unknown by the general public but as we had built up a reputation within our niche, by registering with Oftel and establishing links with other service providers, the Patent Office eventually ruled in our favour and Deutsche Telekom chose not to appeal.
All of us at Telecom One are proud that we fought the battle and came out victorious against a company as formidable as Deutsche Telekom, although if we’d known how the costs would mount up we may have thought twice. After all, a young company with slower growth may well have been crippled by it. In order to ensure nothing like this happens again, we are now in the process of registering with the European OHIM (Office for Harmonisation in the International Market), to secure our name across Europe.
The past five years have been extremely costly for the company but it has been worth the fight – not just for us. What is perhaps most beneficial is that the case has set a precedent for other smaller companies who are faced with a similar problem. It has undoubtedly been a useful learning experience for me personally. Dealing with a larger corporation has given me an insight into corporate bureaucracy and the consequence of embarking on such a legal dispute. For Telecom One and myself it represents an enormous achievement.
Patrick Naughton launched Telecom One in 1997. The now turns over £25m by selling ISP, mobile phone and telephone services. It also runs two interactive television channels – the Dating Channel and GayDate TV.
