SpeechWorks Limited, based in Coatbridge near Glasgow, set up in
1998 and started writing speech recognition software. The company
registered the word SpeechWorks as a UK trade mark in January 1999,
having checked that no other company had done so. Six months later,
SpeechWorks International Inc., a US software company that
previously had no UK dealings, opened an office in Staines,
England. The US company also owned the domain name
SpeechWorks.com.
The UK company brought an action for trade mark infringement
against its US rival, asking a court order to stop the US company
trading under the name in the UK pending a full hearing on the
issue of damages for infringement. However, Lord Nimmo Smith in the
Intellectual Property Causes Court, Edinburgh has ruled that the
court order should not be granted, although he acknowledged that
the SpeechWorks Limited has a case to argue.
His reasoning was that, on the balance of convenience (the test
applied to requests for interim interdicts, known as injunctions in
England), he could not support the Scottish company. He based his
reasoning on the relative sizes of the two companies, observing
that the bigger US company was better placed to compensate the
smaller Scottish company if the Scottish company was
successful.
David Robertson, a director of SpeechWorks Limited, told
OUT-LAW.COM:
"It is astonishing to believe that after
registering a legitimate and bona fide trademark in the UK during
the business start-up process, a young Scottish company cannot rely
on the protection afforded under trade mark law, purely on the
basis that it would be too inconvenient for the infringing
multi-national company to cease using their conflicting mark.
"This is a classic business case of size
really does matter."
Although this case may yet go to further courtroom debate, it
could have implications for other small UK companies with
legitimate UK trade marks which find themselves forced to give in
to larger rivals overseas, unless they have the resources to fund a
long and potentially expensive fight.
