What Dragons’ Den Teaches Us About Trade Mark Risk

Dragons’ Den does more to promote the value of intellectual property than almost any other television programme. The Dragons tend to invest only in businesses with genuine IP protection — trade marks, patents or copyright that prevent competitors from simply copying the idea and devaluing the investment. Without that protection, there is nothing proprietary to back.

For this reason, a founder called Rajan Jerath must have felt confident when he pitched iGlove — a glove that allows users to operate touch screen devices without exposing their hands to the cold. He had registered iGlove as a trade mark and had applied for a patent. The IP box appeared to be ticked.

The stumbling block was the name itself.

The disagreement in the Den

Peter Jones argued that iGlove was too close to Apple’s family of iconic trade marks — iPhone, iPad, iPod — and that there was a serious risk of the company being sued. Duncan Bannatyne disagreed, reasoning that because the entrepreneur had successfully registered iGlove as a trade mark, there was little Apple could do. Jones declared himself out. Bannatyne invested £75,000.

It was a revealing moment. Two experienced investors, looking at the same set of facts, reaching diametrically opposite conclusions about trade mark risk.

So who was right?

Jones had the better of the argument.

Having a registered trade mark does not mean you cannot be sued for using it. A mark can be registered and still infringe an earlier right — registration is not a guarantee of safety, it is the beginning of a process that can always be challenged. There are numerous reasons why a conflicting mark might be allowed through examination, including the examiner not identifying a conflict, or the earlier rights holder not opposing the application in time.

In iGlove’s case the risk was significant. The use of the “i” prefix — strongly associated with Apple products in the minds of consumers — combined with a product designed to be used with Apple devices created a compelling case for confusion. Apple spends enormous sums enforcing its IP rights and is one of the most aggressive trade mark holders in the world. The question was not whether Apple had a case. The question was whether they would decide to pursue it.

After the show aired, David Bloom tweeted Duncan Bannatyne directly to suggest he consider IP insurance to hedge against the cost of any potential litigation. It would have been a sound investment — not because iGlove was necessarily in the wrong, but because defending a trade mark claim from Apple, even a defensible one, could easily run to six figures before proceedings were even issued.

The broader lesson about trade mark clearance

The iGlove case illustrates something that catches many businesses out. Registering a trade mark and clearing a trade mark are two different things. Registration means the intellectual property office has accepted your application. Clearance means you have actively investigated whether your mark conflicts with existing rights — and taken a considered view on the risk.

Many businesses do the first without properly doing the second. They register a name, assume the registration means they are safe, and discover later that a prior rights holder has a legitimate grievance. The fact that the mark was registered offers limited comfort if the infringement claim is based on reputation, association or consumer confusion rather than on the registered mark itself.

Before committing to a brand name — particularly one that echoes the language or style of a well-known company — it is worth taking proper legal advice on the risk. The cost of that advice is trivial compared to the cost of a dispute.

And if you proceed with a name that carries some residual risk, IP insurance covers the legal costs of defending trade mark infringement allegations — giving you the means to fight rather than simply concede when a larger opponent comes calling.

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This article is provided for general information purposes only and does not constitute legal advice. Readers should seek independent legal advice on their specific circumstances before taking any action.