When Big Businesses Are Right to Defend Their Trade Marks

There is a narrative that runs through almost every trade mark dispute involving a large company and a small one. The big business is the bully. The entrepreneur is the underdog. The public sides with David, not Goliath.

Sometimes that narrative is entirely correct. Large, well-funded businesses do sometimes use trade mark law as a weapon to crush legitimate competition, and that is wrong. But sometimes the narrative obscures a simpler truth — that the large business has a genuine right it is entitled to protect, and the smaller one has built its model on someone else’s goodwill.

The Stylkea case is a good example of the latter.

What happened with Stylkea and IKEA

An Australian furniture start-up called Stylkea sought to register its name as a trade mark. IKEA opposed the application and asked the business to change its name. The founder, Kylie Hughes, responded by going public with claims of bullying and intimidation, invoking the David vs Goliath analogy and attracting considerable media sympathy.

It was a compelling story. It was also, on the legal merits, a weak one.

Why IKEA was right to act

IKEA is one of the most recognisable brand names in the world. The whole purpose of owning a registered trade mark is to prevent third parties from unjustly benefiting from the goodwill attached to it — goodwill that has been built up over decades and at enormous cost.

It is difficult to accept that the founder of Stylkea had not heard of IKEA when she chose her business name. And if she had — which seems certain — then the name was almost certainly chosen, consciously or otherwise, to benefit from the association. That is precisely what trade mark law exists to prevent.

This is not bullying. It is legitimate enforcement of a valuable registered right.

The broader lesson for businesses with trade marks

The Stylkea case is a useful reminder of something that often gets lost in the David vs Goliath framing: registered trade marks are only valuable if they are actively defended.

A trade mark that is not enforced can be weakened over time. If a brand owner allows confusingly similar names to proliferate without challenge, it becomes progressively harder to argue that consumers are not confused — which is the foundation of any trade mark claim. Enforcement is not optional. It is part of the commercial value of the right itself.

This applies equally to small businesses. If you have invested in registering a trade mark — paying the filing fees, waiting through the examination process, building your brand around it — you have a legitimate interest in protecting it. The size of the infringer is irrelevant to whether your right has been infringed.

What happens when you cannot afford to enforce your rights

This is where the practical reality of trade mark ownership gets uncomfortable for most SMEs.

Enforcing a trade mark is expensive. Even a relatively straightforward dispute — sending letters before action, obtaining counsel’s opinion, engaging in settlement negotiations — can run to tens of thousands of pounds before proceedings are issued. A contested case that reaches the Intellectual Property Enterprise Court can cost £50,000 or more per side. A full High Court trial significantly more.

For most small and medium-sized businesses, those figures are simply unabsorbable. Which means that in practice, many registered trade marks go unenforced — not because the infringement is not real, but because the cost of doing anything about it is prohibitive.

Trade mark insurance exists to change that calculation. It covers the legal costs of enforcing your registered trade marks against infringers, and defending allegations that you have infringed a third party’s trade mark rights. It gives businesses of any size the means to act when it matters — not just the theoretical right to do so.

IKEA could afford to defend its trade mark. Most businesses cannot — unless they have insurance in place to fund the fight.

Find out more about trade mark insurance → Get a free indicative quote →

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.