Page last updated at 15:17 GMT, Friday, 4 April 2008 16:17 UK

Trademark scam targets businesses

BBC Scotland's Mark Daly confronts John Blanchard of Never Give Up Ltd


By Mark Daly
BBC Scotland investigations correspondent

A trademark scam which caused havoc in the United States has reached Scotland, hitting small companies and threatening to put them out of business, a BBC investigation has found.

Some of Scotland's fruit juice chains have been targeted by what are known as trademark trolls - and experts have warned small businesses to be on the look-out.

The troll typically registers the name of an existing business as a trademark, then demands cash to lease or sell it back to the original company.

Two Scots chains, Juiceling in Glasgow and Juiced Up in Edinburgh, were contacted last year by a company claiming they owned the trademark to their brands.

Callum Johnson, owner of Juiceling and Glasgow's Young Entrepreneur of the Year, said he was told he would have to pay tens of thousands of pounds to buy the trademark back.

It felt like I had the carpet swiped from under me and that I was effectively being robbed by this company
Callum Johnson
Juiceling owner

Juiceling was also threatened with court action and damages running into millions.

In the US, trademark trolls - also known as patent trolls - are a known menace, causing massive companies like Google to engage in expensive litigation against them.

Mr Johnson, 26, who started his chain of shops three years ago, said: "The first thing he said was 'hello Mr Johnson just to let you that I'm representing clients who currently own the name Juiceling. We want to know how you would like to proceed, if you want to lease the trademark from us or buy it from us'. It was like a shot out of the blue.

"He was looking for something in the region of £25,000 to £30,000 otherwise I would be going to court. It's a ridiculous amount of money - especially when you're selling £3 smoothies.

"I've spent three years building up my brand. I have three shops now and people know who Juiceling are. It felt like I had the carpet swiped from under me and that I was effectively being robbed by this company."

'Liable for damages'

The company in question is Never Give Up Limited and the front man doing the negotiations is John Blanchard.

Mr Blanchard didn't confine his attempts at making a quick buck to Juiceling.

Jonny Oag, 28, who has four juice bars in Edinburgh called Juiced Up, received an identical approach.

He said: "I got a call back in December from this guy Blanchard, saying he wanted to charge me for the usage of Juiced Up, that he now owned the trademark and that I was due him a licence fee.

"He said I would have to pay this, or else buy the trademark outright, or stop trading under the Juiced Up name, or I would be liable for damages."

Never Give Up has attempted to register trademarks for at least 34 different juice-related names, at least four of which are names of existing juice companies, at the government's Intellectual Property Office.

Jonny Oag, owner of Juiced Up,
Jonny Oag, owner of Juiced Up, was among those targeted

However, many of them, including Juiced Up and Juiceling, are still in the application stage - meaning he doesn't even own them yet.

John MacKenzie, a partner at trademark specialists Pinsent Masons, said Mr Blanchard's trademarks were virtually worthless.

He said: "You cannot get a trademark for an existing and established company name. Even if these companies did not register the trademark themselves, by simply trading under that name for a significant amount of time it builds up a reputation in a trademark.

"This is what gives it value and goodwill. It is the use and goodwill, more than the fact that it is registered, that gives a trademark value which can then be protected. And in this case, he doesn't even own the trademark yet anyway, which puts him in an even weaker position."

The juice bar owners allege Mr Blanchard tried to panic them into parting with tens of thousands of pounds for a trademark that was virtually worthless.

'Millionaire status'

I wondered if he had done this before and whether he had succeeded. I decided to go undercover and pose as a representative for one of the juice companies.

I entered negotiations with Mr Blanchard, who claimed to represent a family of millionaires who had made their fortune in the hotel and property business over many years.

But when I checked the records at Companies House, the directors of the Never Give Up were aged only 24 and 31, had only five directorships between them, and none of the companies had filed any accounts.

I could find no evidence of this "millionaire status" and wondered if Mr Blanchard had been trying to scare me.

Once he realised I was interested in negotiating a price to buy the Juiceling trademark, he became very aggressive and repeatedly issued me with deadlines.

Back in September, he had told Mr Johnson his clients would be prepared to sell the mark for £25,000 to £30,000.

John Blanchard
John Blanchard has defended his actions

That was last year, he said. The price had gone up. He wanted £65,000. He compromised on £58,500. That's quite a profit for a trademark application which cost him only £200.

I asked him what would happen if Juiceling didn't accept the deal and continued trading.

He said there would be court action and damages running into millions of pounds - a completely false claim.

I arranged to meet him in a café to exchange contracts and "hand over the money".

Mr Blanchard had turned up to the meeting expecting to walk away a wealthy man, £58,500 richer. But instead, I unmasked myself as a BBC reporter.

Mr Blanchard denies any wrongdoing, saying he registered all trademarks in good faith.

Despite my recorded evidence to the contrary, he denies threatening the juice bars with court action and claims his negotiations with the companies and myself were all legitimate.

Mr MacKenzie said: "Never Give Up do not have a sound basis in law for the demands they are making. What the juice companies have to do is get some good legal advice and tell this guy to get lost."

Both Mr Johnson and Mr Oag intend to oppose the trademark application.

But the advice from legal experts to small companies is that if you don't want the hassle of fending off trademark trolls, it's probably worth investing the £200 just to give you peace of mind.


Do you have a story you want me to investigate? Email me at mark.daly@bbc.co.uk



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