Gold Coast entrepreneur Kylie Hughes is facing a legal showdown with Ikea over her Ikea hacks business, Stylkea. Picture: Richard Gosling
Gold Coast entrepreneur Kylie Hughes is facing a legal showdown with Ikea over her Ikea hacks business, Stylkea. Picture: Richard Gosling

Ikea’s $105 insult to Aussie mum

WHEN Kylie Hughes received a cease-and-desist letter from Ikea's lawyers in December 2017, it was "a little bit like getting a letter from a pop star you're in love with".

"There were two reactions," said the Gold Coast mum, founder of successful "Ikea hack" business Stylkea, a line of stick-on panels used to jazz up flatpack furniture.

"There was that, 'Oh my god, he noticed me', but then, 'Hang on, why are they picking on Stylkea when there are so many other companies with '-kea' in the name? That's why I decided to stand my ground."

Ms Hughes, 46, had launched her side hustle in July of that year. She lodged a trademark application with IP Australia in September, and pretty soon Ikea came knocking.

Lawyers for Ikea told Ms Hughes she was "infringing our client's Australian registered trade marks for Ikea; and engaging in misleading or deceptive conduct, and passing off".

"Our client has recently become aware of your business Stylkea, which sells decorative embellishments such as stickers and handles to attach to genuine Ikea furniture," the letter said.

"Our client is also aware that you have recently applied for registration of the trademark 'Stylkea' with IP Australia."

While Ikea "does not object to the nature of your business", it was "concerned that consumers may be misled into thinking that our client is in some way affiliated with your company, or endorses your products and services", the letter said.

It added that "our client is not requesting that you close down your business or change the products that you sell but rather remove the term 'Ikea' and '-kea' from your business name and make some minor changes to the way our client's Ikea trademarks and products are referred to on your website".

"Their initial letters were asking me to withdraw my trademark application and choose a business name and domain that didn't have '-kea' in it," Ms Hughes said.

"They asked me to deregister the domain and cancel my business name. They said, 'Here's the solution - we'll pay you $82 to register a new business name and $23 to register a new domain name'. So they were offering me $105. I wrote back and said, 'I'm not going to do that'. At the time I already had 17,000 social media followers."

 

Ms Hughes says she refuses to be ‘intimidated’ by Ikea. Picture: Richard Gosling
Ms Hughes says she refuses to be ‘intimidated’ by Ikea. Picture: Richard Gosling

 

Ms Hughes felt confident in her position, saying she had "done a lot of due diligence" and found businesses all over the world that used the "-kea" suffix.

"If no other '-kea' companies existed I think there would be reason for them to put the heavy word on, but the fact is there's a booming ecosystem based around Ikea and Ikea products," she said.

"In the Netherlands there's Mykea, they do wraps for Ikea furniture, there's a delivery service in America called Mamakea, in the UK there's Plykea, they do fronts for Ikea kitchens. Then what you find is the '-kea' suffix has been genericised. There's a tobacco paraphernalia store in the US called Smokea. I felt confident there were lots of precedents."

Lawyers for Ikea hit back that "we can assure you that our client has taken action against many other businesses in Australia and elsewhere for misuse of the Ikea trademarks".

"We thank you for notifying us of the '-kea' businesses in your letter which we have forwarded onto our client for their action," they said.

IP Australia apparently agreed with Ms Hughes, however, approving her trademark in early 2018. Her business name registration with the Australian Securities and Investments Commission was also approved.

Ikea has now exercised its right to appeal the trademark with IP Australia - a process that could take anywhere up to 18 months.

Ms Hughes has opted to represent herself, saying she can't afford the $10,000 she would need to pay a lawyer for a defence.

"I couldn't afford a proper legal defence and (also) having to rebrand the business if I lose," she said. "So we decided I would defend myself and have faith in the system."

In the meantime it will be "business as usual".

"We're turning over $5000 a month, the business is profitable, we ship all around the world and manufacture locally in Australia," she said. "It's a great, growing little business."

She added she felt like "I'm meant to be intimidated and I'm not".

"I've been in business for long enough to know if I'm being naive, and I don't believe I was naive in choosing that name," she said. "It was well researched. But it is a cautionary tale that you can do your due diligence and still be intimidated."

A spokeswoman for Inter Ikea Systems B.V. said the company did "not comment on any ongoing cases".

"In general, as the worldwide franchisor and owner of the Ikea concept, it is very important for us to protect the intellectual property rights associated with the Ikea brand," she said.

"We feel a great responsibility towards our customers, and want to ensure that they can always trust the Ikea brand and know what is really connected to it - and what is not."

Intellectual property lawyer Dimitrios Eliades said it appeared to be a "very lineball kind of case" and was "certainly not a one-way street for Ikea".

In Ms Hughes' favour would be the "Maltesers vs Maltitos" precedent, in which the Mars chocolate was found to be "so well known in Australia that no one could reasonably think Maltitos were associated with the manufacturer of Maltesers".

"In other words the brand became so big it actually worked against it," he said.

He said other points in her favour were that "generally the prefix is more important than the suffix" and that her branding did not use the Ikea blue and yellow.

But he warned examples of overseas companies "have no relevance unless these other brands have a link to Australia or have what they call a spillover reputation".

From Ikea's point of view, Mr Eliades said the company "could say that a reasonable person might think that Stylkea is a sub-brand of Ikea".

"Secondly, Ikea's argument could be that the test of deceptive similarity is one that gives pause to wonder. 'I wonder whether Stylkea is associated with Ikea?' That's basically the test."

Mr Eliades said the other thing "which is very telling is the Stylkea name and business has its roots with a factual connection to Ikea".

"They will say, 'You intended to have a commercial link or an appearance that you have a commercial link, your target market is people who have Ikea furniture'," he said.

In general, Mr Eliades said small businesses should always choose a completely original name when starting out to avoid these kinds of problems.

It should not be something "descriptive of the business" like "Super Hot Chicken". "Small businesses have a tendency to want to, in their name, market what they do," he said.

"But the more descriptive it is, the more others might be entitled to use it. You make up a name, it will have no goodwill in the beginning because it's completely made up, then you pump your goodwill into that previously unknown name."

 

frank.chung@news.com.au


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