SMALL and medium-sized businesses "attacked" by large competitors in alleged trademark disputes should not automatically back off because it is unnerving, a York litigation lawyer has warned.

Backing off because it seemed to be the easiest option could be far more costly and damaging in the long run, said Johanne Spittle, head of litigation at York-based commercial lawyers Denison Till.

She issued the warning after successfully defending North Yorkshire dry cat food manufacturer Burgess Supafeeds, part of Burgess Group plc, in a High Court action brought by global giant Mars, owners of Whiskas. Mars applied for an interim injunction to restrain sales of Burgess Supafeeds' recently-launched Supa Cat, alleging "passing-off" and trademark infringement. Mars alleged that packaging similarities could confuse shoppers into buying Supa Cat when they intended to buy Whiskas, although no such evidence was brought to court.

Had Mars succeeded, Burgess Supafeeds would not have been able to issue more Supa Cat in the current packaging and would have had to recall those already distributed.

The judge said "no reasonably alert customer" would associate the Burgess product with those of Mars.

The interim injunction application was refused, although Mars has the right to re-open the case if it wishes.

Ms Spittle said: "Huge investments and potential sales are at stake and large organisations are prepared to litigate if they perceive that their brands are under threat from competition, no matter how small it may be.

"This case demonstrates that SMEs (small and medium-sized companies) must not assume that just because a very large company threatens them they should back off, however unnerving it may be. Backing off in the face of such action can have huge cost implications commercially and legally as it can make it virtually impossible to protect the brand in the future. Not standing your ground can affect brand credibility and the business's reputation, which can be far more damaging in the long run."

She said North Yorkshire's SMEs were increasingly aware of brand identity and are seeking advice about registration and protection against litigation through intellectual property insurance. She said if an SME was threatened with unjustified trademark infringement it could sue for damages.

Updated: 11:15 Friday, September 03, 2004