One of the UK's tech success stories, accountancy software firm Sage Group plc, faces a damaging setback in the US after an injunction was successfully brought against the company banning it from using the Sage brand in its product names from the beginning of next year.
Efforts by the UK head office to play down the significance of the ruling are marred by the company's own assertion that its brand is "one of the company's strongest and most valuable assets".
The injunction requires Sage Software Incorporated to drop the Sage name from its accountancy products from 2 January 2002. The decision does not affect Sage products or services outside the US.
The court case was brought by Quick Technologies (QTI) when it issued a writ in March 1998 against Sage Software and Sage Holdings -- the US subsidiaries of The Sage Group plc. After a jury last month found that there was a likelihood of confusion between Sage products and QTI's accounting products -- which are also sold under the Sage brand -- the judge in the case granted the injunction earlier this week.
QTI said it has provided business software -- including accounting software -- under the Sage trademark since 1992 in the US. Its offerings now include online and CD/DVD-based research tools, printed directories, Web site creation and hosting packages, e-commerce modules, in addition to the accounting software.
While the Sage Group plc was formed 11 years earlier in 1981, it did not begin a concerted branding exercise in the US until the late 90s. In 1998 the company acquired California-based accountancy software firm State of the Art (SOTA) and changed the company's name to Sage Software Inc.
Sage now has over 200,000 customers in the US out of 2.7 million worldwide, according to its own figures. This number is about to be boosted by the US acquisition of Platinum for Windows, a PC-based financial application for small enterprise businesses from Epicor Software. Platinum for Windows was to have joined the Sage Software family of mid-market .business management products under the name "Platinum for Windows by Sage" The transaction is expected to close by mid-June.
Sage Group's UK spokesperson said this plan would now have to change. "I don't think we will be able to do that," he said, but added that Sage will be used as an endorsement on the box. "We will still be able to use the corporate name Sage Software," he contended.
Platinum for Windows will join the company's four existing products: Sage MAS 90, which is aimed at companies with ten to 500 employees; Sage Enterprise Suite, for companies with up to 1,000 employees; Sage BusinessWorks, designed for companies with up to 50 employees; and Sage DacEasy for smaller businesses.
The spokesperson acknowledged that all these will now have to be renamed, but said the US accounts for just eight percent of Sage's global revenues, and these products account for a small proportion of that. "The decision will not materially affect the company's revenues," he added.
Eric Natinsky, president of QTI, said he was pleased with the jury's verdict. "We expressed our concern to the defendants when they started using the name in this country that consumers would be confused," he said in a statement.
"Nevertheless, they decided to ignore our trademark rights, even in the face of a lawsuit in federal court. As they began re-branding their products to incorporate our name, we were contacted by an increasing number of people who thought the two companies were affiliated, jeopardising our good reputation and the control of our mark that it so important to our company. Now, three years later, we finally have regained control of our mark and can now move ahead with our business."
QTI can be found at www.sageworld.com, while Sage is at www.sage.com. The ruling is unlikely to affect Sage's domain name.
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