By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Telecommunications Company (BTC) is demanding that its new mobile rival stop using its controlling shareholder’s name to brand one of its product suites, setting the stage for a bruising trademark lawsuit.

Aliv, which has broken BTC’s long-standing mobile monopoly, has responded defiantly to its competitor’s demand, insisting that it will “continue to advertise” its ‘Liberty Global’ Haiti calling plan.

The brewing trademark/copyright battle between the two mobile rivals is disclosed in the private placement memorandum (PPM) for Aliv’s recently-closed bond offering, which closed on Tuesday last week 100 per cent oversubscribed, having raised $60 million.

Liberty Global is now BTC’s controlling shareholders, and the latter is arguing that Aliv’s use of the same name for one of its product categories falsely suggests its parent has “endorsed” its rival.

Aliv, though, is countering that ‘liberty’ and ‘global’ are common English words, and that BTC and its controlling shareholder “do not have monopoly rights” over their usage.

It added that Bahamian consumers are unlikely to connect Liberty Global, the company, which took over BTC via its 2016 acquisition of Cable & Wireless Communications (CWC), with Aliv’s own product offerings.

“On March 6, 2017, BTC wrote to Aliv’s general counsel alleging the unauthorised and infringing use of ‘Liberty Global’ by Aliv,” Aliv’s PPM discloses, describing the issue as a ‘pending trademark claim’.

“BTC claims that ‘Liberty Global’ is an international telecoms company providing services around the world, including in the Caribbean, and that in May 2016 became the majority shareholder in BTC,” Aliv’s explanation continued.

“BTC alleges that Aliv’s use of Liberty Global’s intellectual property is likely to confuse the public into believing that there is a connection or an endorsement constituting false representations. BTC required that Aliv remove the name and mark of Liberty Global, and cease and desist use with any and all promotional material, within 10 business days of the date of the letter.”

Aliv makes clear it has refused to bow to such demands, even though BTC “advised that it intended to immediately move to register Liberty Global pursuant to Chapter 322” of the Bahamas’ Trade Marks Act.

Setting out its own position, the new mobile operator said: “Aliv will defend its right to use the words ‘liberty global’ for its suite of pay in advance international calling plans.”

It added that Cable Bahamas, which holds a 48.25 per cent equity stake in Aliv, and has Board and management control, had made an application on September 2, 2016, to register ‘liberty global’ and other product names as trademarks in the Bahamas.

Aliv was subsequently licensed by Cable Bahamas to use the ‘liberty global’ term as a trademark through the Master Services Agreement between the two entities and a licensing agreement.

“In or about February 2017, Aliv began advertising its suite of prepaid international plans with the name ‘liberty global’, pursuant to which BTC now alleges unauthorised use and infringement,” Aliv’s PPM document said.

“It is Aliv’s position that the words ‘liberty’ and ‘global’ are common words in the English language, and that BTC/Liberty Global does not have monopoly rights over the said words, and that consumers in the jurisdiction are unlikely to be aware of the name ‘liberty global’ or to associate it with BTC.

“Accordingly, Aliv will continue to advertise its Liberty Global Haiti plan.”

The trademark dispute indicates that BTC and Aliv will not just be battling for market share and subscribers, with the imminent arrival of number portability - targeted for April 25 - set to further intensify competition between the two.

The ‘Liberty Global’ battle also raises the possibility that two companies, both with large Government shareholdings, will be fighting in the courts. Besides its 49 per cent equity stake in BTC, the Government also currently holds the 51.75 per cent majority in Aliv via HoldingCo - a stake that it and its advisors are seeking to sell to private investors.

Aliv, meanwhile, acknowledged that Liberty Global has “greater scale” than its parent shareholders, and could present a formidable competitive threat should it choose to “operate aggressively” in the Bahamas through BTC.

“Liberty Global has management and operational control of BTC, which is our competitor in the Bahamian islands; an operator with greater scale who could operate aggressively in this market,” Aliv told investors.

“In addition, BTC is partially owned by the Government of the Bahamas and is the incumbent fixed-line provider. This relationship may provide competitive advantages not available to us, including greater economies of scale, the ability to offer bundles of services and subsidies of the mobile business with profits generated by the fixed-line business.”

Aliv, though, will be relying on the expertise and skills of its management team, many of whom are ex-Digicel and have direct experience of going into Caribbean mobile markets as the second entrant, to counter this.

The new mobile operator invested $116 million to build-out its network infrastructure through to end-2016, incurring net losses of $16.9 million for the half-year period amid its start-up period.

“During 2017 all of our energy will be focused on achieving both our financial year and calendar year targets, and driving towards 50 per cent market share within three years by widening our available market through the offer of business specific offerings (launched 22 February, 2017) and taking advantage of number portability, which will occur on 25 April, 2017,” Aliv said.

“Our primary objectives until the end of June 2017 will be customer acquisition and increasing average revenue per user (ARPU) growth, and rolling out our network to the other islands in the Bahamas.”