Written by Gital Ben-Zvi, Alyce Evans and Jennifer Tutty, Principal
Every day, we encounter trade marks. You can find them printed onto the food and drink packaging sitting in your fridge. They’re embroidered into the labels and fabric of your clothing and shoes. They’re featured in ads, on products and in general conversation. Effectively, trade marks are everywhere.
Trade marks are used to distinguish goods and services from one business from those of others. Because of this, they form a core part of all successful marketing and branding strategies.
In this blog, we discuss why trade marks are so important to businesses and how to choose, register and use a trade mark to protect your brand.
But first, let’s go back to basics.
What is a trade mark?
A trade mark is a sign (sometimes referred to as a ‘badge of origin’) that is used by consumers to identify the source of goods and services. In other words, it is a way for consumers to distinguish goods and services provided by one business from those provided by others. If you own or run a business, it is your brand.
What can be registered as a trade mark?
Often, trade marks will be registered for words or logos. However, you can also trade mark slogans, colours, pictures, shapes, aspects of packaging, scents, sounds or a combination of these.
Trade mark rights
A trade mark gives the trade mark holder the legal right to use, licence and sell that trade mark. The more successful the business is, the more valuable the trade mark becomes. When a customer is choosing between similar products or services from a variety of companies, a trade mark can significantly influence this choice.
Classes of goods and services
Trade mark registration does not provide the exclusive right to use a trade mark in relation to all types of goods and services. When applying for trade mark registration, you are required to select specific goods and services from a total of 45 classes. Your selection must be based on the goods and services that your business actually offers or is planning to offer.
Why are trade marks important and does your business need one?
In terms of brand protection, there are several reasons why trade mark registration is crucial:
- Business names, company names and domain names do not equal ownership
Business, company and domain names do not provide you with any ownership in that brand name and you cannot use these registrations to prevent others from using the same brand name.
2. The registration will be on the public record
If your application for registration is successful, your brand will be listed on IP Australia’s Australian trade mark database. Members of the public can search for and see the details of the registration. In many cases, this is enough to deter people from choosing your brand name for their own new business.
3. Your brand will become a valuable business asset
Trade mark registration grants you legal title to the ownership of your brand. You will have an exclusive monopoly right to use your trade mark within your registered classes of goods and services. A registered trade mark is an asset that can grow in value with the reputation of your business. Like other assets, it can be purchased, sold, mortgaged and licenced to others.
4. You can stop people from using your brand
Once your trade mark is registered, you have a clear, legal right to stop other people from using your brand. Stopping someone else from infringing a registered trade mark is relatively straight forward and cost effective compared with trying to stop someone when you don’t have a registered trade mark.
5. You have a complete defence against trade mark infringement claims
If you have a valid registered trade mark, then this will be a defence to any infringement claims brought against you in relation to that trade mark.
Protecting your brand: How to get (and keep) a registered trade mark
To register a trade mark, you need to apply for registration with IP Australia. When an application is submitted, there is always a risk that it might be objected to by the trade marks office or opposed by another trader. Additionally, even after it is registered, someone may try to remove it because you have not used it sufficiently.
Fortunately, there are a few easy steps you can take to get (and keep) a registered trade mark.
- Make sure that your trade mark is not descriptive of the goods and services you offer
For a trade mark to be registrable, it must have the capacity to distinguish the goods and services of a business from others. Trade marks that are ‘descriptive’ of the goods and services that are being offered are often rejected. The theory behind this is that no one trader should have an exclusive right to use a trade mark, which describes the relevant goods and services it is being used for. As a general rule, anything that indicates the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services, will be considered descriptive.
2. Check that your trade mark is available
Before choosing a trade mark for your business (and applying to register it), make sure that there are no other traders using the same or a similar trade mark to sell the same or similar goods and services. Often, identifying whether your trade mark is available to be registered will require a professional assessment.
One of the biggest mistakes you can make in business, is launching a new service or product under a name which is already registered as a trade mark by another trader in the same classes. Not only will you have to rebrand, but you may be liable to pay damages to the other trader for infringing their trade mark rights.
3. Apply in the right name
It is critical to apply for your trade mark in the name of the correct owner. The rightful owner of a trade mark is the first user of the trade mark. So, for example, if you first started trading as a sole trader and set up a company later, the trade mark would need to be applied for in your name as an individual (sole trader), then assigned to the company. An error in trade mark ownership can render a trade mark registration vulnerable to cancellation and ineffective. Seek legal advice to ensure you get this right!
4. Think carefully about which classes to register your trade mark in
There are 45 classes of goods and services applicable to trade marks. When deciding which classes to register your trade mark in, it is important to consider which goods and/or services you offer or intend to offer under the trade mark.
5. Make sure you use your trade mark!
Although it sounds obvious, once your trade mark is registered, make sure that you use it! Registered trade marks that are not being used are vulnerable to cancellation by third parties on the grounds of non-use. If a non-use action is brought against your trade mark, you will need to show that you have used the trade mark in connection with the trade of your goods and services.
6. Use the ® symbol on your registered trade mark
Once your trade mark is registered you can use the ® symbol next to your trade mark, so people know that it is formally registered and cannot be used. This is an effective way to deter others from copying your trade mark and puts potential infringers on notice of your intellectual property rights in the trade mark. Unregistered trade marks may only use the TM sign next to their brand, and it is an offence to use the ® symbol next to an unregistered trade mark.
7. Consider obtaining international protection if you’re planning on expanding overseas
An Australian trade mark provides protection against infringement only within Australia. There is currently no such thing as a ‘global’ or ‘worldwide’ trade mark. Therefore, applying to register your trade mark internationally in countries where you intend to operate is a crucial part of overall growth strategy.
Some countries, including China, Japan and Thailand operate using the ‘first to file’ system as opposed to the ‘first to use’ system. A failure to register your trade mark in these countries in a timely manner may prevent you from using your trade mark in that country. There is also the risk that someone may file your desired trade mark in one of these countries, so that they can sell it to you for exorbitant prices in the future.
Written by Gital Ben-Zvi, Alyce Evans and Jennifer Tutty, Principal
Further Information
If you have any legal questions relating to trade marks or would like assistance in registering a trade mark for your brand, please contact us through our online form or via email at hello@studiolegal.com.au.
Photo by Kumiko SHIMIZU
DISCLAIMER
The information in this article is of a general nature. It does not constitute formal legal advice, and should not be relied on as such. Please see the full disclaimer in our website terms. Please contact Studio Legal if you are seeking advice about a specific legal matter.