Don't walk away from your intellectual property
It is astonishing to note that more than 83 per cent of small businesses and over 64 per cent of large businesses in Australia have zero Intellectual Property protection (ABS, 2011). Intellectual Property protection and enforcement is crucial to any successful business. Many
business owners wrongly believe that if they register a company name or a business name, that they are automatically granted intellectual property rights to that name.
What is IP?
Intellectual Property (IP) refers to creations of the mind that are used in commerce. These creations can be divided into two categories: Industrial Property, which includes inventions (patents), trade marks, industrial designs; and Copyright which includes literary and artistic works such as novels, poems, films, photographs, paintings and architectural designs.
What is a trade mark?
A trade mark is a sign which differentiates one trader’s goods or services from those of competitors in the marketplace. Almost any kind of sign can be a trade mark – words, letters, numerals, logos, sounds, colours, shapes, and scents can all be trade marks.
Some prominent trade marks include the golden arches for McDonald’s, the tick in the Nike symbol, the “Oh what a feeling” Toyota jingle and the colour purple for Cadbury chocolates. Trade marks are protected by law to prevent competitors in the marketplace from making use of another trader’s brand, and consequently taking advantage of that trader’s goodwill and reputation in the marketplace.
Businesses, Build your Brand!
Every business has intellectual property worth protecting. Under Australian IP law, exclusive rights are granted to owners of these intangible assets. Brand means identity. And in the world of business and consumers, identity means trade marks. Trade marks enable consumers to identify what they are purchasing and consuming.
If you want to know how strong a brand is, then all you need to do is look at their trade marks. According to research conducted by BrandZ, the most valuable global brands in 2011 were Apple, followed by Google, IBM, McDonalds and Microsoft respectively. Think about the logos associated with each of these big brands. Each of these logos is protected by their respective owners through trade mark registration and enforced rigorously by their trade mark lawyers.
Other benefits of trade mark registration
1. Protection against unauthorised third party use of the trade mark.
2. Having a trade mark registration means that third parties are put on notice of the existence of that registration.
3. The trade mark owner is able to place the ® next to their registered trade mark.
4. Having a registered trade mark enables a more effective and efficient transfer of ownership or authorisation of use of the mark, such as by means of licensing or assignment.
5. Trade mark owners can place a Watch Notice at Customs for the goods in respect of which the registered mark is used (which will assist a business in protecting its goodwill and reputation from counterfeits and other infringing imports).
Tips and things to remember
1. Upon lodgement with IP Australia, a trade mark normally takes 9-12 months to proceed through to registration but when registered, the rights of registration apply from the date of lodgement.
2. Descriptive words or a generic name for a product or service are generally not registrable unless there is already a sufficient reputation. For example, it is not possible for the owner of a clothing store to trade mark the business name “The Best Clothing Store” as a trade
mark, unless the owner can show that their reputation in respect of this name is such that Australian consumers identify this descriptive name with their brand alone. However, there are many brands that have accumulated such use of their descriptive and generic marks such
that registration of a generic and descriptive trade mark has been granted. For example, McDonald’s slogan “I’m lovin’ it”.
3. If a registered trade mark becomes generic or descriptive, although it originally was not - such as “aspirin”, introduced to the market in 1897, and “heroin”, introduced in 1898 (both were originally trademarks of Bayer AG), the mark no longer indicates the source of the
product and may be removed from the register. To prevent this happening to your brand, the trade mark owner has a responsibility to make sure the registered trade mark is always used as a trade mark, and not as a descriptor of the goods/services it covers. Also, a trade mark owner must enforce their rights on any unauthorised user of their trade mark so that their registered trade mark does not become generic and removed from the register.
4. If you are an owner of a registered trade mark, you should conduct monthly searches to make sure that no one is “freeriding” on your reputation by using a mark similar to your own registered trade mark. The trade mark should also be used continuously; otherwise it can
become vulnerable to being removed from the register for non-use.
5. If you are an established business owner, and are continually reviewing and updating your brand, you should make sure that the updated versions of your logo are registered every step of the way. Shell Corporation has done this well and is a very powerful brand today.
6. It is also a good idea to continually add to your trade mark portfolio by obtaining trade mark registration for new products and brands as/ before these are developed and released into the market. Shell Corporation has successfully captured and capitalised on their intellectual property in this by obtaining trade mark registration for the following goods/services associated with their Shell business: “Helix”, “V-Power”, “Shell Express”, “Shell Direct” and “Go Shell”.
7. If you are planning to grow your business overseas, make sure you get your trade mark registered in that jurisdiction before you sign any licence, distribution or franchise agreement. You cannot grant someone a licence to use your name, brand and trade mark in a jurisdiction when you are not sure that you are entitled to exclusive use of that name, brand or mark. This is why “BURGER KING” rebranded to “HUNGRY JACKS” in Australia – it was not possible to use the “BURGER KING” name, brand and trade mark in Australia due to similar trade mark which had already been registered in Australia by another business owner.
The associated goodwill in a brand and trade mark is often a businesses’ most valuable asset. Brand power cannot be underestimated, especially in a day and age where most consumers are hyper brand conscience. There is a reason why trade in counterfeit consumer goods is a multi-billion dollar industry. Brands attract. Brands sell. In short, well-known trade marks mean well-known brands. So if you want to build your brand: make sure you have your trade marks registered!
Brand growth doesn’t happen overnight so don’t snooze, because you’ll lose. Get ahead of your competitors and talk to a trade mark lawyer today.
Jennifer Seo is a lawyer specialising in Intellectual Property at DC Stategy’s Legal Division. She has extensive experience in global trade mark portfolio management; trade mark right enforcement; and brand, trade mark, copyright & domain name protection.
Call her directly on 02 8220 8709 or email email@example.com
DC Stategy’s lawyers specialise in the practise of commercial law related to franchising including franchise agreements & disclosure documents, trade mark & intellectual property protection, licencing & distribution agreements, franchise code compliance & mediation, dispute resolution, franchisee reviews & business sale agreements, largely on a fixed fee basis. Contact them for legal assistance with your franchise business needs on:
Phone: 02 8220 8700