Australia: Understanding trade mark registrations: what are they really worth?

What you need to know

• Developing a sound brand strategy is important for any business in start-up mode or on the cusp of launching a new product or service.
• The value of applying for and securing formal brand protection through registered trade marks is often dismissed or overlooked, which has the potential to expose a brand to significant risk.
• For several reasons, formal trade mark registrations should be considered as part of any brand protection strategy – and should be considered early.

If you value your brand and truly want it to thrive, you really should protect it with a trade mark registration.

These words will sound familiar to anyone who has considered their brand strategy when starting up a new business, launching a new product line or bringing something fresh and innovative to market. There are numerous examples of the unquestionable value that can come from developing and protecting a brand with a well-thought-out brand strategy – just think of what Nike has achieved with its iconic 'swoosh', or McDonalds with its famous 'golden arches'.

But for various reasons, filing a trade mark application to secure formal and statutory protection is often either overlooked or significantly undervalued. "It's too costly and I don't want to spend the money right now", say some. "I don't need a trade mark registration, I can protect my brand well enough without it", say others.

These assumptions can be made easily and quickly, but they are definitely worth questioning. In Australia, as in many other jurisdictions, securing formal brand protection through trade mark registrations can be advantageous for a number of reasons.

Balancing costs

The idea of spending money to register a trade mark might be particularly daunting for start-ups, especially where there are other competing expenses at play in the early days of establishing a business. For some, obtaining a trade mark registration will be seen as a 'nice to have' rather than as a critical step in preparing a business for launch.

However, the costs associated with applying for trade mark protection in Australia are often overestimated. A trade mark registration remains the most cost effective statutory intellectual property right available in Australia.

Of course, the costs for securing formal protection of a brand through trade mark registrations can increase in circumstances where:

• a brand comprises numerous elements that are capable of being registered as trade marks under the Trade Marks Act 1995 (Cth) (Trade Marks Act) – perhaps a word, a logo, a colour and a shape – and numerous applications are filed as part of a 'scattergun' approach without proper consideration
• the person examining a trade mark application has identified an issue, such as a similarity to an existing trade mark on the register, that needs to be overcome before the application can proceed
• a third party opposes the registration of a mark and the applicant needs to defend that opposition before its mark can proceed to registration.

With a well-thought-out filing strategy, trade mark applications can be crafted with a view to protecting the most critical aspects of the brand or with specific and core goods or services in mind, and with a view to reducing the risk of obstacles arising during examination.

Ultimately, the up-front costs of applying for and securing a trade mark registration need to be balanced with potential costs that might surface down the track if an unauthorised party seeks to use or 'piggyback' off a brand, and you don't have a trade mark registration to rely upon and anchor any remedy.

Risks of not securing trade mark registration to protect a brand

In short, a trade mark registration provides a monopoly over the use of a sign (which might be, for example, a word or a logo) in connection with specific goods or services in Australia. The owner of a trade mark registration has a statutory right under the Trade Marks Act 1995 (Cth) to prevent others from using that mark, or something that is deceptively similar to that mark, in connection with the same or similar goods or services. The competitive advantage is clear.

Without a trade mark registration, a brand could be exposed in several ways:

• There may be an increased risk of competitors or other parties using your mark, or something that is deceptively similar to your mark. This could arise where:
• • a third party knows about your brand but feels more inclined to 'push the envelope' with the knowledge that you do not have a trade mark registration in your arsenal to object to their use
  • an 'innocent' third party has developed a brand very similar to yours and, having found no existing trade marks on the formal register, proceeds without knowing that there could be a clash or confusion in the marketplace.

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• Essentially, a trade mark registration helps to put others on notice that your brand exists, that you value and treat your brand seriously, and that you have a statutory right to protect it. In Australia, it may also 'block' others from registering a trade mark that is similar to yours, if your mark is cited as an obstacle during the examination of the other application.
• It may be more difficult and much more costly to successfully object to a third party's use of your mark, or a mark that is deceptively similar to yours. Arguments could certainly be made on grounds other than trade mark infringement, particularly the misleading and deceptive conduct provisions in the Australian Consumer Law or the common law tort of passing off. However, having a statutory right to rely upon under the Trade Marks Act can make a brand owner's life much easier when seeking to prevent others from using or 'piggybacking' off that brand.
• Others with an interest in the strength of your brand, such as potential investors in your business, may conclude that your brand is not as valuable as it would otherwise be if it were formally protected through trade mark registrations.

Key takeaways

To give a brand the best possible chance of thriving and carving out a desirable position in any market for goods or services, pre-emptive protection is key. Significant efforts to develop a strong and attractive brand at inception may ultimately be wasted if, down the track, it can be taken advantage of by third parties.

A sound strategy for trade mark protection, including filings for formal trade mark registrations, should be formed early.

This article is intended to provide commentary and general information. It should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this article. Authors listed may not be admitted in all states and territories