It is critical for businesses to ensure that they undertake due diligence before committing to a brand or new product or promotion.
Establishing a strong brand is crucial to business success. However, many small businesses overlook the fact that it is equally important to protect the integrity of their brands from infringement.
Picture this – you've just launched your own business, however, your excitement at the prospect of building it into a successful enterprise is dimmed when you learn that someone else is using the same trading name. Equally disastrously, you might find that the time and money you've invested into developing your brand in the marketplace is wasted as you are infringing on your main competitor's brand.
Unfortunately, in the busy growth stage of establishing your business, it can be all too easy to overlook the importance of not only registering your business name but also registering any trade marks associated with the business. However, a little research and attention to vital details like this can go a long way in preventing disappointment, inconvenience and even loss of capital.
The difference between trade marks, business and company names can sometimes cause confusion, however, it's important to understand the issues.
Registering a business name and company name does not give proprietary rights in the name. The registered trade mark holder holds the proprietary rights in the name.
For example, the registered trade mark owner has the exclusive rights to use the trade mark and authorise other persons to use the trade mark. Also, the registered trade mark owner has the right to commence proceedings and obtain relief for trade mark infringement.
The registered trade mark owner can sue a business or company name owner for trade mark infringement if the business or company name is the same as or similar to a registered trade mark and the name is being used in respect of same or similar goods or services covered by the trade mark registration.
Your brand name is a form of intellectual property (IP). Increasingly, IP is regarded as one of the most valuable assets of a business. It's therefore important to take steps to protect that asset, especially where you are contemplating selling your business.
So what exactly is IP?
Intellectual property is property that's a result of mental effort and original creative thinking and that has a commercial value. Inventions, artworks, designs, works of literature, logos, brands and creations are all examples of IP. The most common types of IP are patents, trade marks, copyright and designs.
In recent years, the laws protecting intellectual property have become increasingly complex so it's a good idea to consult a lawyer if in doubt about any issue.
Top five tips to protect your brand
Observing the following simple steps will go a long way in helping to protect the integrity of your brand, particularly in its growth stage.
- Choose your new brand carefully It is critical for businesses to ensure that they undertake due diligence before committing to a brand or new product or promotion. Ensure that any proposed new brand, product or promotion does not infringe on any other trader's IP rights. The last thing that a new or established business wants to do is waste valuable time and resources in developing a brand that they will later have to abandon if they discover that the chosen brand infringes on a competitor's or other trader's IP. This includes ensuring that any relevant trade mark, business name and domain name is available.
- Register your business name and brand name Your trading name and key brand names should be registered as trade marks. Filing fees are payable on lodgment of the application and will depend upon the number of classes in which you register your trade mark. Once the trade mark application is accepted by the body governing trade mark registration in Australia, it is advertised and a third party has an opportunity to oppose the application on specified grounds. If there is no opposition or an unsuccessful opposition, the application proceeds to registration. A certificate of registration is subsequently issued, with the registration process taking approximately 12 months. Initially, registration is for 10 years and a registration may be renewed every 10 years.
- Develop and document an IP policy and strategy Always ensure that your IP and brand portfolio is properly documented, regularly updated and responsibly managed. If your business has confidential information, this should be clearly defined. You should keep track of registration and renewal dates of trade marks and business names etc. If your employees or consultants are inventing or designing new products, ownership of these inventions or designs should be clearly spelt out in employment and other contracts.
- Audit your IP rights As your business and brand evolves, so should your IP portfolio and strategy. A regular review/audit will ensure your trading name and key brands are and remain registered. It's also important to review the classes of registration and assess whether these need to be updated. This involves undertaking searches on your trade marks/brand names to help identify traders or competitors using the same or similar marks.
- Be vigilant in protecting your IP Always keep on eye on your competitors' marketing and promotional activities through regular Google and other internet searches. If their activities seem to contravene your rights in your brand, ensure you act quickly.Carefully manage your social media presence and watch for any unauthorised use of your IP, which may damage or dilute the value of your brand.
Dealing with infringement
All businesses should promptly deal with or respond to any allegations of Intellectual Property infringement – delay in doing so may affect the relief you are entitled to.
The following steps outline the process of dealing with infringement:
- Investigate the issue and keep copy of any enquiries.
- Communicate send or respond to a letter of demand immediately. Consult your lawyer should you have any questions or concerns. The letter of demand should briefly set out the nature of your IP (eg registered trade mark; the alleged infringement, and the actions you require to address the infringement). Be careful, as it may be unlawful to threaten that infringement proceedings will be taken.
- Negotiate where possible a settlement of the dispute.
- Litigate - if there is no resolution, commence proceedings.
Registering your business name
Since 28 May 2012, the Australian Securities and Investments Commission (ASIC) has maintained the new National Business Names Register.
The new National Business Names Register does away with the old state-based system –your business will now be listed on an Australian-wide database.
If your business name was registered in a state or territory before 28 May 2012, you do not need to do anything until it is time to renew your business name.
Generally, you will need to register your business name if you carry on a business or trade within Australia and you are not trading under your own entity name.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.