IN BRIEF
The value of your brands
Sometimes, the truth hurts. Never is that more true than with a company's brand – despite being loyal to it for years, you might come home one day and find your brand in bed with another firm, and soon realise it was never yours to begin with. This can be particularly damaging to many companies, for whom their brands may be the most valuable assets they possess. Brands represent the vital assets of your company, whether they encapsulate the innovation of your goods and services, or provide premium margins that generate sustained profit growth. Either way, brands need to be protected against inherent statutory and commercial risks. As such, to keep your brand close, keep your knowledge of legislation closer, and ensure you address the following risks.
HOW BRANDS CAN BE LOST
Failure to register trade marks
The only way to obtain statutory proprietary rights in a brand is
to register it as a trade mark.Company and business name
registrations do not provide proprietary rights in those
names.Domain name registration merely provides a licence to use
that name in a particular domain space.There are certain inherent
rights which may be generated in unregistered trade marks but such
rights are often poorly defined and lack the statutory protection
provided by trade mark registration.
Failure to register in relevant classes
It is important that a brand is registered as a trade mark in all
classes for which the company uses the mark.Over time, a company
may begin using its mark for goods and services which are
significantly different from those for which the trade mark was
originally filed.The mark may therefore not be protected in those
new classes and third parties may then register their own similar
marks in those classes for which the company does not hold
registration.
Failure to register in relevant countries
The trade mark registration of brands is strictly on a
country-by-country basis.It is therefore possible for third parties
to "steal" the brands of other companies by registering
them in overseas jurisdictions.If a company has not yet used its
brand in those countries, it may not then be possible for that
company to register its brand as a trade mark in those
countries.
Failure to renew registration
Trade marks are subject to renewal every 10 years. Over that time,
companies may change their business addresses more than once.As a
consequence, trade mark renewal notifications from the Registrar
may go astray.In addition, the individuals within the company who
are responsible for renewal may have changed their work
responsibilities many times.Under these circumstances, the renewal
of vital trade marks may be over-looked and these trade marks could
lapse irrevocably.
Failure to use registered marks
In Australia, there is a statutory requirement that 5 years after
filing, a trade mark must be used at least once in any 3 year
period otherwise third parties can apply to have the mark
removed.The typical situation in which third parties apply to
remove such a mark is because it represents a barrier to the
registration of their own marks.
Non-use removal applications can constitute a serious threat to brands which are registered as trade marks.Once a removal application is filed, the onus is then on the trade mark owner to demonstrate that it has been using a mark which is substantially identical to the mark as filed.If the trade mark owner is now using a mark which has some distinctive element added or removed from the mark as filed, then that use may not constitute use of the registered mark.
In a non-use removal application, it is necessary for the trade mark owner to show use of the registered mark for all the goods and services for which it is specified, otherwise those goods and services can be wholly or partially removed from the trade mark registration.The trade mark owner must show use of the mark for those identical goods or services or "the same kind of thing" which is a relatively narrow concept which can be stringently applied by the Registrar.The Registrar does have the discretion to allow a mark to remain on the Registrar even though the statutory use requirements are not fully met.However, this discretionary power will only be applied in favour of the trade mark owner if the surrounding circumstances justify it.
The introduction of the "Raising the Bar" provisions in the Trade Marks Act has involved the implementation of more stringent administrative and evidentiary requirements on trade mark owners, making it correspondingly more onerous for them to defend such non-use removal applications.
Failure to identify ownership
Brands can sometimes be registered as trade marks in the names of
entities which subsequently become defunct. This can place the
validity of the registered trade marks in serious question.It is
possible for a trade mark to be validly used by an entity which is
not the owner of the mark but in these circumstances there needs to
be a demonstrable nexus between the trade mark owner and the trade
mark user based on express financial or quality control
requirements.
Defending your brands
It is important for companies to recognise that their brands are
valuable assets and care for them accordingly.When brands are filed
as trade marks, it is important to fully register them for all
existing and contemplated uses.A house style program should be
introduced to ensure the correct representation of those brands.All
registered trade marks should be systematically monitored to ensure
that they are fully registered in all relevant classes and in all
relevant jurisdictions.Brands should be the subject of regular
maintenance which should preferably be carried out by specialised
lawyers or attorneys.
The benefit of these protective measures is that they serve to protect the company's brands. Unlike many other commercial assets, brands generally appreciate rather than depreciate in value over time. Brand protection can increase the asset value of the company and allow the company to fully exploit its brands in the market place through advertising, premium pricing, licensing or assignment.
For further information, please contact:
Eric Ziehlke, Partner
Phone: +61 2 9233 5544
Email: ejz@swaab.com.au
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.