Why Registering a Trade Mark Is Important to Protect Your Brand
A business may invest substantial time and money developing its name, logo, reputation and market presence. However, using a brand does not necessarily mean that the business legally owns or controls it.
Registering a trade mark is one of the most effective ways to protect a business’s branding and the commercial value attached to it.
A business name does not protect the brand
Registering a company name, business name or domain name does not give the business exclusive rights to use that name as a brand. Those registrations serve administrative or operational purposes. They do not, by themselves, prevent another business from using or registering the same or a similar name.
It is therefore possible for a business to register its company name, business name and domain name, only to later discover that another party owns an earlier trade mark covering the relevant goods or services.
What protection does registration provide?
A registered trade mark gives its owner exclusive rights to use, and authorise others to use, the trade mark in relation to the goods and services covered by the registration. It can place the owner in a stronger position to prevent competitors and other parties from using an identical or deceptively similar:
business or product name;
logo;
slogan;
packaging design; or
other distinctive brand element.
Where infringement is established, remedies may include an injunction, damages or an account of profits.
Without registration, a business may need to rely on passing off or misleading or deceptive conduct under the Australian Consumer Law. These claims are generally more complex because the business must prove matters such as its reputation, customer recognition, misleading conduct and actual or likely damage.
A registered trade mark is a business asset
A registered trade mark is personal property and can become a valuable commercial asset, which may be:
sold or assigned;
licensed to another business;
used in a franchise or distribution arrangement;
held by a separate intellectual property-owning entity; or
included in a business sale, restructure or succession plan.
Investors and prospective purchasers may also consider whether important business names, product names and logos are adequately registered and owned by the correct entity.
Registration may help avoid an expensive rebrand
Before adopting a new business or product name, searches should be undertaken for existing and pending trade marks.
Discovering a conflict after a brand has been launched can be costly. A business may need to change its name, website, signage, packaging, marketing materials, social media accounts and contractual documents.
Early searches and registration can reduce the risk of investing in branding that cannot be safely used.
The application must be structured correctly
A trade mark application should identify:
the trade mark to be protected;
the correct legal owner;
the relevant goods and services; and
the appropriate trade mark classes.
The scope of protection depends on the goods and services included in the registration.
Businesses should also consider whether to register the business name as a word mark, the logo separately, or both. Registering only a logo may provide narrower protection than registering the underlying name.
Care must also be taken to ensure that the correct entity applies. A business name or trust is not usually a separate legal entity capable of owning a trade mark. Where the business operates through a trust, the trustee will generally need to be recorded as the owner in its capacity as trustee.
When should a business apply?
Trade mark protection should ideally be considered before:
starting a new business;
launching product or service;
spending substantially on branding or advertising;
entering a franchise, licensing or distribution arrangement;
expanding into new markets; or
preparing the business for investment or sale.
An Australian trade mark is generally registered for 10 years and may be renewed for further 10-year periods.
Protecting the value of the brand
A brand often represents the reputation, goodwill and customer recognition developed by a business over many years.
Trade mark registration does not prevent every possible dispute. However, it provides a defined legal right, strengthens enforcement options and helps convert the brand into a recognised commercial asset.
Businesses should therefore consider trade mark registration as part of their broader legal and commercial risk-management strategy.
This article is provided for general information only and does not constitute legal, taxation, financial or investment advice. You should obtain appropriate professional advice, having regard to your individual circumstances, before acting or relying on any information contained in this article.