How does a trade mark protect your business?
Most business owners I talk to have “get a trade mark” somewhere on their to-do list. They know that a trade mark promises to provide some level of legal protection for their business. But most people don’t know exactly what that legal protection is.
Getting a trade mark can be an expensive undertaking, so before you take the plunge it’s a good idea to know exactly what protection a trade mark gives you.
Registering your business name
When you start your business you’re required to register your business name with ASIC. The purpose of this registration process is to link your ABN with your business name and to allow your customers to find the details of your business if they need to. This registration does not give you ownership rights over the business name and while the national registration database may prevent other people from registering the same business name, it does not prevent other businesses from using your business name in another capacity, such as, as a product name, service name or tag line within their own business.
So registering your business name does not give you exclusive rights to use that name and does nothing to protect you from other businesses who might want to use your business name in another way.
That’s why we have a system for registering trade marks.
What is a trade mark?
Before we can look at how a trade mark can protect your business we first need to look at what a trade mark is. You cannot get trade mark protection for something that is not actually a trade mark.
A trade mark is defined in section 17 of the Trade Marks Act as “a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with by any other person”. This definition is very important and if your trade mark does not meet the requirements then you will not be able to get it registered. For a more detailed discussion on this topic take a look at my article: What is a Trade Mark?
You probably have a number of potential trade marks in your business: your business name, tag line, logo, product shape or colour, etc. If you want to protect every one of your trade marks then you’ll need to get each of them registered but most businesses make a decision to register the one or two trade marks that are most important to their business.
What protection does a registered trade mark provide?
As the registered owner of a trade mark you have the exclusive right (with some limitations) to use your trade mark as part of your brand for the goods and/or services you have specified on your registration. This means that another business cannot use your trade mark as part of their brand if they’re selling goods or services that are similar to yours. In most cases this will mean that your direct competitors will be prevented from using your trade mark in relation to their businesses.
Note that the description of goods and services you provide at the application stage of your trade mark registration will limit the scope of the legal protection your trade mark can provide. Therefore, it is extremely important to get this part of your trade mark application correct.
By having your trade mark registered, new businesses who are starting up in your industry will also be able to check the register and see that YOU have the exclusive right to use that mark. This means that it is easier for new businesses to avoid situations where they might accidentally use the same trade mark as you.
Having a registered trade mark also gives you the exclusive right to authorise another person or business to use your trade mark in relation to the goods and/or services specified in your registration. This situation might arise if you’re starting a franchise type business or are engaging in joint ventures.
Having a registered trade mark also allows the owner of that trade mark to take action against people who have used their trade mark without authorisation. It is possible to take legal action against another business if you don’t have a registered trade mark but the case for infringement is much more straight forward and easier to prove if your trade mark has been registered. And when it comes to taking legal action, if a case is simpler and easier to prove then the cost of taking that action will be lower.
And finally, a registered trade mark is a form of personal property (like a car) that can be bought or sold. This means that a registered trade mark is an asset of your business that has a value. For many businesses their registered trade marks can be the most valuable assets of the business.
Trade mark registration provides you with legal rights in relation to your brand that you would not have otherwise. But keep in mind that those rights are limited by the details set out in your trade mark application so it’s important to get this step right if you want the best protection possible.