Many businesses have taken proactive steps to rapidly reduce costs and share precious resources in response to COVID-19.
Established businesses have introduced new products (e.g. fashion designers crafting face masks instead of frocks, distilleries bottling sanitiser instead of spirits), and branched out into diverse trade channels (e.g. personal trainers providing live exercise classes online, restaurants creating interactive ‘cook-along’ experiences). For others, the pandemic has generated increased demand for their existing goods and services (e.g. online retailers, video conferencing software providers, and TV streaming platforms).
The changes have been rapid, and businesses have adapted quickly, but consideration of the intellectual property issues surrounding use of a new brand, or expansion into a new jurisdiction or product line should not be forgotten.
Trade mark protection is a relatively simple and cost-effective method of ensuring the exclusive rights in a brand or logo. These are our top ten branding tips for businesses that have pivoted due to COVID-19.
1. New brand during the COVID-19 pandemic? Don’t forget to register it
Business names, company names and domain names don’t provide any exclusive protection over the brand. They are no more than legal requirements, and they do not provide any exclusive monopoly. To have a proprietary form of intellectual property which grants exclusive ownership rights, you must have a registered trade mark.
In Australia, trade mark registration grants an owner the exclusive right to use or authorise the use of the trade mark for renewable periods of ten years. Registration allows the owner to bring an action for infringement against other parties using the same or a similar trade mark in relation to the same or related goods or services.
Without a registered trade mark, businesses must rely on the common law rights developed in their brand. These rights are harder to establish, especially when the product has only been on the market for a matter of months, and are limited by the geographical extent of any reputation. In comparison, a registered trade mark provides protection Australia-wide regardless of the geographical extent of the reputation developed in the trade mark.
Trade mark protection is the most effective way to protect your brand and ensures your hard earned money and time is preserved. If you’ve created a new brand during the pandemic, seek advice and trade mark protection as soon as possible to secure your monopoly.
2. New brand during COVID-19 pandemic? Did you check if others are already using it?
All too often businesses are forced to change their name and branding because they neglected to have the appropriate availability searches conducted prior to their brand launch. The implications of not conducting thorough searches prior to launching a new brand name can be crippling, especially for small businesses.
If a third party has a registered trade mark and you start using the same (or a similar), various consequences can apply. Most commonly, the owner of the trade mark could claim damages, or request an account of profits from your business. You may also incur the cost of destroying all goods containing the infringing name or pay for corrective advertising and legal costs.
These costs can be avoided at the outset if searches are conducted to determine whether existing trade mark registrations or applications exist. Along with trade mark searches, it’s important to have common law searches conducted to determine if third parties have pre-existing rights.
The cost of rebranding a business that has been operating for a number of years is far greater than the cost of conducting these investigations at the outset. If you have recently adopted a brand, now is a great time to conduct the correct searches and get your house in order.
3. Are you considering a common or generic name for your new product or service line? Perhaps it’s time to rethink?
Many businesses choose descriptive names or logos for their products or services, however these descriptive names are difficult to register as trade marks, and are often difficult to enforce. If you have the opportunity, it’s often best to choose a new and novel brand name.
If there are other people selling the same kind of goods and services as you and they are likely to think of, and want to use, the same words and pictures to help sell their goods and services, it is likely your trade mark will be difficult to register and protect at the outset. For example, it would be extremely difficult to register the word ‘childcare’ in relation to childminding services or a picture of an apple for apples.
The most notable exception is where a trade mark has achieved distinctiveness through extensive use over a long period of time. In this scenario, the trade mark may be accepted for registration despite any apparent inability to distinguish the mark from those of others. However, this strategy takes time, and can be costly.
Not all trade marks are good trade marks. Even if registration is achieved, descriptive names and pictures can be difficult to enforce against others as there are certain defences to trade mark infringement for descriptive use. It’s much easier to choose a distinctive trade mark at the outset so seek advice early and discuss what makes a good trade mark with your brand professional during the creation process.
4. Has COVID-19 prompted you to sell your product or provide your services in new international markets?
Unfortunately, many businesses assume their brands will be available for use and registration overseas when this is often not the case.
Before embarking on use and registration overseas, searches of the relevant overseas trade mark databases are recommended to determine if any existing trade mark registrations or applications exist. General searches should also be conducted to determine if any similar or identical marks exist which are not registered as trade marks.
An Australian trade mark registration does not provide protection in other countries. Trade marks must be filed on a country by country basis, so you should register trade marks in each key country your business operates, or intends to operate in within the next few years.
If your business has expanded to offer goods and services to customers outside of Australia (e.g. via the internet), you should consider international trade mark protection. Seek expert advice early, as a good international filing strategy can ensure maximum protection in a cost effective way.
5. New product or service line pivot? Have you got the right coverage?
If you’ve been innovating during the pandemic, you should take a moment to check if your new product line is covered by your existing trade mark registrations.
It’s important to secure additional protection for existing trade marks that have been applied to new or expanded goods and services. For example, a coffee roaster would typically seek protection in class 30 for coffee beans, extracts and beverages, however, it is unlikely that class 5 protection would have been sought at the time of filing for hand sanitiser. If the roaster has started producing hand sanitiser in response to COVID-19, further protection should be sought.
Similarly, a registration for clothing and fashion accessories in class 25 may not cover face masks. If new products have become an important part of your business, these should be reflected in your trade mark protection.
If re-branding has resulted in changes to existing trade marks, such as updated logos or product names, fresh trade mark applications should be filed to protect the goods and services under the new marks. Speak to your branding professional early to discuss your existing protection and whether further protection is required.
6. New logo – do you own it?
Most businesses assume if they pay someone to design a logo, they will own the intellectual property rights. While the general position is an employer will own the intellectual property created by an employee, the position with contractors is the contractor will own any intellectual property they create.
This is commonly overlooked. IP ownership should be considered at the outset and appropriate terms of engagement assigning intellectual property to the business should be executed before work commences.
If the copyright in a logo is not assigned at the outset, businesses may be forced to purchase the copyright in the logo from the graphic designer at a later stage (e.g. when selling their business to a third party). If the logo has been used for a number of years and a substantial reputation has been developed, a premium price may be requested for the assignment. Conversely designers may be charging a higher fee at the outset but not providing IP ownership.
It’s much easier, and cost effective, to ensure the IP is assigned at the outset so obtaining advice on the terms of engagement is key.
7. Has a third party started using a brand name or logo similar to yours as part of their COVID-19 pivot?
The Trade Marks Office does not monitor your trade mark registrations to determine if they are being infringed or used without your authorisation. It is your responsibility to monitor the marketplace and keep an eye on competitors to identify any unauthorised use, or infringement.
Many businesses have amalgamated their trade channels during the pandemic, particularly in the online space. Where traditionally ‘bricks and mortar’ businesses were far geographically removed from one another and therefore happy to coexist, they may now compete directly against each other for sales to the same online consumers via a website or social media.
Failure to restrain unauthorised use of your trade mark may result in the mark becoming difficult to protect or vulnerable to cancellation. Given this, it’s important to seek legal advice as soon as possible to determine the appropriate action for potential infringing marks or unauthorised use of a trade mark.
Equally, if you receive an infringement notice alleging your new business venture breaches an existing registration, a lawyer can advise on your rights and the best course of action.
8. Has the pandemic meant you are no longer able to operate, or use particular brands? Be careful, as not using trade marks for a period of time can leave your marks vulnerable to non-use removal
Any person may apply to cancel or limit a trade mark registration if the mark has not been used for any part of the goods and services claimed for a continuous period of three years. Use can constitute applying the mark to goods and offering, selling or marketing those goods, or providing services in conjunction with the trade mark.
As the pandemic continues, brand owners should review their trade mark portfolio on a regular basis to determine whether all trade marks have been used for the goods or services claimed. Owners should also keep accurate records and evidence of use of key trade marks so this can be substantiated in the event of a removal application.
9. What are others up to – are you watching?
Trade mark applications which have been accepted for registration are advertised for opposition purposes in the Official Journal of Trade Marks. It’s important for brand owners to regularly monitor the trade marks journal or have a ‘watching service’ in place to monitor any similar trade mark applications filed and accepted in your relevant jurisdictions.
A trade mark watch is an important commercial tool. If new trade marks are not opposed and proceed to registration, removing them from the register can be very difficult and costly. Your trade mark professional can provide information on a trade mark watching services, suitable for your business and brands.
10. Are you collaborating with other brand owners to promote your brand during the pandemic? Are you in control?
Trade mark protection is a proprietary form of intellectual property, and a trade mark should only be used by the registered owner or an authorised third party. If you are collaborating with other businesses and allowing them to use your brand, a formal licence to use can be granted. Licences should be documented in writing and can also be granted between entities in the same group of companies.
For a trade mark to remain registered it must be used or intended to be used by the applicant or someone authorised by the applicant. While an authorised user can extend to a large number of subsidiaries, owners must exercise control over what is done with the mark.
It’s important licences are documented carefully and correctly so the proprietary owner and the authorised user are known and appropriate arrangements are in place.
Conclusion
Even if your business has pivoted due to COVID-19 and not considered the trade mark issues identified above, it’s not too late to take action. McCullough Robertson offers a full service trade marks and brand management practice. We can help to maximise the commercial value of your intellectual property, and safeguard against infringement of those rights. For further assistance please contact a member of our team below.