[EP 025] Common Mistakes People Make in the area of Trade marks

It's super important for us to be talking about the mistakes that people make in the area of trade marks because we see the issues that come out of these mistakes on a daily basis.

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JOANNA: Hi, it’s Joanna Oakey here and welcome back to Talking Law! Today we are talking about the common mistakes that people make in the area of trade marks. And today I have invited along a very special guest Grace Yi, who heads up our trade marks division at Aspect Legal. Hi Grace, thank you so much for joining us today!

GRACE: Hi Jo, it’s a pleasure!

JOANNA: This is a really interesting topic. It’s super important for us to be talking about the mistakes that people make in the area of trade marks because we see the issues that come out of these mistakes on a daily basis. Right?

GRACE: Absolutely! These issues come across our desk so often it’s really important to talk about them.

JOANNA: It is! Absolutely! We’re all about trying to save our clients and our listeners on this show from some of the issues that we have seen in the past. So it’s useful for us to go through this common mistake list, and maybe in future episodes we’ll go through some of these areas in greater detail, but today we’ll just sort of hash through the main areas that people make mistakes.

Grace, what’s the first area that you think is the most common mistake that people make in this area of trade marks?

Trademark vs Company or Business Name Register

GRACE: Yeah, so I think that, and this is a very common misunderstanding that we see clients having time and time again, and it is this issue of thinking that by having a business name registered, a company name registered, or their domain name, that those things are enough to protect them when it comes to their trade mark.

JOANNA: Absolutely! Yes, you’re absolutely right, Grace. I think that probably is the number one mistake and misapprehension. People just don’t understand often the difference, right?

GRACE: Yeah. The problem is that these registrations are simply identifiers or with your domain name it’s just your web address. And they’re things that are compulsory, so quite often, I guess what’s happening is when a business is starting up they’re ticking off those compulsory items. But it’s just an identifier with ASIC. They don’t actually prove the ownership of those names. It’s really a trade mark registration that is going to provide that evidence that you have ownership of the brand.

JOANNA: Yeah absolutely. And so people often think they register a business name or a company name and that will stop anyone else from having a similar name. But I guess what we see is that business and company names can be registered in ways that are very similar to other business and company name registrations.

GRACE: That’s right. So the ASIC register operates separately from the trade marks register. ASIC and their rules, when it comes to allowing similar name to be registered, are very relatively loose. They will allow a name to be registered if it’s got a slight word added at the end of it. So a very generic word like group or association or Australia or something like that and a similar name can get through. They’re not thinking about IP rights in any way at all.

JOANNA: Absolutely. I guess it might be really useful if we can give our listeners a flavour of some of the examples of the issues that we see caused by this mistake in understanding of where trade marks versus business and company names lie.

GRACE: We see time and time again of businesses coming to us and they might have been trading for years and years and years. And in that time another similar business has gotten registered unbeknownst to them. And then when it comes to registering their trade mark, they find out that they’ve actually got a trade mark registered as well. That causes all sorts of issues and can potentially mean that the original client can’t even get their trade mark registered. The worst case scenario, if you’re in that situation, and you’re forced to actually change your name, which of course is extremely costly and of course can be heart-breaking, because you’ve built up so much goodwill and you’ve spent so much time and your business is your baby, and you had it for all those years and having to change your name can be extremely costly. So we’re talking about really big consequences here and it could all have been prevented by addressing the issue of your trade mark protection right at the beginning.

JOANNA: And as you’re talking, I’m thinking of an example of one client that we’ve dealt with who had had a discussion about trade marks prior to the time of speaking to us about it. But I recall that we had worked out if they had come to us at the time that the initial discussion they would have been fine. But because they left it six months later to actually contact us, it made all the difference to them in their business.

And I think in that instance they’ve been trading for more than a decade. And then in the end they ended up having to stop using their mark, right? Even after using it for more than a decade.

GRACE: Yeah. It’s really problematic isn’t it? And because the trade marks registry is a live register really is first in, best dressed and then things are being updated in real time, so a day can make all the difference. And I guess that’s what people really just need to know and understand.

JOANNA: Yeah, I think that’s a really good point. Absolutely. And as you are talking I’m also thinking we’ve also got a financial services company that had traded for around about eight years and then discovered a competitor who had started using the mark later. This is a crazy thing. I think that people don’t quite understand how crazy it can be, that even if someone has started using the mark later, if they have got on the trade marks register before you, it can cause a world of pain.

GRACE: Absolutely. It just speaks so much more expensive when it comes to doing the registration. And it can potentially cause really big hurdles. And in the worst case scenario, it might mean that you can’t get the trade mark registered at all.

JOANNA: And even if you can, I guess there goes your monopoly rights. You can’t stop that other party from using the mark once they’ve got a trade mark registered, unless you’re willing to make an application to the federal court to have their trade mark removed. But you’re looking at hundreds of thousands of dollars then, right?

GRACE: Absolutely yes. So delaying really means that you have the risk of not being able to get a trade mark protected at worst, and at best you lose the exclusivity of your trade mark in the marketplace.

JOANNA: Yeah, absolutely.

GRACE: That is really, especially if you’ve got a very distinctive name, that could be a real problem.

JOANNA: Yeah, absolutely. I think you were telling me you had a discussion recently with someone who had in a previous role from their current role had witnessed first-hand the cost of trade mark disputes that that can be caused. Yes. And so when they move on to a new employer, they identified correctly that the trade marks that hadn’t been registered for that organisation were creating such a high level of risk. We see it all the time. It’s hard for us to be able to communicate the risk effectively until people see it for themselves.

GRACE: Yeah. It was a really good working with that particular client because she just really understood and had experienced first-hand the time and money and stress that can be caused if you’re involved in a trade mark disputes, and anything that involves the courts obviously takes up just it can go on and on for years. And during all that time it’s up in the air. You don’t know what’s happening with your brand. And because she had seen that first-hand and she knew that it could have all been prevented if that previous trade mark owner had had it protected with her new employer, she was very keen and proactive about making sure that the company’s brands were all very thoroughly protected. So she’s all armed up if that situation ever occurred.

JOANNA: That’s it! She’s all sorted now. Prevention as they say is much cheaper and easier than having to deal with the cure later on.

GRACE: Absolutely, yes.

JOANNA: Great! Right. Ok, all right so that’s the first common mistake. What’s the second most common thing that you see, Grace?

Failing to do a Proper Search

GRACE: Yeah. So time and time again we see clients who have used a brand without ever having done a proper search. So they’ve picked a brand They’ve gone and gotten registered with ASIC as a business name or company name if it is their business name or company name, and they’ve never bothered to check the trade marks register to see if somebody else is already using that mark.

JOANNA: Yes, that’s interesting isn’t it? Because we often see lot of organisations involved in rebranding, not completely understanding the imperative of the trade mark searches as part of the concept development process.

GRACE: Yeah. Yes it’s alarming actually to see that a lot of designers and I guess that’s what you’re alluding to, that they will provide their clients a list of brand concepts and they won’t even have considered whether it’s registerable as a trade mark.

JOANNA: Yeah. And that’s unfortunately where we come in. We hate to be the bearer of bad tidings but when we’re involved at that late phase I guess the issue that we often grapple with is here are people that have come up with something that they think is a fabulous brand. But here at the brand development phase is the most vulnerable phase for a business when they don’t have anything to protect them if someone argues that they have infringed their mark by using this new brand that has been created. I guess that’s really the issue isn’t it? What do we suggest organisations do if they’re looking at rebranding or indeed if they’re an organisation that is involved in rebranding for other businesses?

The Perfect Time to Act on Your Trade mark

GRACE: Well, actually that rebranding time is the perfect time to be acting on your trade mark and getting it protected and getting it looked at properly. And we love it when people come to us at that stage because we can help them to get it protected and we can also do all of those proper searches to make sure that they’re not, by using that name or choosing that name, infringing on somebody else’s trade mark rights.

And if you do involve us at that search stage, we’re much more likely to be able to help you settle on a name that is more likely to be registered and get registered, and then even after registered more likely to be a mark that you’re able to stop other people from using because we can help you to work out a name that is much higher in distinctiveness.

JOANNA: Absolutely. And look I think that’s another issue that people don’t understand. There’s obviously the infringement side of things which is a really important thing to make sure you’re not at risk of an infringement action against you. But then on the flip side there’s also this discussion about what marks are inherently protectable because often businesses don’t understand that marks that are highly descriptive are very difficult for them to ever get protection for and very difficult for them to stop competitors from using as well.

GRACE: Yeah this is where I can start to sound a little bit legal. But with trade marks, they fall somewhere on a spectrum. And we’re talking about now the legal test that a trade mark has to pass for it to be able to be granted registration by the trade marks office.

When I talk about this spectrum, we are thinking and talking about the spectrum on one end being highly distinctive, highly unique trade marks. And we want as many of our clients’ marks to be up that end. And on the other end of the spectrum are really generic words that describe a characteristic of the goods or services that are being provided under the trade mark. So most marks are going to fall somewhere on that spectrum.

JOANNA: To summarize that, so we have distinctiveness and originality on the one end, and we have descriptiveness and generalness on the other end, right?

GRACE: That’s right. And what happens is if you pick a name that is much too far up the generic end, it’s very difficult to get registered and it’s also very difficult to get other people to stop using the words contained in that trade mark.

So the earliest that you come to us, and if you’re at that brand development stage, we can discuss with you all of these issues before you start using it. Because quite often you’d be amazed how many clients come to us and they’ve been using such a generic trade mark, it can never be protected.

JOANNA: Yeah.

GRACE: Never be protected with the registration no matter how long they’ve been using it and it’s a difficult position to be in.

JOANNA: Yeah, I’m thinking here of the number of clients but one sticks in my mind of a business that had been using their mark. They were a retailer but had developed a lot of goodwill in their market. But they’ve been around for what I think a few decades so you know 20 or 25 years I don’t know if you remember, Grace,

GRACE: Yes I do!

JOANNA: The one I’m thinking about. But I guess that was one of these very unique situations where we haven’t been able to get trade mark for a client, which doesn’t happen very often. But this particular instance, the mark was just so incredibly generic. And that’s it, they’re in this position where they just cannot stop traders that are using similar descriptive generic type names.

GRACE: And that’s a problem because what happens then is other people could call a similar product and use similar words to name their product. And it’s going to cause market confusion. And it’s a problem.

JOANNA: I think in that instance they’re having a lot of web traffic that was leaking to these new competitors that had popped up using a similar name that was also very descriptive.

GRACE: Absolutely!

JOANNA: Yeah. Okay, so it’s all about choosing and then making the right decisions when you’re choosing a new name, and talking to people who understand what decisions will impact your ability to protect yourself from infringement actions and to stop other traders from using a similar name in the market into the future.

GRACE: Yeah, absolutely. And I might mention there, this is a topic, this is a bigger topic that we might discuss in another time, but if you have already started using a name and you’ve been in your business for a long time and you’re not sure, you should still come and speak to us because even if it is something that might be considered a little bit descriptive, we can still help you to do the best that we can in terms of getting that protected in some shape or form.

JOANNA: Yeah, and I guess this comes to the next mistake that sometimes people think that their mark might be descriptive, so therefore they aren’t going to be able to get protection. They give up too easily.

Of course, we’ve said there is an issue if you choose something really descriptive you may not be able to get up a mark, but we’re not saying don’t try. Because there are benefits for businesses who have a somewhat descriptive mark in having a trade mark registration because it’s much easier to stop traders who are using similar names if you indeed have a trade mark registration particularly if it is somewhat generic or descriptive, than if you don’t.

GRACE: Absolutely. And it’s not black and white. It is a complex area. And as I mentioned it’s a spectrum. So it’s grey and it can be argued and we’re there to help you because it is a complex area.

JOANNA: Yeah. OK. All right. So what about the next area, Grace? What’s the next main headline area that you think people make mistakes in the area trade marks?

GRACE: So sometimes we see clients come much later in the process. And what we find out is that they have actually taken the step of protecting their trade mark registration and doing the trade mark registration themselves. And what we discover is that quite often they’ve registered the trade mark in a way that could have been done in a better way. So they haven’t registered it properly and there are lots of elements of a trade mark registration that can go wrong. And the problem is that quite often the reason why they’re coming to us is because it’s now time to enforce their trade mark rights and obviously that’s when the rubber really does hit the road and the trade mark registration is being tested. And what we find out is sometimes they’ve registered a mark that wasn’t the exact mark that they’re actually using. The registration should have been done for something slightly different or they’ve protected the trade mark in the wrong class.

A class is a category of the goods and services that are provided under the trade mark and sometimes they’ve just got it wrong or they could have been better sitting in a different class. And sometimes we find out that the specifications, which is the wording that is used to describe the exact goods and services that those that wording isn’t the best it could have been to give them the best protection under the mark. And so these are all very common issues that can go wrong when people take a do it yourself approach. It might seem easy but it can get complicated. And so these are all things that we help with trade mark registrations for our clients.

JOANNA: Yeah I think that’s a really interesting point because I often have this discussion with businesses about trade mark registrations as a whole and I think the most important thing, the thing that can be forgotten is understanding why they want a trade mark registration in the first place.

Often people go about the trade mark registration process, whether it’s themselves or with other professionals who perhaps aren’t expert in the field. And because they don’t properly understand what they’re actually trying to get out of the process, they make the wrong decisions along the way. And it’s not just about getting the right specification or a specification that’s broad enough in the right classes, but it’s also about making the right choice about whether or not you’re protecting a word or the logo or a combination of the word and the logo and what entity should be sitting in.

As you rightly say, there’s so many mistakes that can be made in the process. But it’s really sad when we see at the enforcement end, organisations who have paid a lot of money for trade mark registrations but only to find that the registrations don’t provide the protection that they had wanted, which often is to stop competitors using a similar mark.

GRACE: Absolutely. And the scary thing is that you can have a false sense of security, thinking that it is protected. And quite often the time that you find out is when it’s too late. Because it’s, it can be too late because it’s time for testing and as we mentioned the trade marks register is live. So you can’t go back and then fix back in time the registration that was done 10, 15 years ago.

JOANNA: You need a whole new registration at that point.

GRACE: That’s right. And the priority date starts the date that you file. So it’s really important to get it right and to think about these things properly at the time of application.

JOANNA: And as early as possible.

GRACE: That’s right.

JOANNA: You know getting in that application quickly as we said. There is all sorts of issues that can be caused by delay.

GRACE: That’s right.

JOANNA: Great. Ok. So tell us, take us through the next area of common mistake, Grace.

Stopping Others from Using Your Mark

GRACE: So a common mistake that comes from I guess an accumulation of all the previous mistakes and an area that we see quite often is when clients come to us and they’re in this position where they don’t have their trade mark registered or their registration is wrong or there are issues with their trade marks, and they’re trying to stop another entity from using their mark and it can be quite difficult.

These are the difficult issues that we find with clients, when they are in a position where another trader is trading with a very similar name. And it’s causing confusion and clients who think they are coming to customers who think they are coming to our client are actually going somewhere else. And it’s an expensive problem to have. And what we want to do is try and help our clients the best we can to minimize the issues that are going to be caused by that sort of problem coming up.

JOANNA: And sometimes we are delayed somewhat in being able to take action because quite often is important if we have then recognized that this organisation hasn’t got a protection in place, which makes it harder for us then to stop other parties from using the mark. Often it can be slowed down if we then need to go through the process of protecting the mark before we start taking action against the other party.

GRACE: That’s right.

JOANNA: Particularly, if then issues in the trade mark application process arise. So if we’re having an issue getting through because they’ve waited for so long and now these other marks on the register that are cited, our hands can be tied in terms of being able to take action against these other traders until we’ve dealt with the trade mark registration issue first.

Act as Early as You Can

GRACE: Absolutely. And I guess what people don’t might not know is that the trade mark registration process is quite long relatively to other registration so business names and company names happen quite quickly. But the trade mark registration process is a legal process and takes a minimum of seven and a half months.

Obviously we can, depending on the situation, we can act earlier than that but it can be a surprise to people to know that it is a long process. The real take home message today is act early. Act as early as you can. And if you are in the situation where you’re choosing a name, come to us at that stage because that’s the best time to be thinking about your trade mark. And if there are issues that come up at that stage, it’s the best time to know, because if a search shows up that the use of that name would be an infringement to an earlier registered trade mark, it’s the perfect time to know because it minimizes the risk of you infringing somebody else’s trade mark.

JOANNA: Yes absolutely. Ok. All right. And look I think that probably ties into the last area that maybe you would talk about today in terms, yes, of common mistakes that people make is once they have a trade mark registration, not enforcing their trade mark rights. Because this is something we see often happen and often create issues right? Getting the trade mark registration isn’t the end. If organisations recognize that there are infringements of their mark, they need to act on those.

GRACE: Absolutely, so it might be another common misunderstanding, and of course, we’ll help our clients to be aware of this. But once you’ve got your trade mark registered, you have to be proactive. You have to keep an eye on the market and be aware of other traders, who are using similar words or elements in their branding, and you have to take the steps of making sure that they’re aware that you have trade mark rights in that name. And the trade marks office, IP Australia aren’t going to do those steps for you especially when it comes to other traders using unregistered trade mark.

It’s really important that people be aware that once you’ve got your trade mark registered it’s not the end of the story. You have to stay on top of it and be vigilant about making sure that people don’t infringe on your trade mark rights, and therefore eventually, end up watering your trade mark rights.

JOANNA: Absolutely. Look, I think there are some cracking insights there, Grace. Thank you so much for sharing all of those insights. The action steps then if we’re going to make this as simple for our listeners as possible are to avoid these common mistake. Well, I guess the first one you’ve said it a few times, Grace, but I guess probably the first one is act as early as possible, right? Getting there.

GRACE: Absolutely. Act as early as you can. The best time to do it is when you’re thinking about some brand ideas at the design to development stage. That’s the best time. It’s the best time to be doing the searches and getting the registration all done properly.

And then a next action item would be to do a search before you start. The search is really going to inform you on the landscape out there and tell you what are the trade marks there are that are already registered. And it’s also the time when we’re going to be doing a thinking about the best filing strategy for you. So we’ll be helping you to work out what the best way is of protecting your trade mark.

JOANNA: Yeah absolutely. And because sometimes people don’t realize how critical that searching process is. Perhaps to an untrained eye looks fairly simple but there’s so many nuances in the searching process that is absolutely critical that this is done well and thoroughly right in the beginning before you get a trade mark application on because once that application is properly on, it is a public record. So if you’re infringing someone else’s mark and you put on an application that’s it you’re in and you’re on. So you need to make sure you’re not infringing before you start.

GRACE: Absolutely, yes. And the search involves legal analysis and legal judgment. And it’s not something that I think can be safely done if you don’t know what you’re doing.

JOANNA: Yeah, absolutely. The third action step is probably just getting a proper registration. A registration that meets what your needs are or the businesses needs are into the future. And that has properly dealt with the right classes, the right specification, not too broad, not too narrow, the right ownership, the right decision about the filing strategy between word mark or logo or combination of the two. So I think a proper registration is that next action step.

GRACE: Yes. And actually that just makes me think of another point and that is that sometimes companies and businesses change their trade marks over time. So it’s worth revisiting this question now and again and having a think about whether the registrations that you own are still properly protecting you and it might form part of an annual legal review to make sure that your registrations are all relevant and up to date.

JOANNA: That’s a really good point. So maybe we should make action four. Action step number four, set your periods for annual reviews of your trade marks as well as your other intellectual property rights.

Don’t Sit On Your Rights

JOANNA: And I guess we should also say as part of that or maybe step 5 is to make sure your enforcing rights after registration to maintain the value. Make sure you’ve got an ear on the market and you take quick action if you’re aware of anyone infringing your mark.

GRACE: Absolutely, because no one else is going to do it for you. Problems can arise if you acquiesce or you sit back and allow infringement to happen. There have been cases where you know a party took years and years and years to get to the stage of enforcing their trade mark right. It caused hurdles for them in terms of being able to enforce their trade mark rights. So if somebody is infringing on your trade mark you should act as early as you can.

JOANNA: Yeah absolutely. And you know I guess added to the fact, that from a legal perspective it’s easy to stop someone from using a mark the quicker you act and it’s harder the longer you leave it, is also the reality of the commercial aspects of it which is it’s easier to stop someone that has invested less money in their own use of a mark rather than to stop someone who has invested a lot of money in their own use of a mark and they’ve had the time using that mark to build up their own goodwill under it. From our own experience in cease and desist actions, it’s easier for us to get enforcement and to get the competitor to stop the use of the mark, if they haven’t spent a lot of time and money invested in the mark that they’re using.

GRACE: That’s right. And that’s a successful outcome if we can enforce a trade mark for a client and very quickly and efficiently have that other competitor shut down and change their name very quickly. That’s a great outcome at the end of the day.

JOANNA: Absolutely, it is. Ok. Right. Well thank you so much Grace! I think we’ve really talked about areas that are super important for business owners to be on top of. Because these, the mistakes that we see on a daily basis, cost businesses money that they don’t need to be spending and time and energy and worry.

Quick Recap

JOANNA: Just a quick recap. In this episode, we talked about the common mistakes that people make in the area of trade marks. Mistakenly thinking that business names or company names or domain names are the same as trade mark registration or provide any sort of protection on their own. Using brands without proper searches. We talked about picking names at the brand development phase that can’t be protected or that might give provide a risk of infringement. We talked about starting the registration process too late which can make registration difficult, costly and sometimes even impossible. And we talked about the issues in not protecting the registration properly or in doing searches properly for particular trade marks.

And finally, we talked about the issues in allowing other similar trade marks to exist without you taking enforcement action or some sort of action against the other party to make it clear that they’re acting in breach of your rights.

If you would like more information about this topic, head over to our website at talkinglaw.com.au where you can get a free transcript of everything that we’ve talked about today. And through that website, you’ll also be able to download details of our lawyers at Aspect Legal if you’d like help with any of the items that we covered today.

And finally, if you enjoyed what you heard today, please pop over to iTunes and leave us a review.

Thanks so much for talking to us, Grace! We’ve been talking to Grace Yi from Aspect Legal, who is the resident trade mark expert. Thanks a lot, Grace!

GRACE: My pleasure Jo!

JOANNA: Thanks all for tuning in and we’ll see you next time.