In this episode, we drill into the legal elements that are involved when you’re considering branding or rebranding because the brand development phase is indeed one of the most vulnerable periods for a business in relation to brand. To help us with this topic, we brought back our resident trade mark expert, Grace Yi.
- Legal Considerations in Branding and Rebranding
- What Can Go Wrong?
- Vulnerabilities in Brand Development
- Trade Marks: Your Sword and Shield
- Questions To Ask Your Creative Team
- Risks to Look Out For
- Legal Wrap Up
Today we are picking up on a conversation that we had a few weeks ago with Sophie Bartho, where we talked about the concepts of branding and rebranding and why organisations might want to consider rebrands.
So I thought that it was appropriate to now talk about the top legal considerations that organisations really need to be bearing in mind whilst they’re going through a rebranding process or indeed even if they’re branding for the first time. Because there’s a lot of elements from a legal perspective that really need to be borne in mind before you start down the creative route.
In order to talk about this topic, I have brought back our resident trade mark expert, Grace Yi from Aspect Legal who heads up our trade marks area.
Hi Grace. Thanks for coming along today again to talk about this area of branding and rebranding.
Grace: Thanks for having me Jo.
Legal Considerations in Branding and Rebranding
Joanna: Let’s start off perhaps with what is the issue. What is the issue from a legal perspective that organisations need to bear in mind if they are considering branding or if they are considering rebranding, any sort of brand development phase I guess?
Grace: Yeah. The issue that we see and we see it so often is that when you’re engaging a creative team, so your marketing team or someone who’s helping you to come up with this new brand or brand, even if you’ve got an accountant there who’s helping to register a business name for you, they may not be considering this from a legal point of view in terms of the trade mark elements.
Joanna: Yeah. One of the really interesting things is that we get a heavy enquiry line when we are looking at new trade marks for new brands, whether or not that’s rebrands or brand new businesses or product lines.
We get heavy enquiry where organisations have already started in the brand development process without thinking about the legals and then when they find out from us that they’re running into troubles, they’re having to go back and start this process all over again, right? Which leads to a whole heap of wasted time and expense for them. I think that’s really one of the huge issues that we really want to educate people about.
Grace: That’s right. If you don’t really think about these issues right from the get go, you’re at risk of wasting all that money that you’ve poured into coming up with that name. And really the risk is that you’re coming up with a name that’s unregistrable as a trade mark. Also, there’s issues of possibly infringing on somebody else’s name if you do decide to use that name and it’s got issues.
Joanna: Exactly. And I guess the reason that this can occur sometimes is that people are involved in this creative development, whether or not that is creative organisations themselves, whether it’s marketing or other creative organisations, or whether or not it’s as we said before just someone who is out there checking your business name register for you registering a business name. That might be your accountant or someone else who’s assisting your business from that perspective.
Usually these issues are created because they fall into this mistake of thinking that because there is a business name available that therefore means that this is something that can be utilised for you for a brand. I think that’s the first issue, isn’t it?
It’s this misunderstanding that creates this issue. Maybe let’s talk briefly about why that’s not the case. Why is it that a business name might be available but it may not be a good name from a legal perspective to progress with? Even though it’s available as a business name.
Grace: I guess fundamentally people need to be aware that the business names register or ASIC’s company and business names register doesn’t sync with the trade marks register. They operate quite separately.
You can have the situation where something is registered as a trade mark but not necessarily on ASIC’s register and you could have the opposite scenario I guess. What you really need to do is check both. You need to be aware of what’s out there registered as a trade mark.
Joanna: Absolutely. And I guess one of the other issues that we’ve seen over time is that people might search trade marks register but not entirely understand what they’re looking for. Because the trade marks register in fact looks quite simple on the face of it, right?
But that sort of covers a lot of complexity that sits under the surface. And indeed, we’ve had many people who have come to us before who think they’ve done a search of a register but in fact when we do a search we come up with a completely different result than they do.
Grace: Yes, absolutely.
Joanna: You know when we pick up associated classes or part words or phonetic similarities it turns out that even though they think there’s a mark there that they can apply for, they later find out that they actually wouldn’t get a registration or worse still that they might be infringing someone else’s trade mark and putting themselves in the line of fire of either A) having a change of brand or B) at worst, being exposed to being pursued for costs by someone who claims they are an injured party out of all of this.
What Can Go Wrong?
Joanna: Okay. I think we’ve sort of touched a bit on what the issue is. Maybe it might be useful if we talk a little bit about examples that we’ve seen because maybe this might be useful for our audience to hear actual examples because we have a lot of these examples right, Grace?
Grace: Yes. Unfortunately.
Joanna: That’s it. And I’ll just pause for a moment and say I think this is super important information for organisations who are out there helping organisations come up with names.
If you’re an accountant and you ever are engaged in registering business names for your clients, you really need to understand some of these risks. And once again, if you’re a creative services agency you need to understand this because your clients might be wasting their time and they could end up really annoyed with you if you haven’t been clear with them about how this process should really run, rather than brand development, creative development sitting in on its own.
The important way to approach this is involving Legals right from the beginning so you’re not wasting money. So let’s talk about some of these examples, Grace. What have we seen? What pops to mind of some of the more recent ones?
Grace: One that I might mention is a case where a client did come to us and they had engaged a creative team to come up with a short list of names. It turns out that the creative agency hadn’t even done the most basic checking of whether those names were available on the business names register.
So out of the list of five names that the creative team had come up with, our client had particularly fallen in love with one of the names, and it wasn’t available as a business name.
Joanna: Not even a business name?
Grace: Not even as a business name.
Joanna: Not even the old trade mark issue?
Grace: They hadn’t even done that basic thing. I guess from a client’s point of view, they don’t know what the creative team are doing or not doing. They just think it’s all being taken care of. So it comes as quite a surprise to them to know that if they hadn’t asked us, they wouldn’t have even been able to trade under the name. Yeah, let alone get a trade mark.
That’s an example where that was all a bit of a waste of time for them. Quite often, it is an emotional thing. They do get quite stuck on the name. They start to see themselves as potentially trading under that name. It can be a heartache to know that it’s not available.
Joanna: Yeah. I think it’s a fascinating thing. The good thing about that particular example is obviously they came to us when they were in concept development phase.
We’ve certainly seen a lot of examples where people have actually decided on a name, maybe registered the business name, started with printing off all their collateral and getting it all, with the design created, and then coming to us and then us saying hold the boat you’re at risk of getting sued by someone here because you’re too close to another mark.
I think it’s probably worthwhile, just one of the reasons perhaps we’re reminded to talk about this today in our podcast I think in the last couple of weeks we’ve had an example of a business who had spent probably in excess of $60,000 on brand development and then came to us to help with the trade mark. At that point, we had to tell them that there was massive risk with using the name that had been settled on by the creatives.
Joanna: And now it’s back to the drawing board for them. So that’s a lot of money to throw away.
Grace: Yes, unfortunately in that particular case I actually had that conversation with them and told them ahead of time that they should, before they lock in a name and spend that money, they should check with us first and do those the right searches. But they didn’t understand how important it was so it’s really important to understand.
Joanna: We can now direct them to this podcast, right? From now on, if you are directed to this podcast by us, this is why.
We’re trying to help you in that brand development phase because the reality is, the legal checking isn’t particularly expensive and certainly getting your trade mark registered will be cheaper than any other part of the component of your brand development process. But it’s just such an important and fundamental step isn’t that right Grace?
Grace: Absolutely. Yes. We always talk about trade marks as being insurance for your marketing spend and perhaps we could go a step further and say, getting these sorts of checks you shouldn’t even consider spending the money on the marketing to start off with until you’ve got these basic checks done.
Vulnerabilities in Brand Development
Joanna: Any other examples that you think might be useful just throwing out there to help people to relate? Because in the last two instances I think in fact in the first instance you were talking about I think that was an organisation rebranding was that right?
Grace: That’s right, that was a rebrand situation.
Joanna: And in the last instance we were talking about with this large spend on brand development. That was a new brand, a new product or actually that was a rebrand as well.
Grace: That was a rebrand too.
Joanna: That was also a rebrand. And I guess maybe we should go back a little bit and explain why organisations are particularly vulnerable when you’re using a new brand and this is a new brand whether or not it’s a brand new product or business or whether it’s a rebrand. So any type of brand development.
Grace: So the bottom line of why there is that risk of vulnerability when you’re using a new brand is simply because you don’t have yet any use under that brand so you don’t have any goodwill to rely on. You’re really relying on the rights that you would get from a registered trade mark.
Joanna: Yeah. So here you are exposed in the marketplace to other traders who might be using similar names. Once again, it can be very hard to pick up generally, organisations who are using similar names.
Of course the creatives will go through and find someone who is not using the exact name that they’ve come up within the URL and they’ll create all of those things. But it can be hard just by general searching to pick up similar names and that’s where we’re really seeking to provide protection from the trade marks regime.
Whilst we’re saying that this new brand use phases when you’re most vulnerable and indeed it can be most difficult to get a trade mark registration if there’s too much else out around that’s similar, trade marks actually provide almost the most protection at this point, right?
Grace: Yeah, absolutely.
Trade Marks: Your Sword and Shield
Joanna: Because it’s that once you have a registered trade mark in your hot little hand then that’s protection against organisations in the future accusing you of infringing their IP effectively.
I mean it’s not always as black and white as that.
But basically having a trade mark protection is one of the best ways that you can protect yourself in this most vulnerable period, when you’re using a new brand as well as the mere fact of doing the searches that go along with getting you the trade mark registration in the beginning.
Obviously the search phase is where we come up with most of the issues that our clients haven’t been aware of before we started down the process of helping them. So you’re at your most vulnerable when you are using a new brand.
Grace: I always say to clients because I guess a picture always, it’s worth more than a thousand words and it’s a concept that’s really easy to understand. Your trade mark once it’s registered for a business really acts like a sword and a shield.
It acts as a shield and that’s akin to what you were just saying just before. It protects you if you come up into a situation where someone is saying that they have an issue with you using your name, because it’s too similar to theirs. It acts as a shield to protect you. It can also act as a sword, because if somebody else is copying your name you can then go and attack them with your trade mark as you would with the sword.
So it does have that dual function and because trade mark registration gives you all the rights that are available under the Trade marks Act across the whole of Australia for whatever goods or services you’ve registered the trade mark in. You don’t have to rely on just your goodwill.
You don’t have to rely on proving the amount of use that you have of the mark which can be difficult sometimes because you could be geographically restricted or it could be restricted to the amount of time that you’ve used the mark . It just becomes a little bit more complicated. Having the trade mark registered is really the best way of protecting your rights in the brand.
Joanna: Yeah absolutely I completely agree with that and I think as I was alluding to before as well, the search process as well is such a useful element for businesses when embarking on a new brand because it really gives you a lot of insight into what else is happening across the board in relation to a particular mark or what might be similar to a particular mark that just can’t be found often in general Google searchings.
Grace: That’s right.
Let’s Take A Break
Let’s take a short break. When we get back, we’ll run through some of the questions you ought to ask your creative time during the brand development stage and we will also identify the legal elements that you ought to watch out for to avoid putting yourself or your brand at risk.
And that’s next! I’m Joanna Oakey and you are listening to Talking Law, a podcast brought to you by Aspect Legal
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Welcome Back! Earlier, we talked about the top legal considerations in brand development, whether it’s a new brand, new product or a rebrand. We also discussed a few real life scenarios of what can possibly go wrong when you don’t consider the legals during this vulnerable time of brand development. Grace then gave us this visual of how trade marks have a dual purpose of being a shield and sword in protecting your brand.
Let’s jump back into our conversation with Grace and identify the risks that you ought to look out for and the questions that need to be asked during the brand development stage.
Now, back to the show!
Questions To Ask Your Creative Team
Joanna: All right. So let’s talk maybe just briefly about what questions our listeners out there should be asking of their creative development team when they are having a brand created for them or in fact if you, listener, are a part of a creative development team or you’re an accountant that’s helping to come up with brands or anyone else that is assisting in brand development, what are the elements that should be thought about?
Grace: Yeah. You should ask them as a basic thing what searches they’re going to be doing as part of their service for you. You should understand what searches they are doing and what they’re not doing so you understand where the gap might be.
Joanna: Yeah. And I think another thing to add here is we have had examples of creative organisations searching registers and not coming up with perhaps the entire picture because it is a bit complex.
I guess the other question is, who is doing the search? Is it people that really understand what they are looking for from a legal perspective?
Grace: That’s right. Because doing a trade mark search is a bit of an art, it’s not a science.
Joanna: It is. Some people like our organization have been spending decades still perfecting. It takes a long time to get good at it. Okay, so what other questions should be asked in this in this phase?
Grace: Yeah. So find out if they are checking simple things like the ASIC’s register to see if it’s available as a company or business name. Check if they’re going to be checking online for you to see if there are other similar businesses out there with similar names.
Joanna: Okay. We’re making sure there’s a trade mark search. We’re asking for a proper trade mark database search. We’re making sure that there’s other proper checking like for example with the ASIC business name and company name registers.
I think it’s also ensuring that the team that you’re dealing with understand what makes a name capable of protection and if they don’t, obviously we can provide assistance as well. Quite often we work together with creative development teams to help them understand what makes a registrable mark.
If people are interested in finding out more about what makes a registrable mark, I think we’ve talked about that in some previous issues of Talking Law. We’ve talked about it back in Episode 29, where we talk a bit about a descriptive trade mark, what elements don’t make a good registrable mark. In other episodes of Talking Law, if you go back and have a look, we’ve also spoken specifically about what makes a registrable mark.
But maybe let’s run through it just briefly today Grace just to give people a quick outline.
Grace: Yeah, sure. So we’ve talked before about how for a trade mark to be registrable, it has to be sufficiently distinctive.
This idea of a trade mark being distinctive is a legal test. It’s something that the trade mark office and examiner will look at and consider. And so when a creative team or a client comes to us with a name and they want to know, is this likely to be registered as a trade mark? It’s one of the first things we think about. Is it sufficiently distinctive?
The sorts of marks that are distinctive are generally marks or if it’s a word mark where a mark that contains words that aren’t descriptive of a characteristic of the goods or services to be provided under the mark.
Joanna: Absolutely brilliant. Okay. The last element after all of this searching has been done, after the brand development team have come up with the mark on the basis of understanding what elements make a mark more likely to be capable of protection. We’ve got a mark that everyone’s happy with. We’re happy to go ahead with. What’s the next action step we’d recommend?
Grace: Yeah. If we’ve got to mark that we think is likely to not have issues, we’ll go ahead and prepare that application and lodge it with the trade marks office. If people come to us and they’re at this early stage, it’s great because we’ve done the searching where we think it’s likely to not have issues.
Once you’ve settled on a name and it’s a name that you’re happy with, we’ve done the searches we have a way of lodging your trade mark application where we can get quite a quick response from IP Australia with an initial examination report.
Joanna: Great. So we lodge the application. Of course I think it’s worth saying here that the application process itself can take quite a while. It can take seven months from filing or more to actually get a trade mark registration.
But one of the most important and critical elements is just making sure that you can actually get that application in from the beginning and that you get that initial response back from IP Australia to ensure that you’re most likely to get the registration when it finally finishes progressing through the application process.
One thing I think it’s important for us to throw out here is that we have seen issues raised from organisations lodging marks here in Australia where it’s not been apparent from searching in Australia that the brands are being used here in Australia but a trade mark search or indeed an application has revealed that international brands have registered them here in Australia. So that can create issues too, right?
Grace: Yeah, absolutely and I guess that can crop up as an issue during a phase of the application process which we should mention here and that’s the opposition phase of an application.
Essentially, that’s a two-month window after the trade mark has been accepted for registration where anyone who believes that they have a better right to your mark might oppose your registration.
Joanna: Good. So once it’s through the whole trade mark process then obviously you can then go and use the mark, you can use the little R symbol next to the mark, but you’ll know that you have protection now in this vulnerable phase of the first use of a new brand within an organisation or for a product.
Risks to Look Out For
Joanna: Any last minute warnings that we might have Grace for accountants who may not really have thought about this sort of process, if they’re registering business names for organisations, or creative agencies. You’ve certainly seen quite a few issues that have come in where they’ve been referred by the accountants or the creative service agencies who have had some understanding of the trade marks but they’ve not realised that in actually registering the names themselves before doing these checks, they’re creating the issues.
Grace: Yeah. Something we always tell clients is that once you’ve registered the trade mark, it’s really important that you use the exact trade mark that’s been registered.
Sometimes what can happen over time is that the brand might slightly change. It’s always important to make sure that you’re using the exact trade mark to avoid risk of your trade mark being attacked and possibly removed off the register for non-use.
Joanna: What’s the risks that accountants or creative development teams are running here if they are creating brands or registering business names for clients, doing these sorts of things without getting the right legal checking done. Maybe we should touch on what the risk is for these organisations.
Grace: Yeah. The risk is that they might be suggesting a name or registering a name, or asking their clients, or preparing a name for their clients to use that at worst can’t be used because they’re at risk of infringing somebody else’s IP rights.
The worst case scenario would be that they start to use the name and they’re actually told by another organisation that it’s too close to theirs and they want them to stop.
Joanna: Yeah. And it’s interesting because we’ve had a number of marketing companies come to us in the past to say they’ve received claims from clients that they’ve developed brands for and these clients have now received cease and desist letters and are holding them responsible for this. I guess this is important then to have this discussion with your clients at the beginning if you’re involved in creative development for your customers to make sure it’s clear that you’re not responsible if there’s issues in the future in relation to infringement actions.
It’s also important that your clients understand that there’s other elements that are required to provide them protections. If they don’t go ahead and if they decide that they don’t want to go down the path of trade marking or trade mark searches, that it’s clear that you’ve offered that to them, you’ve told them about it but they’ve decided not to take you up on it just so that you’re protected into the future if something were to happen and they were on the end of a cease and desist action and they were coming back to you because you participated in the services.
Grace: Yeah. You might address this either in a discussion with your client from the outset or you might even include this. Make sure you’ve included something about this in your terms and conditions with your client.
Joanna: Absolutely. Good. Thank you very much Grace for coming on board to talk about all of these issues today. Hopefully you, the listener, found it interesting.
Legal Wrap Up
Joanna: Okay. Well that’s it for today’s episode on the top legal considerations in branding, rebranding and brand development.
Just as a quick recap. The reasons why you would consider involving legals at the main process of brand development is that if you don’t, you might end up with a mark that infringes someone else’s intellectual property rights, or that is a mark that you can’t register or protect in a period when your organisation is the most vulnerable (i.e. that period when you’re using a new brand).
The way that you can protect yourself when you’re going through the brand development phase is to engage someone who understands what they’re looking for with brands as you or your creative development team is coming up with alternatives, effectively making sure that the concepts that are being brought to you are concepts that you can actually use without likelihood of infringing someone else’s mark and that you can actually use with the assurance that you’re likely to be able to get protection for the mark.
You need to think about that right at the concept development phase. Then you can happily proceed with choosing your mark and investing money in that creative development phase, once you’ve got a mark that you can actually use into the future with less fear of infringing others’ marks.
The next step as we talked about is trade mark registration if you then want to protect your rights in that mark. We will record a podcast into the future at some stage to talk more about the process because we’ve had a lot of people who are really interested in understanding what the process is and how long it takes. So we’ll talk specifically about that in some future episodes.
But until then if you’d like a bit more information head back to our earlier podcast. We talked about the 101 trade mark basics right back in Episode 5 and there we talk about the reasons for trade mark registration how the trade mark registration process works.
If you would like more information about this topic you can find a transcript of this podcast and a whole heap of other podcasts where we’ve talked about brand protection and intellectual property rights over at our website at talkinglaw.com.au. There, or on our website at aspectlegal.com.au, you can find a way to contact our legal team at Aspect Legal. Set yourself up a free 15-minute call and you can chat to us then about any marks or concepts that you’re thinking of at the moment.
Aspect Legal also has a number of concept development services that we can offer you if you’re an organisation that’s looking at rebranding at the moment. We can also offer these to accountants and creative development teams and any other organisations that are helping to come up with brands for their clients or to register brands for their clients by way of business name registration.
Those services we provide at quite low cost, but they just help in that creative development process in order for you to be assured of choosing marks that are more protective for you from a legal perspective.
All right great. Hopefully you enjoyed what you heard today. Hopefully you found that illuminating if you are on the process of branding or rebranding, or involved in any way in this area.
If you did enjoy today’s podcast, I’d really appreciate it if you could perhaps pop over to iTunes and leave us a review. Hopefully you’ll be back to join us next time. You’re listening to Joanna Oakey and Talking Law brought to you by the commercial legal practice, Aspect Legal. See you next time!