Friday, 15th November, 2013

Ten things you need to know about trade marks

A trade mark is the legal term for what you might think of as a "brand"- the name of your business, or the name of a product or service you are offering. Trade marks distinguish one trader's goods and services from the rest, so they are important assets. If you are launching a new business or product, some early planning on how you will choose and protect your trade marks will safeguard you in the future, and avoid potential legal pitfalls.

1. Don't fall in love too fast.

It's easy to become attached to a brand name. Before you commit to using a new trade mark, it's wise to make sure no-one else is using it or has registered it as a trade mark. Otherwise you could be at risk of infringing their rights (and find yourself facing an injunction). A trade mark expert can perform a thorough availability search, and identify any obstacles your new mark might face.

2. Be different.

It will be easier to register your trade mark, and easier to stop other traders using a similar mark, if you choose something distinctive. This means, it doesn't describe the goods or services you provide - like, "YELLOW" for bananas - and it isn't used generically in the industry. Although it's tempting to pick a mark that tells consumers exactly what the product or service does, these kinds of marks are tough to assert ownership of.

3. Register your trade mark.

Registering your mark with the Intellectual Property Office of New Zealand will probably cost you a few hundred dollars (perhaps more), but it is worthwhile. If you haven't yet started using your mark, obtaining a registration is a valuable "placeholder" to put other traders on notice that you own the mark, and deter them from using a similar one themselves. Owning a registration also acts as a defence against trade mark infringement proceedings from other traders (although not against other Fair Trading Act and common law proceedings), and gives you standing to bring infringement proceedings against anyone using your mark without permission. Registrations last 10 years at a time, and can be renewed indefinitely. The oldest surviving trade mark registrations in New Zealand date back to the mid-1800s.

4. Same name, different trade.

Trade mark registrations only protect your mark for the goods and services you provide-for instance, if someone else uses a certain trade mark for their auto repair services, you might still be free to use and register it for your beauty therapy services or clothing line. Registrations are classified according to what goods and services they cover-for instance if you use your trade mark in relation to clothing, you would register it in class 25. Many trade mark registrations cover multiple classes for various goods and services.

5. Keep a paper trail.

If someone challenges your trade mark, or tries to make you stop using it, your chances of success may come down to the records you keep. Often in legal proceedings over trade marks, it is crucial to establish who first used a particular mark, and whether their mark has a reputation in New Zealand. Records of when you started using your trade mark, how much you have spent each year on advertising it, and how many sales of products or services have been associated with the mark, are all valuable pieces of information. You may never need it, but if you do, you will be glad you kept track of these details at the time.

6. Use it or lose it.

It's fine to register a trade mark even if you haven't started using it yet. But if you don't use it in New Zealand within three years of its registration date, your mark can become vulnerable to revocation. Basically, someone else can apply to the trade marks office to have your mark taken off the register. They might then register the mark themselves and begin using it. If you think your mark might be in danger, consult a trade mark expert for advice. If you start using your mark again before anyone tries to revoke it, it is likely you can avoid the risk of revocation (at least for another three years).

7. Planning on global domination?

A New Zealand trade mark registration only protects your mark in New Zealand. If you plan to export overseas, it is worth checking to see whether you will be free to use the same mark in your other countries of interest - and ideally, register your mark overseas. You can either file separate applications in each country one at a time, or file an international application through what is known as the Madrid system, designating all of the countries you want to obtain registration in. A Madrid application can be a significant cost at the outset, but it can reduce downstream expenses and make maintaining your trade mark registrations more efficient. Since every country has different trade mark laws, it is worth consulting an expert before filing overseas trade mark applications.

8. What does your registration protect?

There is a difference between registering a brand name, and registering your business' logo. A trade mark registered in plain block letters, with no stylisation or pictorial elements, gives you protection over those letters or words in whatever font or colour you may use. In contrast, protecting a logo or stylised word mark gives you protection for the visual elements of that mark. There are benefits in both. To achieve maximum protection, it is best to register your word mark in plain text, and register your distinctive visual logo separately.

9. What else can you register as a trade mark?

A trade mark doesn't have to be a word or a picture. You can register any "sign" that is capable of distinguishing one trader's goods or services from those of other traders. This includes three-dimensional shapes (like a bottle or distinctive packaging), as well as sounds, colours, animations and even smells. These non-traditional trade marks can be difficult to register.

10. Defend your patch.

If you become aware of someone else using a trade mark that is the same or very similar to yours, in connection with goods or services like yours, seek help from a trade mark lawyer - or if you feel confident, write to the interloper yourself. If you don't assert your trade mark rights, and instead allow others to use your trade mark, you may find it difficult to stop them later on. This will dilute your brand, and could confuse consumers. Someone else may even be able to register their mark alongside yours, by proving "honest concurrent use". A carefully-worded letter alerting them to your trade mark can often nip the problem in the bud.
 

 An edited version of this appeared in the NZ Entrepreneur November 2013 issue.