Successfully navigating the complex world of trade marks often requires specialist knowledge because things are not always as you would expect. Trade mark expert Jacqui Pryor shares what you need to know.

For example, did you know that a trade mark exists whether it is registered or not?  Or that your registered business name doesn’t necessarily belong to you?  Or that you don’t automatically own your brand logo if it was designed by someone else?

Many business owners are unaware of or don’t know many things about trade marks—even seemingly obvious ones—that can materially affect the success and sustainability of their enterprises.

During my 20-plus years as a trade marks attorney in Australia, I’ve learned that a surprising number of people aren’t aware of even the most basic facts around trade marks – and this can have (and has had) severe consequences.   So, if you’re a business owner and want to increase your chances of success, let’s look at some of the things you may not know about trade marks, but which you definitely should!

A trade mark exists whether it is registered or not

A trade mark has a specific definition. It is a ‘sign’ that you use or intend to use in a way that distinguishes your goods/services from others in the market. Therefore, if someone is using a name, logo or slogan (or anything that constitutes a trade mark) (even if that hasn’t been registered with IP Australia) to distinguish and promote their business activities then they are using a trade mark. Simply they may be using it as an unregistered trade mark. That mark can still accrue certain common law rights.  In short, a trade mark exists with or without registration.

There’s no legal requirement to register a trade mark, but registration does provide official evidence of ownership as well as provide enforceable legal rights.   It is usually much harder to protect or defend an unregistered trade mark and prove common law rights.

In Australia, the ‘first to use’ rule determines who is the ‘rightful owner’ of a trade mark.

If you are the first person (or first legal entity) to use a trade mark in the course of trade and no other party has already used or registered that particular trade mark for the same or similar goods or services, then you may be deemed the trade mark owner.

However, as mentioned, relying on common law trade mark use and ownership can be challenging.  Without the irrefutable proof of ownership of the trade mark through registration, it can be expensive and extremely difficult to show that a brand has an established reputation and that the use of an identical or very similar mark by another trader is likely to cause confusion in the marketplace. More specifically, without registering your trade mark/s, your common law rights may require ‘proof’ that another party’s use of a similar name is likely to mislead or deceive consumers, or, that the use of that similar name amounts to a misrepresentation that leads to them ‘passing off’ as your business or somehow affiliated with your business or brand. Relying on registered trade marks does not require proof of any reputation, let alone a sufficient one.

In other words, trade mark registration takes the guesswork and the risk out of trade mark rights.

A registered business name is NOT the same as a registered trade mark

It is a common misconception that registration of a business name provides the business owner with ownership of that name and the right to use the name.

Whilst every business in Australia is legally obliged to register their business name with ASIC when trading under a name other than their own name, you will only have exclusive rights to that business name when you register it as a trade mark.  Importantly, if you use your business name as a trade mark (ie to distinguish your offering from another entity’s), you could find yourself infringing the rights of someone who has already registered that name as a trade mark.  ASIC presents a series of ‘check boxes’ for new business registrants to tick at the time of filing a business name application. One of these specifically notes that the business name could infringe a trade mark, which makes it difficult for businesses to later suggest they were unaware of this. Whilst we are all guilty of simply clicking through and ticking through these things, once you have done so you have effectively acknowledged you understand that your business name might not be safe to use in a brand sense.

This article on the importance of registering a business name as a trade mark gives more insight into this key aspect of IP protection.

Honest adoption of a trade mark is critical

If there is an allegation of infringement against you, or if you try and register a trade mark similar to an earlier registration, you may need to prove that you adopted the trade mark honestly and had no prior knowledge of the existing one.

Some people don’t realise that when they first select a name for their business, goods or services (not necessarily only when they’re applying to register it as a trade mark), they need to ensure ‘honest adoption’ of the mark.  This includes doing searches for marks that may be identical or deceptively similar.

In other words, when you initially choose a mark to distinguish your offering from another trader’s, you need to have done thorough research to ensure ‘honest adoption’.

Trade mark registration is not a defence to allegations of ‘passing off’ or ‘misleading and deceptive conduct’

Whilst trade mark registration is undoubtedly the first prize in terms of asset protection and security, you may not be aware that there is a common law tort in Australia which relates to ‘passing off’.  A tort is an act or an omission which causes another third party to incur loss or harm.

What is ‘passing off’ in Australian law?  Passing off is when another business essentially ‘trades off of’ an entity’s reputation that they have in a particular trade mark, resulting in a misrepresentation that damages that reputation.  Consumers are misled into believing they are dealing with another business even though there is no actual association between the two.

The passing off law serves to protect the reputation or goodwill that may be attached to a trade mark or business (whether registered or not) and aims to protect traders from this misrepresentation, but it can be difficult for a trader to prove that their goodwill and reputation is being harmed, that the other party is deceiving consumers and that their reputation has been damaged.

The passing off law can be enforced even if both trade marks are unregistered.  However, as touched on above, relying on these common law rights can be more difficult than relying on registered trade mark rights.

The use of the ^TM symbol deters others from copying

Many people believe that the trade mark symbol ™ can only be used against a registered trade mark. This isn’t so.

In fact, anyone can display the ^TM symbol on a sign such as a logo, brand name, tag line at any time – even if that sign is not registered.  It simply signifies that that sign is a trade mark and is being used as such.  We strongly suggest business owners conduct appropriate trade mark searches before adopting a new ‘sign’ and using the ™ symbol. Use of the symbol is optional and you can use it whether or not you intend registering your trade mark in the future.  Not using the symbol won’t invalidate your trade mark rights.

However, it is crucial to understand that use of the ^TM symbol doesn’t give your mark any level of protection against unauthorised use.  It can’t prevent others from copying or misusing your trade mark. However, using the ™ symbol when appropriate may deter others from adopting and using the same trade mark in the course of promoting their competing goods or services. If a trade mark is formally registered then the owner is entitled to use the ® symbol instead of ™ if they wish. The ® symbol represents that the trade mark is registered, and, the Trade Marks Act as operates in Australia actually prescribes that it is a punishable offence to use that symbol (or otherwise represent a trade mark to be registered) when the trade mark is not registered.

A business owner doesn’t automatically own their brand logo

Contrary to popular belief, you don’t automatically get the rights to creative design work when you engage a third party to do the work for you.

For example, if you create your logo yourself independently, you own the copyright.  However, if it was sourced from – or designed by – a third party such as a graphic designer, you will need written confirmation from the creator that copyright has been assigned to you. Some graphic designers may include a transfer of copyright ownership as a standard part of their terms and conditions, others may not and some may be prepared to assign those rights for a higher fee.

When creating logos via online logo creation websites, be sure to read the terms and conditions carefully. Some sites will make it clear that you simply do not own copyright in the artistic elements of your logo, and, may even make it clear that a logo created on their platform cannot be registered as a trade mark.

You can get some helpful insights on registering logos as trade marks from the blog section on the MMW Trademark Services website.

A final word

In the same way that you would seek advice from a specialist if you needed an expert medical opinion, a qualified trademark professional is the best person for skilled help with anything in this complex and often confusing field of law.

If any of these points have raised questions for you about your trade mark rights, please get in touch with our experienced trade mark team today.   You can also keep up-to-date with the latest in the field of trade marks by following me, Jacqui Pryor.

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