A trade mark can be many things to a business: a valuable business asset, a legal right, and a representation of how the owner/creator wants consumers to view their business.
Moreover, adopting a trade mark in the modern online market with forces such as “Adwords” (registered trade mark 1471066 to Google LLC) and SEO add to the complications when adopting a trade mark.
In the end, a business owner needs to be found by consumers but also have the business stand out amongst competitors. As the business evolves and grows, establishing the legal rights that accrue in the trade mark may become more critical as the brand becomes more successful.
Often these are competing imperatives, which can make adopting a trade mark a bit like playing hopscotch. In this article, we hope to provide a very high and general overview of considerations when choosing a new trade mark for a business.
In Australia, a trade mark is a sign that connects the goods/services upon which the trade mark is applied to the person who applied the trade mark – also termed a badge of origin. When thought of in this fashion, it is easy to understand why a trade mark is important to a business – it is a marker to consumers of the quality of the goods/services to which it is applied.
There are two types of trade mark right in Australia: an unregistered trade mark (also known as a common law mark) and a registered trade mark granted under the Trade Marks Act 1995. Although the owner of a common law trade mark can enforce rights accrued in an unregistered trade mark by passing off or deceptive or misleading conduct, such actions can be costly to enforce and onerous to establish, at least in part since reputation and/or misrepresentation or deception will need to be established. An unregistered trade mark cannot use the ® symbol.
A registered trade mark has many benefits. The use of the ® symbol is allowed, it is a transferrable asset and enforcing a trade mark registration is not reliant upon proving reputation and/or misrepresentation or deception.
However, achieving trade mark registration does have upfront costs since the Australian Trade Marks Office will examine the trade mark application against many legal criteria before the application can proceed to registration. Achieving trade mark registration is not simply a “rubber stamp” process.
Australia has a very generous consideration of what sign can be registered as a trade mark. A sign is defined under the TMA to include “…the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.”
A trade mark application will be assessed against legal criteria such as, but not limited to:
- whether a similar trade mark exists on the Register and as such if your sign if registered, may cause confusion in the marketplace, and
- whether the mark is not or has limited inherent adaptation to distinguish – also termed whether the mark is descriptive of the claimed goods services.
These are the main objections that we see when prosecuting a trade mark application for a client. The success or otherwise of overcoming these objections is subject to a number of factors such as the nature of the applied for mark, the claimed goods/services, and what other registrations are present.
For a client, navigating such objections will cost time and money. In a worst-case scenario, trade mark registration may not be achieved despite such investment.
Moreover, we find that success when trying to overcome such objections by legal argument alone is vanishingly rare in current trade mark examination before the ATMO. Ideally, it is best placed to try to avoid being faced with potential objections by adopting a trade mark that may not attract such objections.
A very recent decision of the Full Court of the Federal Court of Australia has highlighted the importance of conducting pre-filing due diligence, and in particular conducting a thorough trade mark search before adopting a trade mark. Importantly, a Google® search will likely not be considered a suitable trade mark search if you are trying to claim a defence to infringement base on your use of a similar trade mark as “honest concurrent use”. Nor is a search of a business name register suitable. It is prudent that prior to adopting a trade mark, a search of the Australian Trade Marks Register is conducted by a suitably qualified legal practitioner. Such clearance searches should also be conducted in any country where the trade mark will be used.
There is a temptation to adopt a descriptive trade mark for SEO optimisation and the like. What we find is that if a trade mark comprises one or more words that have a dictionary meaning that can vaguely, or even tangentially, be attributed to the claimed goods/services, an Examiner will issue a descriptiveness objection to the mark citing the dictionary meaning. Although the law supports that a trade mark can have a branding function and a descriptive function, the reality in prosecution is that persuading an Examiner that this applies to your trade mark may be a challenge. It is not impossible if there has been use of the trade mark, but again filing evidence of use to support your claim that an allegedly descriptive mark is performing a branding function is costly and carries a risk that there may not be sufficient evidence.
Adopting a distinctive trade mark can not only be advantageous to the trade mark examination process but can also help raise your business above the parapet. Some of the strongest trade marks are distinctive – think “GOOGLE”, “APPLE”, “NIKE”, “XBOX”, “LULULEMON”.
In summary, here are a few points to consider before you settle your heart on a new trade mark and invest significant time and money in branding:
- Check if another party has registered or applied for the same or a similar trade mark by conducting a search of the trade mark register in the country/countries of interest.
- Avoid adopting a trade mark that an Examiner may consider descriptive of the claimed goods or services.
- Seek legal advice before adopting a trade mark.
The above is not an exhaustive list nor substitute for legal advice, but we hope is a starter for those wanting to adopt a trade mark.