The value of any successful business is its goodwill. A business builds goodwill by carrying out its day to day operations. Goodwill is an intangible asset which may have a value attributed to it in the event you sell your business.
Much goodwill derives from the use of trade marks, therefore, protecting your business’ trade mark is crucial to ensuring its goodwill is maintained. The Trade Marks Act 1955 (Cth) (Act) provides the system for registering a trade mark in Australia. A trade mark may include any name, signature or brand which a business uses to distinguish goods or services dealt with in trade.
A registered trade mark provides the owner with a monopoly right to the use of that mark in respect of the goods and services under which it is registered. Rights in a trade mark may be enforced in the same manner as rights in other personal property.
Unregistered trade marks
There are rights to protect unregistered trade marks and business goodwill, but these can be difficult to enforce because they are primarily based on:
- the tort of passing off – the wrongful appropriation of another’s goodwill, by representing an association with that other’s business, products or services; and
- an action for misleading and deceptive conduct pursuant to the Australian Consumer Law.
The difficulty with pursuing these actions in respect of an unregistered trade mark is that, succeeding in any claim involves an examination of the whole course of conduct in relation to the subject trade mark, name and goodwill to establish ownership.
Further, registration of a business name or a company name does not provide any substantive protection in comparison to ownership of a trade mark.
Registered trade marks
Registration of a trade mark confers several rights and other benefits in favour of the owner that would not be conferred on the holder of an unregistered trade mark.
The benefits conferred upon successful registration of a trade mark include:
- the exclusive right to use and authorise others to use the trade mark, in relation to the goods or services for which the trade mark is registered, subject to any conditions or limitations imposed on the registration by the Registrar; and
- the right to obtain relief where the trade mark has been infringed, such as unauthorised use of the trade mark.
Where registration is granted, a company would thereon be entitled to enforce its rights in the trade mark, including by bringing action against third parties in circumstances where rights in the mark are being infringed.
Registering your business name as a trade mark will grant you exclusive right to its use. Accordingly, a registered trade mark will deter other businesses from using words and expressions that are nearly identical or similar in their business names.
Further, a trade mark is a business asset, therefore, the more successful your business becomes, the more valuable your trade mark becomes. A registered trade mark will also entitle you to sell your trade mark or licence it for others to use.
In the absence of any relevant defence, infringement of a registered trade mark occurs where either:
- the registered trade mark has been used without the registered owner’s authorisation in relation to goods or services in respect of which the mark is registered; or
- a person uses a sign as a trade mark that is ‘substantially identical’ or ‘deceptively similar’ to the registered trade mark.
Remedies available for infringement of a registered trade mark
The remedies available in respect of an infringement entitles the owner to damages or an account of profits. The court may also award additional damages if it considers appropriate to do so, having regard to the following factors:
- the flagrancy of the infringement;
- the need to deter similar infringements of registered trade marks;
- the conduct of the party that infringed the registered trade mark that occurred:
- after the act constituting the infringement; and
- after that party was informed that it had allegedly infringed the registered trade mark;
- any benefit shown to have accrued to that party because of the infringement; and
- all other relevant matters.
Conclusion
Registering a trade mark will afford greater protection to your business. Provided that a registration application is accepted, an individual would be entitled to enforce statutory rights associated with the trade mark against third parties for infringement. Registration is a prudent step to protect the rights to that name or brand and the associated business goodwill.
Further, a registered trade mark can be reflected on a balance sheet and sold as an asset in the event you sell your business.
Please contact Partner Peter Motti or Solicitor Emily Cooper for more information on how to register your trade mark.
This article may provide CPD/CLE/CIP points through your relevant industry organisation.
The material contained in this publication is in the nature of general comment only, and neither purports nor is intended to be advice on any particular matter. No reader should act on the basis of any matter contained in this publication without considering, and if necessary, taking appropriate professional advice upon their own particular circumstances.
