Avoiding trade mark blunders: What solo entrepreneurs need to watch out for

Starting a small business takes a lot of hard work.  It’s even harder to entrench the business and ensure its long-term sustainability.  So why risk everything by making uninformed decisions with regards to your trade marks? Trade mark expert Jacqui Pryor explains what you need to know.

The SME landscape is littered with failed ventures with the ‘survival rate’ for new sole proprietors hovering around 41.5% (Australian Bureau of Statistics).  Whilst there are many different reasons why small businesses don’t get off the ground, one of the key things that many solo entrepreneurs don’t do – but which is critical for business success – is ensuring that their intellectual property (IP) is adequately protected.

IP can be one of a start-up’s most valuable assets, yet it is often overlooked, or, misunderstood.

Consider all the energy, emotion, time and resources that go into creating a new brand.  Now imagine the consequences when that brand comes up against ruthless copycat competitors without having secured exclusive rights for its IP.  The business’s hard-earned identity, reputation, market share and indeed, its future, may well be at risk if its primary identifier is not used, protected and enforced correctly.

Don’t add your venture to the pile of failed small businesses.  Instead, read on to find out how you can avoid making trade mark blunders and get expert guidance on how to set up watertight brand protection.

Common trade mark blunders made by solo entrepreneurs

Below are five trade mark mistakes that are very common among start-ups and small businesses.

1. Not doing a comprehensive search to ensure the intended brand is available
2. Not budgeting for trade mark protection
3. Not using the registered trade mark appropriately
4. Not monitoring the competition
5. Not having an umbrella IP strategy

Now let’s look at the important steps that solo entrepreneurs should take to avoid making these mistakes.  These steps are imperative for establishing a sound framework for building a successful venture because they provide a brand with watertight legal protections, prevent others from infringing on your rights and minimise the risk (and possible crippling costs) of unintentional infringement against another trader.

Recommendations for solo business owners to avoid common trade mark blunders

Don’t simply register your business name and hope for the best

Many people are under the false impression that registering a business name automatically gives exclusive rights to that name.

However, the fact is that a registered trade mark is NOT the same as a registered business name.  Several competing businesses can have the same name, but you will only get legal rights for the exclusive use of your identity if you have registered it as a trade mark.

Many people also mistakenly believe that trade mark registration is only relevant for the big end of town.  The truth is trade mark registration is as important for a global behemoth as it is for a one-person enterprise.

Do comprehensive research upfront

Entrepreneurs should always investigate whether their intended brand identity is available before making any significant investment in developing and launching the new product or service under that brand.  This will eliminate any doubt as to whether the proposed mark (which could be a number of things including a word, name, phrase, slogan, image, element of packaging, sound, colour or a combination of these) is sufficiently unique and different from another trader’s registered trade mark.

Using a mark that is confusingly similar to another trader’s mark (either knowingly or unwittingly) can result in significant problems.  Infringement may even require an entire rebrand – a costly process which could cripple a small business.

The only way to avoid conflicts and to ascertain whether your intended trade mark is actually available is through a detailed search of the database of registered trade marks (which is managed by IP Australia).

For a simple search, it’s easy to do the investigations yourself.  For more advanced searches however, it’s advisable to get assistance from a trade marks professional who has experience with complex search queries.

Allocate sufficient budget for a trade mark strategy

There’s no doubt that starting a new business puts considerable strain on resources and every entrepreneur will have had sleepless nights over cash flow concerns.

Allocating funds to IP protection generally doesn’t feature very highly on an entrepreneur’s capex priority list, with many choosing to defer filing their trade mark applications or save money by going the DIY route.

It is important to be aware that the cost of NOT doing anything or dealing with the consequences of mistakes or omissions on a poorly drafted application generally far outweigh any investment in securing trade mark protection.  IP protection is not a ‘nice-to-have’, it should be considered a must-have.

The key takeaway here is that solopreneurs need to allocate sufficient resources to protect their valuable IP assets and safeguard their business’s future.

Monitor the marketplace

It’s a tough task managing a small business and the demands on a sole owner are significant.

However, it is crucial to understand that trade mark registration isn’t a ‘set and forget’ situation.    Trade marks require constant vigilance, and even when time and resources are in short supply, it is incumbent on the trade mark owner to enforce their rights. The trade mark office (IP Australia) will not police the marketplace for infringements.  And that means trade mark owners need to be consistently monitoring the competitive landscape to identify any potential infringements.

Shutting down any areas of conflict quickly will minimise consumer confusion and limit reputational damage.

Use it or lose it

Another important point about registered trade marks is that they have to be used in order to retain their validity.

Jacqui Pryor, a leading trade marks attorney and owner of MMW Trademark Services says that for a trade mark to be considered ‘in use’, it has to be used in compliance with a number of factors including use by the owner of the trade mark (or under its control) and be used in good faith in connection with the nominated goods/services, in the course of trade.

A registered trade mark can be removed if it is not used in respect of the nominated goods/services within a specific three-year period.  In other words, use it or risk losing it.

A trade mark can also be vulnerable to a removal attack if the applicant had no intention to use the trade mark, on the date it was filed, in good faith for the nominated goods/services – however these attacks are less common.

Have a comprehensive IP strategy

A registered trade mark can be one of the most valuable assets on a small business’s balance sheet.  It’s a tradeable asset which can be sold, licensed or assigned – and it can be a key bargaining tool when it comes to attracting investors or selling the company.

The very best time to register a trade mark is immediately after you have done a comprehensive search to determine its availability.

You should also consider trade mark registration in all the geographical areas in which you intend trading – and remember to take any future expansion plans into consideration.  Trade mark law is territorial and whilst e-commerce has enabled trade across borders, it is imperative that you give your hard-won identity the strongest protection possible by registering a trade mark in the regions where you are doing (or intend to do) business.

Trade mark law is complex and specific legal knowledge can be an advantage during the trade mark registration process.

An experienced trade marks attorney can help busy solo entrepreneurs avoid costly mistakes or omissions during the application process.  They’ll make sure all the ‘I’s are dotted and the ‘T’s crossed and they’ll help you develop a future-proof strategy that will ensure ongoing brand protection and optimum management of your extremely valuable IP asset.

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