Trade Marks: The good, the bad and the ugly

A cynic may say that trade mark law exists only to keep trade mark attorneys and lawyers busy and to enable companies to protect their profits, instead of being a mechanism to protect the public from fraudsters.  Jacqui Pryor explains the good, the bad and the ugly.

Cynics may also say that because trade mark registration effectively empowers companies to sue to protect customers from confusion, it means the private sector is paying for what should effectively be the government’s responsibility (ie protecting the public from fraud).

Do the cynics have a point?

Businesses aren’t motivated by altruism and a sense of civic duty when they register a trade mark.  They do it for commercial purposes.  After all, why go into business if not for profit?  Every responsible business owner wants to protect their turf as far as possible – and registering a trade mark is the responsible and reliable way to do so.

But the word of trade marks is complex and as in any field of law, uncovering the truth is not always straightforward.  Let’s investigate the good, the bad and the ugly in the trade mark universe.

What is a trade mark exactly?

According to IP Australia, the official gatekeeper of all things to do with trade marks in Australia, the definition of a trade mark is:

‘…a type of intellectual property (IP) right which distinguishes your unique brand, product or service from other competitors in the market. A trade mark can be used to protect your business name or aspects of your brand. Trade marks can be used to protect a logo, phrase, word, letter, colour, sound, smell, picture, movement, aspect of packaging or any combination of these.’

Trade marks can be both unregistered as well as registered, and once a mark is registered, it is valid for an initial 10-year period (from the date of filing).  It is possible to renew the registered mark for an ongoing period at a fee, but the trade mark should be in use in order to maintain its validity.

Now let’s take a look at the good, the bad and the ugly side of trade marks.

What’s good about registering trade marks?

There’s no doubt that a trade mark is there for commercial purposes.  Trade mark registration protects a company’s investment in its brand identity and reputation – and by extension, it protects that brand’s current share of the market as well as its future.  Trade mark registration helps to prevent a competitor from misleading or confusing customers into believing their product is that of another trader’s.

In a nutshell, a registered trade mark gives the owner exclusive rights to use that mark in relation to the goods and services nominated.

Other benefits include:

• Unlike an unregistered trade mark, a registered trade mark can be more easily enforced against infringements.
• A registered trade mark is a tradeable asset and can be sold, licensed etc. An unregistered trade mark cannot necessarily be sold unless associated business and its goodwill is also transferred to the buyer.
• A registered trade mark adds value to a business.
• It is a criminal offence to use a registered trade mark improperly.

There clearly is a world of ‘good’ in the field of trade marks, so let’s now investigate if there’s anything bad.

Is there anything bad about trade marks?

When it comes to trade mark infringements – for example when consumers are likely to be confused and believe they are engaging with a brand or company they thought was someone else entirely – the person being tricked doesn’t actually raise a case against the fraudster.

So who does and who’s the victim here?

There are arguably two groups of victims – the trade mark owner and the consumer – but it’s the trade mark owner and not a member of the public who pursues the infringer.  Separately, in Australia, we do have the Australian Consumer Law that serves to protect consumers from being misled or deceived, which is different to the question of whether a trade mark owner’s rights are infringed.

Trade mark law empowers the company that officially owns the brand through trade mark registration to take up the legal cudgels.  In other words, it’s up to the trade mark owner to take action to protect their asset and bottom line and to protect unsuspecting consumers.

The brand owner doesn’t want to lose customers to fraudsters, nor even to other businesses where infringement may have occurred innocently, or, at times with an ignorance to trade mark laws, and they certainly don’t want to risk reputational damage, so it makes sense for them to have the legal firepower afforded to them through trade mark registration.  The consumer is happy to have the security of that protection because it’s a mechanism for mitigating their risk of inadvertently buying inferior goods or services and being duped by imposters.

Perhaps the only ‘bad’ thing about trade marks is the questionable conduct of fraudsters who knowingly set out to profit from others’ efforts.   The public are often unsuspecting victims and it’s up to the trade mark owners to constantly monitor their marketplaces for trade mark infringement and take swift action to protect their registered rights.

What’s ‘ugly’ about trade marks?

Is there anything ugly about the proprietary protection afforded to brands through trade mark registration?

One could say that the only ugly side of trade marks is the number of operators out there who don’t think twice about illegally profiting from someone else’s investment, either because they are unaware of trade mark laws, or, at times simply don’t care about them.  The flipside is that there are laws in place to protect brands and to protect the public – and that through the vigilance of brand owners, professional support from lawyers and trade marks attorneys and Australia’s robust legal system, these laws can be enforced and perpetrators made to cease the conduct.

Trade marks are there for the greater good of the world of commerce and for protecting the intellectual property rights of the owner, and, by default to protect consumers too.  While some cynics may see trade mark registration as a waste when there’s no clear risk of likelihood of public confusion and no immediate threat of reputational damage to the brand, but perhaps it’s like any kind of insurance.  If you don’t claim on it (ie nothing bad has happened), is it a waste?  Surely there can’t be a person who has successfully claimed on their insurance who then regrets their decision to protect their possessions or their physical or financial health?

You be the judge, but those in the know – from legal experts to savvy business owners – will attest to the fact that trade marks are for the good of the business as well as the consumer.

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