Trademarks: What are they and why do I need one?

KEY TAKE-OUTS:

• Trademarks are a type of intellectual property right that protects your brand
• Trademarks are not automatic when you register your business name – you need to make a separate application to register your trademark through IP Australia
• Not protecting your intellectual property could negatively affect your business and benefit competitors

Trademarks can be thought of as your brand, as they are a type of intellectual property that protect how you identify your business, whether it be a set of words, or a logo, or both. Don’t be fooled by thinking that by registering the business name that you are protected. Unfortunately, that’s not the case and can cause some serious issues down the track if your intellectual property rights have not been protected.

Trademarks, once created, are an asset which is owned by a business which can be bought, licensed or sold. Disney is a good example – they license their trade mark to toy manufacturers and suppliers to use on their products and earn a percentage of the profits. What would happen, though, if the iconic Disney brand name and logo was not protected, and could be used by any other business?

The common issue that will arise is where another business will pop up, with a very similar name and target market as the original business. This second business will then indirectly begin to benefit from the value you have created through your marketing. The worst-case scenario is that the second business provides a lower quality of service than yours does or causes confusion for the customer, which can then negatively affect the reputation of your business. Although this sounds unlikely, we have seen this happen all too often and it can be frustrating because the only way to protect your brand is by registering a trade mark which is no instant process. During this time, the potential damage to your business could be quite severe.

By trademarking your intellectual property early, you can take action to protect your rights as soon as an infringement occurs, limiting the potential damage to your business. Trademarking also solidifies your presence in the market, and your consumers can recognise your business compared to others. In the event that another business does try and use the same or a similar business name to target the same market, your legal rights will already be established and you can take action immediately, rather than waiting several months or even years for these rights to be secured. It is important to note though, that a trade mark does not provide automatic protection, and you will still have to keep an eye on the market to make sure that nobody else is using your intellectual property. If you believe that someone may be infringing on your intellectual property, you should seek legal advice to see what can be done to register or enforce your intellectual property rights.

If you are thinking about trade marking your business assets, or need help enforcing your intellectual property rights, feel free to contact our commercial law team who would be happy to assist.