If you are starting a new business venture, launching a new product or service, or purchasing an existing business it’s important to think about brand protection. Consumers’ purchasing decisions are highly influenced by brands and their associated reputation, so when developing a brand it’s worth putting in the ground work. We recommend engaging an IP lawyer right from the outset, they can liaise with the designer or marketing professional you’ve decided to use, and conduct the appropriate due diligence to ensure the brand is in fact available for you to use. Once satisfied the brand is available, your IP lawyer can make recommendations as to protection.
A trade mark registration provides an exclusive right to use a brand in New Zealand in respect of specific goods and services. It is the easiest way to prevent other traders using a brand that is the same or similar to yours. You can continue to use your brand without a registered trade mark, though in order to assert any proprietary rights in the brand, you would need to rely on the Fair Trading Act or the tort of passing off. This can be difficult, not to mention expensive.
Here’s an example:
John starts a business in Christchurch. After 5 years of trading he builds up a loyal customer base and starts looking to the future. He has his sights set on Auckland. One day John’s friend from the North Shore gives him a call “John! It’s great to see you’ve opened shop up here!” John was slightly confused, he had plans to enter the Auckland market, but it was still in the pipeline, what was his friend talking about?
On further investigation, John establishes that another trader had opened up shop, using the same name and selling the same goods. A quick ‘Google’ search indicates that the trader is quite new to the market. It looks like the guy has completely ripped off John’s branding! John is annoyed, but assumes as he has ‘owned’ the brand for 5 years, he should be okay. After all he’s the innocent party, the one whose brand had been copied, a quick cease and desist letter would be sufficient to shut the guy down, right? Wrong.
Back when John started the business he decided to forgo trade mark registration. At the time there were a number of start-up costs and brand protection didn’t seem high on the priority list.
Because John doesn’t have a registered trade mark for his business name, he has to rely on the Fair Trading Act or the tort of passing off. To bring a valid claim against the North Shore trader under these heads of law, John needs to prove in court that consumers will be mislead or deceived by the other trader’s use of the brand. Key to this is reputation. If consumers in Auckland are not familiar with John’s Christchurch brand, they can hardly be misled into thinking the new trader’s services are somehow related. This is where John’s position could fall short. He has a reputation in Christchurch, but does the relevant purchasing public in Auckland have any clue who he is?
Although John may be able argue his position based on a spill-over reputation from the South Island, the time, cost and stress involved in doing so may be exceptional, and the claim may ultimately fail. If John had spent the small cost up-front and sought a trade mark registration, his rights to the brand would have been clear cut.
We encourage all our clients to seek advice concerning brand protection. A trade mark is a valuable asset that appreciates in value as your business and reputation grow. Whether you are an established business or just starting out, it’s important to keep stock of your intellectual property portfolio to ensure you have adequate protection of all the goods and services you provide. Lane Neave offers free intellectual property audits to all new and existing clients. An audit will help you understand the extent of your intellectual property portfolio, including registered or unregistered trade marks. With this information we can identify key business risks and make recommendations as to brand protection.
If you are interested in a free intellectual property audit, or any of our other intellectual property services, please contact Anna Ryan at anna.ryan@laneneave.co.nz.
Business Law team
If you need any assistance with the sale or purchase of your business, do not hesitate to get in touch with the Business Law team at Lane Neave.
Gerard Dale, Claire Evans, Graeme Crombie, Evelyn Jones, Anna Ryan, Joelle Grace, Peter Orpin, Ellen Sewell, Matt Tolan, Carlo Wan, Kristina Sutherland, Jacob Nutt, Whitney Moore, Alex Stone, Ben Cooper, Lisa Catto
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