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How to Choose an Enforceable Brand So You Don't Risk Losing It

mdp Team | February 21st, 2017

Registering a trade mark doesn't guarantee strong rights to a brand. Don't blindly adopt one; choose an enforceable brand to avoid losing it to anyone else.

While it can seem like a straightforward process to register a trade mark, registering one that is strong and enforceable is a lot more complicated. As was seen in the case of Chemist Warehouse, where a trade mark registration is weak, the registration is sometimes just not enough.

Chemist Warehouse had a registered trade mark for the phrase “‘Is this Australia’s Cheapest Chemist?”. When the discount pharmacy brought its competitor, Direct Chemist Outlet, to court for using the slogan “‘Who is Australia’s Cheapest Chemist?”, Justice Middleton ruled that Chemist Warehouse’s trade mark was not valid because it was not sufficiently distinctive.

Justice Middleton, therefore, dismissed Chemist Warehouse’s claims. Additionally, he ordered that Chemist Warehouse’s trade mark registration gets cancelled and that it pay costs to Direct Chemist Outlet.

So how can you avoid being in a situation like that? By choosing an enforceable brand, of course.

In order for your brand to be enforceable, your trade mark must:

  • Not be substantially identical or deceptively similar to other marks on the Register; and
  • Be distinctive.

These tips will help you to find an enforceable brand:

1. Do Your Homework

To register a brand as a trade mark, it must not be substantially identical or deceptively similar to any other marks on the Trade Marks Register.

It’s always better to identify unsuitable names for your brand before spending significant amounts of money getting your product to the market only to receive a lawsuit for trade mark infringement.

Do your homework by conducting searches in:

  • The Trade Marks Register
    • to determine if your brand will infringe any trade marks registered by other owners;
    • to identify other trade marks that might block an application to register your brand; and
  • The marketplace
    • to identify unregistered trade marks to avoid encroaching on the rights of other brand owners who might be able to bring a claim against you under the Australian Consumer Law.

2. Choose a Distinctive Brand

A brand can only be registered as a trade mark if it is distinctive; that is if it doesn’t describe the goods or services you are providing.

For example, “Apple” is a distinct brand within the computer products category. In relation to fruit or apple trees, however, it is considered descriptive as traders may use the word to describe their business.

Distinctive branding also makes your brand more enforceable. As Justice Middleton noted in relation to Chemist Warehouse’s trade mark: “the last three and dominant words of [Chemist Warehouse’s] trade mark, “Australia’s Cheapest Chemist”, contain three separate parts signifying geographical location, price and nature of business respectively. Neither of these, whether viewed independently or combined, have the required distinctiveness.”

The possible consequences of issuing proceedings based on a weak trade mark include losing your trade mark registration and having to pay the other party’s legal costs.

3. Use it or Lose it

You’ll need to use your trade mark in the course of trade in the same form it appears on the Trade Marks Register. If you fail to use it for three years continuously, other parties may seek to cancel your registration for non-use.

You should also register a new trade mark if you change or modify your branding. If you are no longer using the old mark in accordance with the registration, you could lose your registered mark.

4. Expand your brand

To make the most of your brand you can expand:

  • into a broader range of goods or services; and/or
  • into new geographical territories.

You can expand your brand by licensing your trade mark interstate or overseas. If you are licensing overseas, you should ensure that you have overseas trade mark applications or registrations in place.

You should also ensure that your licence agreements contain appropriate quality control provisions so you can control the use of your brand and minimise the risk of your licensee causing damage to your brand.

When You Want to Enforce Your Brand

If you are enforcing your registered trade mark, the party you wish to enforce it against must be using their brand ‘as a trade mark’. This means that it must be used as a badge of origin of their products or services.

If the other trader is only using your trade mark to describe their products or services rather than ‘as a trade mark’, they will be able to rely on this as a defence to infringement under the Trade Marks Act. This is also another reason to avoid using descriptive trade marks.

mdp Team

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