5 Misconceptions About Trade Marks

Trade marks are a valuable business asset which provides the owner with the exclusive right to use and stop others from using the mark. Most people are familiar with trade marks and the ™ or ® symbols attached to business names and logos. Beyond this, the details become hazy partly because of the different intellectual property laws and terminology used across the world. Even the use of ™ or ® regarding trade marks is regulated differently in various jurisdictions.

Business owners should inform themselves about trade marks and leverage their understanding to grow and add value to their business. Misconceptions about trade marks, on the other hand, can lead to an ineffective intellectual property strategy and unnecessary hurdles and costs to overcome along the way. We set out to dispel five common misconceptions below.

1. A Trade Mark’s Entire Purpose is to Stop Others From Using It

Contrary to popular belief, a trade mark’s purpose is not to prevent others from using the mark (although this is an effect of registration), but to distinguish your goods and services from another trader’s. Your trade mark is a ‘badge of origin’. Understanding this distinction is important when it comes to choosing a business name or product name. Many people who consider the purpose of the trade mark solely to stop others from using may find it difficult to register the trade mark.

For example, Surry Hills Beauty Salon fails to distinguish the goods or services because it literally describes the services – a beauty salon located in Surry Hills. A business owner who believes that the purpose of a trade mark is to stop others from using the name would try to register this, and IP Australia would reject their application. Understandably, the business owner wants to stop others from using the name, but this wouldn’t be fair since other beauty salons are likely to need to use the words in the course of their business.

Recognising the purpose of using a distinctive trade mark will help you become more creative with your business names. The more unique the name is, the more likely IP Australia is to approve.

2. Registering my Trade Mark Means I Can Stop Anyone From Using It

There are two parts to this misconception that require clarification. Firstly, trade mark protection does not extend to everyone and secondly, it does extend to any use of the trade mark. Trade marks are registered under classes which indicate the goods or services associated which the mark. Trade marks used in relation to goods or services outside of the registered classes would not be considered infringement.

Registering your trade mark in relation to beauty salon services means you can stop other beauty salons from using the mark, but it does not mean you can stop a restaurant or a clothing store from using the same name. A restaurant or a clothing store is not likely to be considered a competitor to a beauty salon and consumers are unlikely to be confused as they can easily recognise the differences between the two businesses.

Further, under the Trade Marks Act 1995 (Cth), use of your name or logo as a trade mark is considered infringement – not simply general use. If another business is using the same or similar mark as yours to identify their goods or services, it would likely constitute infringement. It’s important to distinguish then between reference to a trade mark and use.

3. Trade Marks Protect Your Business Ideas

There are traditional businesses, and there are those built on a method or principle that is new and unusual for the industry. It makes sense to want to protect the idea and to get the appropriate recognition.

Here is where people confuse different types of intellectual property protection. The four main IP rights are trade marks, copyright, patent and design registration. The overall rule is that there is no protection for an idea – only the expression. Copyright, patents and design registration protect the different types of expression of these ideas.

In Australia, businesses do not need to register copyright as it automatically subsists in original work such as music or paintings. Patents are granted in relation to the function of inventions or processes that are novel, whereas designs are registered over the look and feel over new products.

Trade marks are used for branding – business names, product names, logos or taglines. Non-traditional trade marks include shapes such as Toblerone’s triangular prism chocolate, colours like Cadbury’s purple, or sounds like Darth Vader’s breathing. None of these protects the business idea, but they can be used to associate your brand with the particular business method.

As we’ve seen above, the purpose of the trade mark is to distinguish the goods or services. If a business has come up with a new way of doing things, an easy way to ensure they get credit for their creativity is to invest in their brand and trade mark protection.

4. I Can Get Worldwide Protection With My Trade Mark

A ‘global trade mark’ does not exist. Trade marks are a matter of national jurisdiction meaning you must apply to each country for registration. So, your mark may be available in Australia but not the United Kingdom. Notably, if your mark is not available in another jurisdiction, you may be infringing by operating your business in that country.

5. Registering a Trade Mark is the Same as Registering a Business Name

The Australian Business Register allows you to register a business name for your business. It will not allow two businesses to register the same name. Registering the name, however, does not give the business the exclusive right to use the name as a trade mark.

Similarly, registering the company name through ASIC is not the same as registering a trade mark. ASIC, the Australian Business Register and IP Australia all work in different spaces – they don’t look outside their own register to check for the availability of the name.

It is only through registering your trade mark that you have an exclusive proprietary right to the business name. If you have the business name registered but no trade mark, you have a limited right to stop another party from using the name.

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Get your trade mark facts straight. Developing a comprehensive understanding of how trade marks work will greatly benefit your business and help you form a strong trade mark portfolio and strategy. If you have any questions about registering your trade mark or monitoring for infringement, get in touch on 1300 544 755.