A certification trade mark (CTM) is a type of trade mark that identifies goods or services of a specific standard or characteristic. For example, the ‘Australian Made’ logo certification can be found on more than 10,000 products sold in Australia and internationally. This article will take you through CTMs and whether you should license one for your business.
What is a Certification Trade Mark?
CTMs attest to goods or services being of a certain standard or having a particular characteristic. For example, a CTM might specify that a good:
- is of a particular standard or is made using a particular process;
- has been made in a particular place (e.g. the well-known ‘Australian Made’ logo )
- meets religious standards (such as being Halal certified); or
- uses ethnically sourced ingredients (e.g. the Fairtrade mark).
Benefits of CTMs
A CTM is to be used by businesses whose goods or services meet the rules set for using the CTM. Those rules are publicly available and must be approved by the Australian Competition & Consumer Commission (ACCC), meaning that a CTM’s users are ‘verified’.
Consumers use CTMs as indicators of quality or specific characteristics. Therefore, CTMs can benefit your business by attracting customers interested in the source or quality of the goods they are purchasing.
Furthermore, consumers will have confidence in your goods if you can confirm through a CTM that your goods are:
- Australian-made;
- Halal certified; or
- ethically sourced.
Requirements For Certification Trade Marks
There is a range of rules that a CTM must cover. You must meet these rules to receive approval for the use of a CTM. These rules include the:
- standards that goods or services must meet;
- method for determining if you meet the standards;
- requirements an approved certifier must meet;
- requirements for the use of the certification trade mark;
- procedure for resolving a dispute about whether goods or services meet the standards; and
- procedure for resolving any other issue regarding the certification trade mark.
How to Apply for a Certification Mark
If you want to use a CTM, you must apply to license these marks separately.
A trade mark license allows the owners of a trade mark to allow others to use it for an upfront cost and a royalty fee. There are three main licensing agreements, including:
- exclusive, which means the licensee is the only person able to use your trademark. This licensing agreement prevents even you, the owner and licensor of the trade mark, from using your trade mark;
- non-exclusive. A non-exclusive licensing agreement permits the licensee and the licensor to use the trade mark (this is common for franchises); and
- sole, allowing the licensor to use the trade mark and the licensee.
Most (if not all) CTMs are non-exclusive licenses, as businesses use them broadly.
Consider you want to apply to use the ‘Australian Made’ trade mark with your goods. In that case, you will need to apply to the Australian Made trade mark owner to license their CTM. Australian Made license its trademarks based on the sales of the licensed products.
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Key Takeaways
If you own a business, you probably know the importance of distinguishing your goods from your competitors. A CTM is one way to help you stand out from all of your competitors by showing that your products are of a particular standard or meet specific criteria. However, the decision to obtain a CTM will depend on:
- the objectives of your business;
- your customer base; and
- your financial capacity to license trademarks.
However, you might wish to consult with a legal professional before making such a commitment. If you need assistance understanding CTMs and trade mark licensing, our experienced IP lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
A certification trade mark (CTM) is a type of trade mark used to identify goods or services of a specific standard or characteristic. For example, the ‘Australian Made’ logo certification can be found on more than 10,000 products sold in Australia and internationally.
The decision to license a CTM for your food van will depend on the objectives of your business, your customer base and your financial capacity. However, using a CTM will give your food van a competitive edge and allow you to reach more consumers. For example, if you can confirm to your customers through a CTM that your goods are Australian made, Halal-certified, or ethically sourced, consumers will have confidence in your goods.
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