Building brand awareness is a key consideration when growing a business. Your brand is how customers will recognise you and become loyal to your business. Ideally, you want your branding to be unique to distinguish you from the competition in your industry. Accordingly, your brand name and logo are valuable assets and are worth protecting. One way of protecting these assets is to register them as a trade mark. This article will explain whether you can use another company’s name or logo when registering a trade mark. It will also explain how Australian Consumer Law (ACL) and passing off will impact your IP protection strategy.
Registering a Trade Mark
A trade mark is a way of identifying a unique product or service and can include your name and logo. Once you register the mark, you have exclusive rights to use it within your industry. Before you do so, consider whether anyone else in the same industry has a trade mark that is exactly the same or deceptively similar.
However, what if the name or logo is already being used, but isn’t registered as a trade mark? While you might not be immediately prohibited from applying for the mark with IP Australia, you should still take care and make sure you’re aware of the ACL.
What is the ACL?
The ACL is a national law. It sets out the rights and obligations of businesses and consumers in trade and commerce. The ACL is vast and governs issues such as:
- unfair contract terms;
- product safety; and
- misleading or deceptive conduct.
Misleading or Deceptive Conduct
You cannot engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Therefore, even if you don’t intend to be misleading or deceptive, you could be breaching the ACL if it is likely that your conduct is misleading or deceptive.
If you are looking to long standing, international companies for inspiration for your trade mark, it is very likely that you will find their names, logos and slogans on the trade marks register either in Australia or overseas. Therefore, you would be breaching their trade mark rights if you used a mark that was too similar to theirs and in a similar industry.
However, say, for example, you wanted to use the name Electric Zoo for your up and coming electrical contractors business. You know that another electrical contractors business is named Electrical Zoo. It’s a small to medium sized business trading in your area for over 10 years. You perform a trade mark search and find that there is nothing of the like registered – does this now mean you can use the desired name with no problem?
In short, no. The ACL will apply because using the name would be misleading or deceptive. “Electric Zoo” and “Electrical Zoo” are so similar that a customer may think they are the same business.
If the Australian Competition and Consumer Competition (ACCC) finds that you have been misleading or deceptive, it may fine you and you could even have to rebrand, which is a costly process.
Passing off means that you represent your goods and services as the goods and services of someone else. While the ACL protects customers, a claim in passing off protects businesses.
Other than using someone else’s name or logo, a case for passing off may also arise when posting third party names or links. This is worth considering given that social media and e-commerce are staples of modern business practices. A common example may be representing yourself as a licensed distributor when in fact you’re simply purchasing at a retail level and reselling for a profit.
There are three elements to a case for passing off:
- misrepresentation: You’ve made a representation (whether it be through using their name or logo, or posting a third party link) to mistake others into thinking you were the other party or in partnership with them;
- goodwill: The other party has an established reputation and their name and logo distinguishes them within the market; and
- damage: The other party has suffered damage as a result of your misrepresentation. Often, the damage is the sales the other party has lost out on.
- misrepresentation: A customer uses Electric Zoo, thinking it was Electrical Zoo;
- goodwill: They expect a service reflective of 10 years’ experience; and
- damage: They give Electric Zoo business, thinking they are dealing with Electrical Zoo.
A successful claim for passing off will generally result in the court imposing an injunction. An injunction is an order to do or stop doing something. In this case, it would stop the offending party from engaging in passing off. If fraudulent activity is involved, the court may also order that the offending party pay the other party damages.
Misleading or deceptive conduct and passing off are similar. However, the main difference is that the ACCC will bring an action for misleading and deceptive conduct, whereas another business will sue for passing off. When you’re choosing a name or logo, it’s important to check two things:
- there isn’t an identical or deceptively similar mark already on the register; and
- no one else is using an identical or similar mark, even if they don’t have a registered trade mark.
If you need help deciding on a trade mark that won’t infringe upon other business’ rights, contact LegalVision’s trade mark lawyers on 1300 544 755 or fill out the form on this page.
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