Many small business owners delay trade marking their business names – and other key business ‘marks’, like logos and catchphrases, only to regret the decision when legal challenges arise.
Failing to act early in the trade marking arena can be costly, time consuming and may cause confusion that impacts your business’ growth.
Your organisation’s trading name and logo are essential ways consumers and other companies identify your business and help create goodwill for your brand. Losing the opportunity to use these after you’ve built up goodwill is, therefore, very challenging and potentially expensive.
Act soon to avoid costly headaches
When a new business is established, it usually quickly invests in signage, stationery, websites and marketing materials featuring the name and a logo of some description.
The entity may also use other special ‘marks’ distinctive to them, such as phrases, words, images, letters, scents, sounds, shapes, movement or unique packaging.
All these items, if not trade marked, can be used by other businesses and legal battles can ensue to determine who gets to exclusively use them in the marketplace.
If your business loses, it can mean a costly rebrand of company assets. You may also have to pay legal fees to the entity challenging you for ownership of the trademark, in addition to your own. Then, there’s the issue that having to change your name or brand can mean customers become confused about your business, costing you crucial income.
Trade mark battles a big issue for small business
Case study #1
A Melbourne small business providing retro caravan accommodation atop a carpark called itself NOTEL when it was founded in 2016.
Shortly after, NOTEL filed to register its name with Australia’s trade mark office, IP Australia. However, the established hotel chain Novotel opposed the attempt, arguing it could deceive or cause confusion as the name was too similar to its own.
NOTEL argued it was nothing like Novotel and offered to limit itself to being “alternative” accommodation, but lawyers for Novotel owners Accor Hotels didn’t agree to the proposal.
By early 2019, NOTEL’s legal costs were considerable and IP Australia ruled in favour of Novotel. NOTEL had to spend money rebranding in 2022, hot on the heels of extended COVID-19 closures, and the business is now known as HOTEL NO.
Case study #2
In another case, a Perth restaurant applied to register the trade mark Aachi Indian Cuisine.
The trade mark application was opposed – initially successfully – by the spice manufacturing Aachi Business, which is based in India and operates globally.
In 2021, Aachi Business was found to have an established reputation in Australia before Aachi Indian Cuisine’s trade mark application. The two trade marks were also deemed to be essentially the same, such that it could cause consumers to wonder if the two businesses were connected.
Aachi Indian Cuisine could not register its trade mark and costs were awarded to Aachi Business.
However, in an appeal in 2023, the decision was overturned and the Federal Court of Australia ruled Aachi Indian Cuisine could keep using its name.
Overall – a very costly and drawn-out exercise for both businesses, and it may not be over!
When’s the right time to trade mark?
So, when should SME business owners trade mark a name and logo?
The answer is – as soon as those items are decided and designed.
By taking this step early in the process of establishing a business, trade mark issues can be ruled out before large investments are made.
Engaging legal experts early in the logo design phase to look for potential trade mark breaches protects your business from trade mark battles. It also protects your design agency, as it’s at risk of being sued if it fails to pick up glaring similarities to another trade marked logo or name.
Another key point when dealing in this legal space is that if your business expands beyond its physical base, including by engaging in international online sales, it’s essential you consider overseas trade mark registration. That’s because trade marks need to be individually registered in each country you want to trade in.
For more vital information on trade marks, refer to our earlier blog.
The take-home trade mark message?
It makes good business sense to get legal advice on trade marks early to avoid the costly mistake of stepping on the toes of other brands.
At Quest Legal, we are specialist trade mark lawyers who understand SMEs intimately.
We offer free initial consultations, fixed-price legal services and advice you can understand, so get in touch today.