Brand Selection and Use
A trade mark is a brand that identifies certain goods or services as originating from a particular source
A trade mark can also indicate that those goods or services are of a particular quality. A properly created trade mark can help create and maintain a demand for the goods or services of the trade mark owner or licensed user of the mark.
A trade mark can be a word, device, heading, label, ticket, name, signature, word, letter, numeral or any combination thereof. It could also be a shape, sound, colour or even smell.
How to Create Trade Mark Rights
Trade mark rights are created in two ways:
- Use – so called common-law trade marks; and/or
- Registration as a trade mark under the Trade Marks Act.
Australasia recognises common law trade marks. These rights are protected by fair trading legislation which serves to prevent traders operating in a way which is likely to mislead or deceive consumers and by the tort of passing off. There are, however, some significant disadvantages in relying purely on common law rights:
- Common law rights are limited because you must be able to show use and a reputation in order to have common law rights in a trade mark. If you are only using your trade mark in a certain location or on a narrow range of goods, then your rights might be limited to that geographic region and the actual goods/services provided.
- A reputation limited to a location or for narrow goods can be insufficient to stop another trader operating in another location or using a trade mark on other similar but not identical goods.
- It can be difficult and expensive to enforce common law rights, because there is no register to confirm common law rights exist. Court action may be required before other traders will take an objection seriously.
- Court action can be protracted and expensive. You must show a significant reputation in order to succeed in an action based on common law rights through the Courts. It is often difficult to show reputation to the level necessary to support Court action.
By comparison, a trade mark registration provides you with rights prescribed by the Act:
- Registered trade mark rights operate together with and reinforce common law use rights.
- Register rights take effect from the date of application, so the trade mark can be protected before you are using it. A trade mark registration can ensure no other trader can use your trade mark before you have a chance to establish any common law rights.
- After the initial cost of preliminary searching and of the application process, the trade mark registration remains in force for ten years and provides you with all the rights of registration throughout this period. The registration can be renewed on payment of a fee for further periods of ten years at a time.
While the registration is in force and the trade mark in use, the trade mark owner can:
- Assert rights throughout the country in which the trade mark is registered. A registration is not limited to the location where the trade mark is in use.
- Assert rights for more goods or services than the area of initial use. A trade mark registration can cover goods and services where use is intended for the future as well as goods and services already in use.
- Take action for infringement without the need to show use or a reputation. Because the exclusive right to use is evidenced by a searchable registration, many objections do not need to go any further then a letter of warning, and costly Court action can be avoided entirely.
- List the trade mark registration as a business asset and on the Personal Property Securities Register to add value to a business.
Selecting a Good Trade Mark
Creative, artistic and marketing direction are all important when developing a trade mark, but another important consideration is whether the trade mark can be easily registered. Developing a registrable trade mark can put you in the best position to establish broad rights, avoid problems with existing traders, and avoid unnecessary costs in protection and enforcement.
Unless it is clear the trade mark will only be used in New Zealand, some consideration should be given to its international viability and awareness of literal, slang or symbolic meanings in languages other than English e.g. NOVA/NEW.
The trade mark should not be confusingly similar to any current trade mark in use or to any residual reputation for a trade mark recently used for the same or similar goods or services, and should not merely be appropriated from overseas.
The more distinctive a trade mark, the more easily it can be protected. You can roughly estimate the strength of a proposed mark by assigning to one of four categories.
- Fanciful: The strongest trade marks are invented words or new words coined by the owner. The more meaningless a word is in the context of the goods and services on which it is used, the stronger the owner’s rights; e.g. ZESPRI for kiwifruit.
- Arbitrary: These are natural words which have no direct relationship to the products or services; e.g. ANCHOR for dairy products.
- Suggestive: These trade marks may suggest some quality of the products and services they identify, but do not directly describe those goods or services; e.g. THE BODY SHOP or OLD SPICE.
- Descriptive: The weakest trade marks are those which describe the goods or services; e.g. CHEF’S BLEND, PIZZA FOR ONE.
While trade marks which are initially weak can gain strength from strong promotion, the path to registration for weak trade marks is not straightforward and is typically more expensive than registering a more distinctive trade mark.
Company Names and Domain Names
While company and domain name registrations allow for certain regulatory rights, these registrations do not provide any rights to use of those names in the course of trade.
If your company name or domain name is not also registered as a trade mark, your ability to claim use rights will depend on common law.
The Companies Office does not check to see if a proposed company name conflicts with an earlier name, or an existing registered or common law trade mark. The Companies Office will generally accept an application for a company name as long as it is not substantially identical with an earlier company name.
This does not mean that the name is free to use without risk of trade mark infringement or conflict with common law rights.
Trade mark searching which includes these considerations can be vital.
Use and Policing
Having developed your trade mark, care must be taken to use it properly on the goods and/or services, in print materials, in packaging and in advertising. An improperly used trade mark may become descriptive or generic. If a trade mark is used improperly, you may dilute your rights, seriously impede your ability to enforce your brand and you run the risk of losing your trade mark registration.
- Use the trade mark always as a proper noun, and not as a verb or simple descriptor for the goods or services; e.g. “drink NESCAFE coffee” not “drink a NESCAFE”.
- Never add a suffix – “s”, “ing”, “ly” all invite traders to mis-use your trade mark; e.g. “OREO cookies” not “OREOS”.
- Use the trade mark as it is registered – do not hyphenate or compound a trade mark with another term, use it in an abbreviated form or join it with another word or phrase.
- A trade mark owner should also be diligent in noting any unauthorised use of the mark or confusingly similar marks. Any mis-use of your trade mark should be addressed as soon as possible. Delay in taking action can often be regarded as acquiescence and can greatly diminish the likelihood of successful objection.
Protection of trade marks is not for amateurs. It is a complex legal area and requires advice, guidance and insight from a competent legal adviser such as a solicitor specialising in the area or a patent or trade mark attorney.
Proposed trade marks should always be searched for potential conflict with registered, pending and unregistered trade marks. Having ascertained that the mark is available for use as proposed, an application for registration should be filed to secure best protection for your trade mark rights.