More often than not, a great deal of a business’s value is tied up in what is known as ‘goodwill’. Goodwill is similar to ‘reputation’ and often a business’s branding and name are central to the good reputation of that business.
A business is usually represented by a name, logo or combination of both, known as its ‘brand’. Branding is central to goodwill, so it is vital that these elements are properly and adequately protected.
Words and logos are the two most common forms of what we know as trade marks. If your business has a trading name or a distinctive logo, it is important to ensure that they are protected from use by others, particularly competitors of your business. If a business has valuable goodwill in its name and/or logo, it is attractive to competitors who could attempt to leverage their own business off the goodwill in the established business’s brand.
You don’t need to register your trade marks in order to have legal rights in them. The owner of an unregistered trade mark can bring a claim for breach of that trade mark either under the Fair Trading Act or in an action known as ‘passing off’ (where one party effectively deceives the public into believing that its goods or services are the goods or services of another party with an established reputation). However, it is difficult to establish a claim against a party for passing off, as it would effectively require a judge to make a finding based on evidence alone. Succeeding with such a claim would be uncertain and most definitely costly.
To avoid such uncertainty, it is best to register your business’s trade mark(s). That being said, there are various grounds upon which the Intellectual Property Office may refuse to register trade marks, for example, if they are not distinctive (i.e. not sufficiently discernible from the trade marks used by similar businesses) or are deceptive (likely to cause confusion).
There is no guarantee that your trade mark(s) will be registered. In fact, many applications are rejected. However, if you are successful in registering your trade mark(s), you are afforded a further level of protection, as there is a legal presumption that a registered trade mark is valid, which would be paramount if a dispute relating to the trade mark arose. Therefore, registered trade marks hold more value.
The process of registering a trade mark can be difficult and time consuming if not undertaken properly. Registration can also prove less effective if the specifics of the registration are lacking. It is, therefore, a good idea to consult a lawyer to assist you with this process.
P/ 09 489 9102
Andrew’s work primarily focuses on Commercial and Company Law and Commercial Leasing. Andrew’s clients appreciate his keen interest in assisting them with the unique issues involved in running a family-owned business, commercial structuring and aligned advice.
Andrew worked part time with Armstrong Murray while studying and returned to the firm in mid-2011, after three years working for a large national firm. As a third-generation Takapuna Grammar boy, Andrew enjoys the close links the firm has to the local North Shore community.
This article is brief and general in nature. You should not treat this article as legal advice and should seek professional advice before taking any action in relation to the matters dealt with in this article. Armstrong Murray accepts no liability for losses suffered by any person or organisation who may rely directly or indirectly on this article.