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Identity theft and protecting your brand

Intellectual Property Law News | October 2014

We are often asked by our clients to explain the concept of intellectual property ("IP"). IP encapsulates a number of different areas, such as patents, designs, copyright and trademarks and essentially protects the use of ideas. Your IP (in the form of your business' name, logo or brand) is one of your most important assets in an increasingly digital marketplace and any protections that you have in place must be maintained and kept up to date as your business changes or expands.

Protecting particular types of IP can require registration with IP Australia, who are the governing body for IP Australia wide. This government organisation assists companies and businesses with protecting their intellectual property rights. Designs, patents and trademarks are all types of IP which can be registered with IP Australia so that these IP rights are protected. It is also possible for IP to attract international protection through registration.

When branding or rebranding your company or business, it is important that you are aware of the risks involved. It is important to be cautious of competitors profiting from your brand, damaging your reputation or acquiring your customers by riding on the success of your brand. There is also the danger of your business expanding into areas where a competitor's goods or services are already protected. Where this behaviour results in damage to your competitor's reputation in these protected areas, they can make a claim against you.

Copyright

Under the Copyright Act 1968 (Cth) ("Copyright Act"), copyright protection does not require registration as it receives automatic protection. The Copyright Act offers protection for copyright in in 2 categories:

  1. Works: literary, dramatic, musical and artistic works including designs, plans, sketches; and
  2. Subject matter: Including film, broadcasting, sound recordings and published editions.

Protection of copyright will be for the life of the author plus 70 years, however copyright is often difficult to identify and to assert a valid claim. Where you are able to obtain the protection of a statute by registration under one the following statutes it is advisable to do so.

Trademarks

The Trade Marks Act 1995 (Cth) ("Trade Marks Act") offers protection to a company's trademarks by registration of a mark or sign (including words and logos) in connection with their goods and services. Your brand, whether it contains words, a logo, or both, can be best protected through registration under the Trade Marks Act and must distinguish your goods or services from those of your competitors. The registered owner of a trademark has the exclusive right to its use, and can authorise others to use it, for up to 10 years. Registration of a trademark can also be renewed for additional periods of 10 years. Unregistered trademarks may be protected by common law however registration may afford a stronger claim to your brand.

Designs

Where the design of a product is distinctive, registration of that design will protect the overall appearance of a product. A design will be registered under the Designs Act 2003 (Cth) and permits a registration to last for a maximum of 10 years before the design can be used freely without infringement. The scope of registration of a design is restricted to the product's appearance, such as a 2D representation of the product. The functionality of a product will not be protected by registering a design. If a design incorporates a functional component that is not limited to the appearance of a product, it is possible to protect this component through the registration of a patent.

Patents

Registration of patents protects the functionality of a product, inclusive of innovative and inventive subject matter. The Patents Act 1990 (Cth) protects the works (being a device, substance, method or process) of inventors, or persons who are entitled to be assigned the invention. There are 2 types of patents that may be granted:

  1. A standard patent for 20 years (or 25 years for pharmaceutical patents); or
  2. An innovation patent for renewable periods of 2 years up to a maximum of 8 years.

Innovative patents are faster and cheaper to secure and have lower requirements for inventiveness. For an innovative patent, the invention must have a feature of difference which significantly contributes to the manner in which the invention operates.

Other legal considerations for IP

When dealing with your branding and IP, there is a possibility or actual occurrence of people being misled or deceived by a brand, and its relationship to another brand. The "other brand" may be a brand that has a good reputation or a not so good reputation. Your investment in your IP can be affected by others trying to "pass off" as your brand or you may be at the receiving end of a claim from a competitor for "misleading" the consumer by representing a relationship with a similar brand.

Passing off

Passing off is an intentional wrong at common law and involves the misappropriation through deception of a competitor's goodwill or reputation. It includes fraudulent attempts by a person to pass off their goods or services as those of another and representations that falsely suggest that a relationship or connection exists with the products or business of another.

By using the IP of a third party without their permission, using their IP as your own or indicating to third parties that you are connected to a product or business can lead to a claim for passing off and subsequent claims for damages caused by the passing off.

Misleading and deceptive conduct

Section 18 and other provisions of the Australian Consumer Law ("the ACL") relate to misleading and deceptive conduct and the misrepresentation of qualities and features of goods and services. A breach of these provisions may allow a claim to be brought against you for damages that have been suffered as a result of your actions or omissions. The conduct by the offending party may be unintentional but that conduct must have the effect of misleading or deceiving the consumer and causing damage to the person bringing the claim.

Practical considerations

Before investing in the creation of your brand and developing your business' identity it is important that you undertake adequate market research to ensure that your business' name or identity are not too similar to that of a competitor or likely to deceive the public in any way. During an expansion of your business' goods or services, it is important to consider the potential competitors who may already operate in an area into which you wish to expand.

The writer has dealt with a recent example of an opposition to an Australian client's trademark application objection which was raised by a French company. The French company sought to prevent the Australian company from operating in the same product areas using a similar name to theirs. The basis of the opposition was that this would create confusion in the marketplace.

One way to resolve this matter, was to amend the trademark application so as not to create an overlap in the classes of services which are covered by the French company's trademark.

Another recent example of a purported "identity theft" arose from a claim by a well established restaurant against a newer restaurant in the same Local Government Area, the use of a commonly used Italian word in the new restaurant's name and brand constituted a "passing off" of the older restaurant's reputation. The new restaurant had engaged a local marketing company to do market research on the name of the new restaurant, however the marketing company had "missed" the potential conflict which would arise from the similarity in the names of the 2 restaurants. In dealing with this matter the recent decision of the courts in Modena Trading Pty Ltd v Canterella Bros Pty Ltd (2013) (102 IPR 382) provided a thorough review of the law to be considered where the words in dispute constitute commonly acceptable Italian words, and looks at whether persons can claim an exclusive right to these common words. In the Modena case it was determined that the Italian words used were descriptive of the quality of the goods they were branding and as descriptors ,the words were able to be used in the ordinary course of the business by more than one person, they could not be claimed as exclusive IP.

Your IP rights can include your brand, product designs, domain names, or your logos and are an important asset in many businesses that should be developed and maintained efficiently to avoid issues like those above. To avoid issues arising from competitors riding on the success of your IP or from either intentionally or unintentionally infringing on the IP rights of your competitors, you should consult a legal professional who can assist you with implementing an IP strategy to suit your business and protect your interests.

If you have any questions or concerns about Intellectual Property law or any other area of business or property law please contact Forum Law on 02 9560 3388 or www.forumlaw.com.au. We can also assist with any other concerns that you may have in relation to your business, conveyancing or property issues, wills and estates. We are conveniently located in the inner west of Sydney and we offer free parking for clients.


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