Can I Use An Unregistered Trade Mark?
Many business owners are surprised to know that trade marks can exist even if they have not registered them. Like other forms of intellectual property, trade marks are often generated internally within a business. This is because business owners might use a name, logo, slogan, and even distinctive colour to distinguish their goods and services from others in the market. Over time, consumers begin to recognise these signs, forming part of the business’ brand. Although you can use an unregistered trade mark in day-to-day business practice, you should be aware of the following issues associated with:
- purchasing an unregistered mark; and
- enforcing your trade mark rights if a dispute arises.
What Are Unregistered Trade Marks?
Australian law follows the ‘first to use’ rule when it comes to obtaining rights to an unregistered trade mark. That is to say, you are the owner of a trade mark if:
- you are the first person to use a trade mark concerning a particular good or service; and
- no one has registered the trade mark with IP Australia.
To have rights to an unregistered trade mark, you must also be able to show that:
- consumers sufficiently recognise the trade mark as your business brand; and
- your goods and services have a sufficient reputation in the market.
If you own an unregistered trade mark, you may want to use the ‘TM’ symbol. Owners of unregistered trade marks use this symbol to notify the public that they intend to protect their distinctive trade mark from being copied or misused. Unregistered trade mark owners can also register their trade marks with IP Australia.
IP Australia is a government agency that, among many things, reviews and registers trade mark applications. If IP Australia accepts your trade mark application, you gain the exclusive right to use, licence and sell your trade mark for ten years from its filing date (and can renew it for subsequent ten year periods).
If you want to find out more about trade mark registration, feel free to contact one of our experienced trade mark lawyers.
Purchasing An Unregistered Trade Mark
If you decide to purchase an unregistered trade mark from its owner, there are some important factors to consider. Most notably, sellers who wish to transfer the ownership of their unregistered trade mark to a buyer must also transfer the goodwill of their associated business.
Goodwill is an intangible asset of a business. Goodwill comprises various elements within your business, including its reputation and customer base.
When purchasing an unregistered trade mark, it might be helpful to consider the recent Federal Court case of Kraft Foods Group v Bega Cheese. In this instance, the Court found that Kraft had not properly transferred ownership of its unregistered trade marks to the newly restructured Kraft Group. This was because Kraft did not transfer the goodwill of their business. Hence, Kraft remained the owner of the unregistered trade marks.
Since rights to unregistered trade marks are inextricably linked to the goodwill of a business, this may mean that you can only purchase an unregistered trade mark if you purchase its accompanying business. In any event, if you are purchasing an unregistered trade mark, it would be wise to seek relevant legal advice. Doing so can ensure that the sale goes as planned.
Enforcing Your Rights
Many business owners use unregistered trade marks when selling their goods and services. However, this can leave them open to competitors misusing their unregistered trade marks. As the owner of an unregistered trade mark, you can enforce your rights if someone has:
- passed off their own goods and services as your business’ goods and services; or
- engaged in misleading or deceptive conduct in a way that contravenes Australian Consumer Law.
Misrepresenting Your Goods or ‘Passing Off’
Put simply, passing off is when a person wrongfully misrepresents their own goods and services as being associated with yours. For example, if Apple tried to sell their products as Samsung products, using the same packaging and distributing the product through similar channels, Apple would likely be committing a civil wrong. In other words, the law prevents businesses from ‘passing off’ as another business.
In order to successfully pursue a claim for passing off, you must:
- establish that your unregistered trade mark has established a strong reputation in the market;
- prove that the wrongdoer has made a misrepresentation; and
- prove that you have suffered or are likely to suffer damage because of the misrepresentation.
Misleading or Deceptive Conduct
Another way you can protect your rights to an unregistered trade mark owner is by seeking protection under Australian Consumer Law (ACL). In a general sense, ACL prevents people or businesses from engaging in:
- misleading or deceptive conduct; or
- conduct that is likely to mislead or deceive consumers.
If someone misuses your unregistered trade mark and this causes confusion amongst consumers in the market, you could pursue a claim under the ACL. Whether a misrepresentation or deception has occurred will largely depend on the facts of your individual circumstance. Generally, a person or business will mislead or deceive consumers if they lead them to believe that your business has endorsed their goods or services or your business produces their goods or services.
Many business owners use unregistered trade marks when selling their goods and services. In Australia, you are the owner of an unregistered trade mark if you are the first person to use the trade mark concerning a particular good or service and no one has registered the trade mark.
If you decide to purchase an unregistered trade mark, you should note that the goodwill associated with the trade mark must also be transferred. Additionally, as the owner of an unregistered trade mark, you can enforce your rights if someone has misrepresented your business’ goods and services or engaged in misleading or deceptive conduct. If you have further questions about unregistered trade marks, our experienced trade mark lawyers can assist. Call us on 1300 657 423.
Frequently Asked Questions
No. You can face a hefty fine if your unregistered trade mark bears the registered symbol.
The cost of your trade mark application largely depends on how many trade mark classes you include in your application. A Headstart trade mark application will cost $330 per class included.