Registered-trade-mark

Hidden costs of trade mark registrations

Few people in business, and few lawyers, appreciate the importance of integrating design and legal thinking in the two related processes of brand design and trade mark registration.

Experienced trade mark lawyers know that not all trade mark registrations are created equal. They don’t always tell clients this truth.

Each month hundreds or thousands of very low quality marks are registered by IP Australia.

IP Australia checks registrability under trade mark law. Its role is not to assess the overall and long-term legal quality of registrations for future defence against intruders.

Cost advantages of high quality registrations

As an analogy, think of car or land registration. Not all cars or plots of land have the same cost or value. Cost and value are not always immediately obvious, a point made very clear by the first of the three accompanying 1960s American VW ads.

Inexperienced clients and lawyers mistakenly believe in the myth that achieving registration and using the “R” in a circle symbol (®) automatically generates a monopoly legal right worth having.

The too rarely understood fact is a hierarchy of registered trade marks exists. There are higher quality registered marks, lower quality marks, and many registrations not even worth having. A higher quality trade mark registration more clearly maps the owner’s monopoly brand legal territory to:

  • avoid issues arising in the first place;
  • cost-effectively repel intruders (ie business competitors and infringers); and
  • secure higher value from business buyers, licensees, partners, investors, and financiers.

In dollar terms hidden registration and post-registration costs scale as set out below - the worse the registration the higher the longer-term legal costs.

  • No cost when legal disputes are avoided with higher quality registrations.
  • Less cost when legal disputes are resolved faster with higher quality registrations.
  • High cost when a claimed monopoly is to be defended with a legally weak trade mark registration.

What is a low quality registration?

It’s when registered trade marks face a real world test that hidden costs appear. A real world test is when an intruder approaches requiring firstly a legal demand letter (aka “cease and desist” letter), then a potential volley of letters back and forth, and if necessary court action. Both oiur anecdotal evidence and case law illustrate that higher quality trade mark registrations generally translate into shorter or no disputes, hence lower costs.

Matters that proceed to court action involve assessment of the legal quality of registered trade mark. The learning from case law is that while some registrations are highly protectable (ie have a strong or wide scope of monopoly), others are at the other end of the spectrum. This is often the case for descriptive marks.

Generally, the types of marks listed below should be avoided because even if registered, they will only be accorded weak protection. This is points are typically very poorly understood by clients, logo designers and even many lawyers.

  • Descriptive words or generic word marks – often found in dictionaries (eg using “DELICIOUS” as a word mark for a food product).
  • Unrefined or busy graphical marks, eg the whole of a package or label with all its various words, designs and logos (rather than the key word appearing on the label or package).
  • Unrefined or unoriginal logo marks.
  • Lengthy or unoriginal tag lines (generally the longer a tag line the harder it is to protect, eg “Our hamburgers are more delicious than other hamburgers.”).

In contrast a high quality trade mark registration in legal terms generates a legal buffer zone against competitors by maximising the brand’s distinctness, a term used in trade mark law.

How we work with clients

Our firm works with clients to generate very high quality trade mark registrations. This often involves dialogue between the client, the lawyer and the logo designer or brand consultant.

We prefer to work at the creation stage of venture or product names, logos, labels, package designs, tag lines, domain names, company names, business names and social media handles.

To summarise: Seek expert advice to achieve cost-effective, original and distinctive registrations which will maximise your monopoly trade mark rights.


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