How To Choose Legally Sound Trade Marks For Your Clients: A Guide For Creatives.

Written by Principal, Jennifer Tutty , Sebastian Marcu and Alyce Evans .

Are you a creative agency, graphic designer, brand strategist or otherwise involved in the creation of brands for your clients?

Yes? Then you know all about the importance of creating beautiful, unique and memorable brands for your clients.

However, when it comes to creating brands assets (brand names, logos, slogans, etc), are you also considering the following legal questions during the brand creation process?

• Is the proposed brand already owned by another business?
• Would your client be able to register the brand as a trade mark?
• Would your client be able stop other businesses from using the trade mark?

Why does this matter?

If you design and deliver a brand asset for a client without considering and having answers to the above questions, the unfortunate reality is that your client may not be able to exclusively use or own the brand asset. Or, worse still, they may infringe the rights of another business by using that brand asset.

In this week’s blog, we break down trade mark law as it applies to the work of graphic designers, brand strategists and creative agencies. We also provide guidance on how you can create legally sound brand assets for your clients.

What is a Trade Mark?

Brand assets such as words, slogans and logos are legally considered ‘trade marks’.?In addition to words, slogans and logos, sounds, scents, shapes, aspect of packaging, or a combination of these can also be ‘trade marks’.

A trade mark is a ‘badge of origin’ and helps distinguish your client’s brand from its competitors.

In Australia, a trade mark can be legally registered via the?Trade Marks Act 1995 (Cth)?(the Trade Marks Act).

Creating ‘registrable’ trade marks

Under the Trade Marks Act, there are certain requirements that trade marks need to meet in order to be registrable. For example: a trade mark cannot generally be registered and will be objected to by IP Australia if:

• The trade mark is ‘substantially identical’ or ‘deceptively similar’ to an existing pending or registered trade mark.
• The trade mark is descriptive of a characteristic of the goods and services.
• The trade mark contains a geographical reference.
• The trade mark is a commonly used surname.
• The trade mark contains restricted words.
• The trade mark contains prohibited names.
• The trade mark contains scandalous words (i.e. certain swear words).

Note: There are sometimes ways to overcome the above objections (although we will not focus on the options in the current blog).

Why Should Your Clients Register Their Trade Marks?

While a trade mark is not legally required to use a certain brand name, logo, or other brand asset, we highly recommend all businesses register their trade marks. Why? Here are some key reasons:

1. Trade marks provide exclusive rights and can help prevent copycats

• Registration of a trade mark gives your client the exclusive right to use their trade mark for the nominated goods and services throughout Australia.
• Your clients can prevent other businesses from using their trade mark as well as some similar trade marks.
• While your client can still have trade mark rights without registering them, unregistered trade marks (also known as common law trade marks) are significantly harder to enforce.

2. Trade marks assist with commercialising brand assets

• Registered trade mark protection also makes it easier for your client to commercialise their brand assets through sale or licensing avenues.
• The commercial value and associated goodwill attached to your client’s brand assets and business increases significantly.

3. Gain a defensive mechanism against certain infringements

• Trade mark registration is also a complete defence to any actions or allegations for trade mark infringement and passing off that might be levelled against your client in relation to the use of their trade mark.

4. Continue to build a brand reputation over the years

• Trade mark registration lasts for 10 years and can be renewed indefinitely for further 10 year periods at a low cost.

What Should You Know About Trade Mark Classes?

Before lodging a trade mark application, your client will need to consider what classes it will apply in.

There are 45 classes of goods and services.

When choosing new brand assets for a client, it’s important to know that it’s possible to use the same trade mark in unrelated classes. For example, the trade marks ‘Dove’ (shampoo) and ‘Dove’ (chocolate) are both registered by different owners in different classes.?

When considering whether a trade mark is taken, you also need to consider what classes the prior mark is registered in.

It’s important to note that some classes are considered to be ‘closely related. Therefore, providing a definitive answer on whether a trade mark in a different class will be a problem for your client is always best left to the lawyers.

What Could Go Wrong… Why Legal Checks Need To Be Part Of Your Brand Creation Process.

Before your client chooses a new brand asset, your client should engage a lawyer to carry out a brand check.

If these checks are not conducted there could be some adverse consequences such as:

1. Your client may not be able to register the brand asset as a trade mark.

2. Your client will not have a clear understanding of whether they will legally own the brand asset. IP ownership is particularly important when it comes to selling a business or bringing in investors.?

3. If your client selects a name that is not easily registrable, they may find it difficult to stop another business from using the same or a similar brand.?

4. The brand asset may already be legally owned by another business.?If your client starts to use the brand, then the existing owner might send your client a cease and desist and allege trade mark infringement.?This may result in your client having to change their name or rebrand which may have catastrophic financial and brand implications for your client.

Who Should Be Conducting Brand Checks?

It’s possible for you to carry out some general checks of things like IP Australia’s trade mark database, the ASIC registers, Google and social media platforms. However, these should only be conducted by you to raise any immediate conflicts.

Before locking in a final brand asset for a client, you should always advise the client that:

• They should not lock in the name unless a legal brand check has been conducted.?
• Brand checks should always be carried out by a lawyer, preferably a trade mark law specialist.?

Additionally, it should be clear in your client engagement terms that you are not responsible for carrying out legal brand checks.

Even better, you should develop a trusted relationship with a law firm, who can promptly, and cost effectively carry out these legal brand checks for you and your clients.?

What if the client doesn’t want to pay for a legal brand check?

If your client doesn’t want to spend the time or money obtaining a legal brand check, we recommend the following to protect your business:

• Provide clear terms that the client is using the brand asset at their own risk; and
• You will not be liable to them in the future if there is a legal issue with their use of the brand asset.

If you fail to inform your client of the need to obtain a legal brand check before choosing their name, you open up the risk of the client alleging you have been negligent or failed to provide the brand services in accordance with your obligations under the Australian Consumer Law.

Your client may also look to blame you for issues surrounding their choice and use of the name in the future.

Are Brand Checks a Guarantee That a Brand Asset Can Be Registered As a Trade Mark?

Unfortunately, brand checks conducted by lawyers will not come with a guarantee that your client’s preferred trade mark can be registered.?Ultimately, it’s up to the trade mark office to make a final decision on whether a trade mark can be registered.?

It’s also important to note that each trade mark application goes through an opposition stage before registration. This allows members of the public an opportunity to object to trade mark applications.

As best practice, your clients should only start to use their brand asset after the application comes out of the opposition phase and is officially registered.?However, this is often too late, and clients will need to start to use the trade marks earlier.?They will need to do so a their own risk.

How To Create Brands Your Clients Can Actually Use?

There are a few key things you should do each time you create a brand asset for a client.

1.?Check the marketplace before finalising a short list of brand assets

As outlined above, conducting a formal, legal brand check should never be your job. However, it’s possible for you to easily check the following:

• ASIC business name register.
• Google.
• Social media platforms.
• Yellow pages.

If an identical and similar brand shows up, do some more digging on whether they are currently trading and what they do.?

If you or your client love a brand asset and want to keep exploring the brand despite potential conflicts popping up in your initial searches, always speak to your trusted legal advisor before eliminating the brand from your short list.?

There are lots of strategies lawyers can implement to help get around potential conflicts.

2.?Stay away from descriptive trade marks

You and your client should always be looking to register their new brand asset as a trade mark.?However, as outlined above, not all brands can be registered as trade marks.

Trade marks that are descriptive of the goods and services to which they are applied are often rejected.?Only after a significant amount of use and reputation might a trader get such a trade mark registered.

Therefore, be careful not to ‘describe’ your client’s business or the goods and services they sell in their brand assets.

For example:

• ‘Luscious Lips’ for a lipstick brand is descriptive. You are describing the results the lipstick might give its user.
• ‘Deliver To Your Door’ for a food delivery app is descriptive. It describes the process of the service (i.e. goods being delivered to a user’s house).

3.?Try to stay away from place names and surnames if possible

Trade marks that are place names and common surnames are usually rejected. Only after a significant amount of use and reputation might a trader get such a trade mark registered.

Therefore, ideally don’t select trade marks that are place names or surnames.?

For example:

• ‘Chapel St Barber’ is descriptive of the location of the barber, and will not be able to be registered, as it wouldn’t be fair on other hairdressers located on Chapel Street to stop them from using this phrase.
• ‘Smith Jewels’ includes a common surname and will be rejected in the first instance.

4.?Choose a ‘made up’ word

Admittedly, the trade mark register is getting quite full and lots of great brands are already taken.

A great alternative is therefore adopting use of a made up word for your client’s new brand asset. Made up words aren’t going to describe certain goods or services, and are a lot easier to protect as trade marks.

For example:

• ‘MOPWIX’ for cleaning products
• ‘JURSDN’ for perfume

5.?Choose a brand that is different to pending and registered trade marks

If your client’s brand asset is substantially identical or deceptively similar to a pending or registered trade mark (a prior mark), it will be rejected for registration.?

Working out what is ‘substantially identical’ or ‘deceptively similar’ is a complicated legal question, that can only really be answered by trade mark lawyers and IP Australia examiners.

However, when considering whether your client’s new brand asset will be ‘substantially identical’ or ‘deceptively similar’ to a prior mark, the following things will need to be considered:

• Visual and phonetic similarities between the trade marks;
• Whether your client’s trade mark is wholly contained in, or wholly contains, a prior trade mark; and
• The idea conveyed by your trade mark and the prior trade mark.

6.?Create a shortlist of potential brand names, logos and other brand assets

Firstly, offer up 3-5 brand asset concepts to your client. Recommend that the client engages a lawyer to carry out a legal brand check on their top 1-2 before moving forward with any further design work.

If the top marks are no good following the brand check, then you need to go back to the drawing board with the client.

7.?Make sure your client understands the importance of getting a legal brand check before choosing the final asset.

Lawyers can look at trade mark registers (only) or to the marketplace more broadly.?As part of the brand check, the lawyers can advise on whether the trade mark is taken, and whether it can be registered as a trade mark.

Armed with a brand check conducted by an IP lawyer, you and your client will have more information about the risks associated with using different brand assets.?

Your client can then make an informed choice about proceeding with a brand name they love (even if it comes with an element of risk).

At Studio Legal, we carry out brand checks for the clients of creative agencies, during the brand creation process. Contact us if you would like further information about our brand check services, and how we work with creative agencies.

Further Information:

If you have any questions about trade marks or about the laws and contracts that are relevant to creative agencies, please contact us through our?online form?or at?[email protected].

To learn more about trade marks and their importance in the world of branding, check out our blogs:

–?‘Top Trade Mark Tips: How to Use Trade Marks to Protect Your Brand’.

–?‘5 Key Steps to Take Before…Launching a Brand in an Emerging Market’.

If you run or work at a creative agency (or aspire to), you may also benefit from reading our blogs:

–?‘How to Deal with IP Rights when Contracting with Clients:?A Guide for Creative Agencies’.

–?‘Hiring an Influencer: What Agencies and Brands Need to Know about Employment Law, Super and Tax’.

Photo by?LUM3N?on?Unsplash

Written by Jennifer Tutty (Principal), Sebastian Marcu and Alyce Evans.

Published 27 March 2023.

DISCLAIMER

The information in this article is of a general nature. It does not constitute formal legal advice, and should not be relied on as such. Please see the full disclaimer in our website terms. Please contact Studio Legal if you are seeking advice about a specific legal matter.