Common Law Capers

The firm Lawfully and its principal Gibson Owen are well able to advise you on any new trademarks to ensure that a search is carried out to minimise disappointment, subsequent rejection and disputes. Where a client has built up a reputation and goodwill in a trademark or trade name without registration then he must at some time address the question of registration.

Up until registration, his trademark would be called a common law mark and he runs the risk of finding after many years of business that there is a prior registration of a similar name in a similar class of goods. He may find that there is a similar name which has been in the market place unregistered but with a commencement date prior to that of the client's first usage.

Upon addressing the matter of registration the client is confronted by having to carry out searches to establish what identical, similar or deceptively similar marks are on the Trademark Register or in the market place with a priority date well before the client's first stated usage.

Common law rights are those rights you can enforce by an action without primary reliance on statute law.

The Designs Act, Patents Act and Trademarks Act all give you statutory rights as an incidence of registration of your trademark or invention. Valuable enforcement rights will arise as an incidence of such registration.

Having developed a reputation, goodwill and a significant capital value attaching to the unregistered trademark, the owner must then contemplate the fact that there may be prior registrations that are similar or deceptively similar or where another business, perhaps an opposition business, has been using their mark to develop goodwill and reputation predating that of the client's first usage.

Where a contest develops over who has the prior right to the name, there is a real prospect that the client would not only lose the contest but lose significant capital such as the removal of its name, the loss of its profits for the period of conflict and the obligation to start again with a new name, which in turn can amount to losses of immense amounts of capital.

The ownership of a common law trade name is an excellent example of playing Russian Roulette with the company's capital.

Where a company proceeds to adopt and assume a trademark that is unregistered there is a very real likelihood that it will be tempted to describe attributes of its product or service in that name. An excellent example would be the name Bankstown Smash Repairs. It is not appropriate to identify a geographic region in a name and it is not appropriate to identify the product or service in the name.

Very often the names that are chosen are names that are generic or inappropriate and should remain available to all of those who compete in that industry. An example of such words is 'smash repairs'.

It is always best to invent a name which has nothing to do with the product or its attributes. It is usually too late to warn a client on these factors when they have developed goodwill and reputation at common law.

Where you have given the right of exclusive use of your trademark to a licensee then usually you will have given that licensee the right to protect the intellectual property against invaders and trespassers.

It is possible that the exclusive licensee is not interested in protecting the reputation attaching to the trademark property, but as the registered proprietor you may feel you must protect the integrity of your trademark and you can do so provided you have reserved those enforcement rights during the preparation of that licence. The need to take action can arise during the course of the license or after its termination.

There could be many commercial reasons why a licensee does not want to spend funds on fighting invaders and trespassers and it may fall to you to defend the integrity and reputation of the trademark.

If you have failed to draft the license correctly in not reserving to yourself the right to supervise the quality of the licensee's products with regularity then you will have difficulty in protecting that integrity and reputation.

Not only must you reserve to yourself the right to supervise quality but also you must exercise that right and not appear to abandon it by failure to supervise for lengthy periods or failure to supervise regularly.

In addition a licensee may feel that when the exclusive license lapses he has adequate momentum in his product and reputation not to bother with a renewal of the exclusive license.

Where there has been a failure by the Licensee to renew the license, the registered proprietor must ensure that the reputation and goodwill attaching to a trademark have expressly re-vested in him as the registered proprietor.

Whilst these requirements seem to be only incidental to the main business of granting rights to a licensee and receiving royalties from him it is obvious that the mark could be seriously imperiled unless the above two factors are treated with detailed attention in the license document.

Continuing use and development of reputation and goodwill in an unregistrable mark can eventually allow its registration. The unregistrable mark can become known in the eyes of the market or the public as one that distinguishes the owner's goods and/or services from those of his competitors. Upon such proof being established, which carries a very heavy burden to discharge, such an offending mark can be applied for and may be approved for registration.

It is far better to take advice before commencement of use of a mark so as to ensure it does not offend against other marks and therefore attract lawsuits and opposition to registration. It is possible to offend against another mark registered or unregistered by direct conflict or by using a mark that is deceptively similar to another mark.

Any interloper or trespasser will be easily put to heel if he is offending against a registered mark in the same or similar classification for goods.

Injunctions, serious pecuniary penalties, claims for damages and an account for profits can be directed to the offending user/owner. http://www.lawfully.com.au