10 Common Myths about Trade Marks

Breaking Down Common Trademark Myths and Misconceptions

Despite trade marks being a part of our daily lives everywhere (think about Nike, Coca Cola, Tesla, Facebook/Meta), trade marks continue to be greatly misunderstood by many traders and consumers. Understanding the common myths about trade marks and understanding the truth can help you make the most of your potential trade mark protection and steer clear of any costly trade mark disputes. 

In this article, we break down some common myths associated with trade marks. Let’s have a look. 

Myth #1: Registering your business name is the same as registering a trade mark 

Your registered business name is used by the government for tax and administrative purposes, and does not grant you any exclusive rights to the use of it as a trade mark, that is, as a badge of origin for your business.  

The authorisation of a business name only grants you the right to use your chosen business name for operation of a business, not its use as a trade mark to distinguish your goods and/or services from those of others. ASIC/ABN registers simply allow for the registration of those names if they are not in direct conflict with others, it doesn’t mean that you have ultimately the legal rights to use it if someone else was there first and is conducting the same business activities. That other business could have the legal rights to stop you from using the name if they were there first and either have a registered trade mark or have a reputation in the market that they can prove over those goods or services.  

Although your proposed business name is checked against existing business names and perhaps even registered trade marks during the incorporation process, unregistered trade marks which do not form a part of this check may also prevent you from adopting your business name as a trade mark. 

Myth #2: There is no need to register a trade mark 

It’s true that, over time, extensive and continuous use of an unregistered trade marks grant you some rights in Australia (“common law rights”). However, there are important differences between registered and unregistered trade marks and advantages of trade mark registration should not be overlooked.  

For one, pending or registered trade marks are cited against now trade mark applications by IP Australia. If someone files an application for a trade mark which is confusingly similar to your own pending or registered trade mark, IP Australia will flag the similarity and the applicant for the new trade mark will have to show that their mark is not confusingly similar in order to obtain registration. In this way, IP Australia takes steps to protect your trade mark rights without you having to do so much as lift a finger.  

IP Australia only checks the Australian Trade Marks Register for such similarities between a new trade mark and any existing marks – therefore, a mark confusingly similar to your own unregistered mark may be allowed. If this is the case, and the mark proceeds to registration, your only resort will be to initiate court proceedings to try to invalidate and remove the trade mark from the register at your own expense. 

Another substantial difference relates to enforcement trade mark of your trade mark rights. A registered trade mark is evidence of the exclusive right to the use of that trade mark in respect of the protected goods and services throughout Australia. But to enforce common law trade mark rights in Australia, you must first establish significant goodwill and reputation of this unregistered trade mark in relation to similar goods and/or services in the relevant industry. This threshold can be difficult to meet for many businesses and may lead to the inability to enforce common law trade mark rights against other traders. 

The point is, if you have a registered trade mark – it not only significantly reduces the chances of someone infringing on your IP, but also means that if you need to enforce those rights, you can rely on the Trade Marks Act, to enforce those rights instead of having to rely on misleading and deceptive conduct, common law rights where you have to prove the reputation and/or rely on the tort of passing off. It’s more straightforward to rely on the Trade Marks Act than just common law rights alone. It’s normally a faster and therefore less expensive exercise as well.  

For example, if a client comes to us that is being threatened with trademark infringement and the other side has a registered trademark, it’s sometimes a very different conversation with different advice (depending on the situation) than if the other side does not have a registered trademark.  

Myth #3: Trade marks promise worldwide protection 

There is no such thing as a worldwide trade mark (or global trademark). We as a world would have run out of names a long time ago if that was the case. If you have registered a trade mark in Australia, you cannot expect it to be enforceable in the US, for example. If you are (considering) expanding your business to other countries, you need to register the trade mark in each country.  

It’s important to remember that you should also consider protecting your trademark in countries in which you manufacture to ensure protection and enforceability of your trademark rights in that manufacturing country too. 

Myth #4: You own the trade mark whether you use it or not 

Anyone can submit an application to IP Australia to try to get your trade mark removed from the Register due to bad faith at the time of filing, or non-use over approximately the last 3 years. You can defend the bad faith removal application to show your good faith at the time of filing, and the non-use removal application by providing evidence of use. 

IP Australia has implemented these rules to prevent “trademark squatting” and to ensure unused trade marks don’t needlessly block new trade marks from achieving acceptance.  

Myth #5: A trade mark can only be a word, phrase or logo 

Although these are the most popular forms a trade mark may take, a trade mark may be any of the following types in Australia: 

• Figurative (combination of words and a logo, even a hashtag);  
• Certifications; 
• Series; 
• Sound; 
• Movement; 
• Shape; 
• Colour; or 
• Scent. 

Myth #6: There is no rush to apply for a trade mark 

The first person to file for a trade mark is generally the person entitled to its registration in Australia (subject to exceptions obviously). If your business is already using the trade mark in the course of trade, but your trade mark has now been registered by someone else, you will need to initiate Court proceedings to invalidate and remove the trade mark from the register.  

It’s also important to keep in mind that it takes time to have your trade mark application proceed to registered status. At best, a trade mark in Australia can be registered within around 8 months from the date of filing the application (unless you try and expedite it).  

In many cases, applicants face one or more objections to overcome during examination before their application can proceed to acceptance and publication. So the point of the story is, the sooner you file your trade mark application, the sooner this process begins! 

Myth #7: If someone has registered a trade mark, no one else can register and/or use the same trade mark 

The scope of protection granted by your registered trade mark rights is defined by the goods and/or services listed in your trade mark registration. This allows for identical trade marks to be registered and used by different owners, as long as co-existence of these trade marks for their respective goods and/or services won’t cause confusion in the Australian marketplace. e.g. Dove (soap) and Dove (chocolate). Again, we would have run out of names long ago if this was the case.  

The basic premise of this is that businesses can use the same trade marks to distinguish their goods/services from other businesses if an ordinary person is not likely to confuse the 2 brands. No reasonable person is going to confuse McDonalds accountants with the fast food chain.  

Myth #8: IP Australia will inform you of any conflicts 

IP Australia doesn’t police your trade marks or inform you regarding any potential conflicts, except when your trade mark is causing an objection for another one’s new trade mark application and they are able to successfully overcome this objection by supplying evidence of their use in the marketplace. 

It is good business practice to have your trade mark representative search the relevant Trade Marks Register(s) regularly to ensure there are no other traders trying to register a mark similar to yours for similar or overlapping goods and/or services. 

Myth #9: If I don’t know anyone that’s using a similar trade mark, I don’t need a registered mark 

Registering your trade mark is beneficial irrespective of your intention to enforce your rights. A trade mark registration represents a source of potential liability to anyone thinking of adopting a confusingly similar brand, and can possibly resolve any future trade mark disputes without going to court. A cease-and-desist letter (also called a “letter of demand”), in which you refer to your valid trade mark registration and their infringing conduct, is often all that is required to put an end to infringing activity. You should definitely seek professional expert advice before having that correspondence sent.  

Myth #10: There’s no reason you need to hire a trade mark lawyer or representative 

Like anything in life, if you don’t do something all the time, you’re more likely to make a mistake. We don’t prepare our own tax returns – we get an expert to do them for us and provide us with advice. The consequences for DIY-ing these important things are so high and it’s really dangerous.  

We constantly see lots of trademarks being filed on the registers that are either completely unenforceable or do not provide enough adequate protection over the trade mark by way of activities.  

IP Australia does make it relatively easy for self-filing applicants. The problem is that so many people are enticed by that relative ease that they don’t file applications properly and then have to end up engaging professionals to fix them which ends up being more costly (or worse, have a trade mark that the business thinks is protected, and then is not – which can cause all sorts of problems later down the track).  

For example, a poorly drafted or incomplete trade mark application may significantly limit the scope of protection for your trade mark, and may not provide you with the necessary protection for your business and brand. 

Many trade mark applications also don’t instantly proceed through to approval and registration. Instead, an Adverse Examination Report will be issued by IP Australia, detailing one or more objection(s) due to availability or registrability of your trade mark. Expert knowledge and experience dealing with these reports and objections is often required to successfully overcome those objections in time. 

When you speak to an expert, they’ll be able to advise you on the relative prospects, conduct a search and give you some practical tips as the advice will differ greatly depending on the proposed trademark and what is currently on the IP Australia register and out there in the market. This we have found is invaluable information and advice. As the old saying goes, “measure twice and cut once”.  

Having a representative appointed to your trade mark also ensures that you are informed and reminded of any upcoming deadlines, such as the deadline to renew your trade mark registration every 10 years. It would be unfortunate to lose the rights to a strong trade mark by simply omitting to renew registration thereof in time. It’s also great to know that any official correspondence from IP Australia or correspondence from another trademark owner won’t be missed (because of a change in address for instance in that 10 years). We have seen this proven fatal to many marks because official correspondence was sent and missed as a result of businesses not having the correct address for service. It’s something that gets missed so often as it isn’t something that businesses will think about if they move office/home/PO box for instance, because there’s no annual renewal correspondence to remind them.  

Key Takeaways 

In Australia, there are many common myths and misconceptions about trade marks, their value and the way they help your brand and business. Our trademark attorneys and trade mark lawyers can inform and advise you about the trademark process, will conduct a preliminary review of your potential new trade mark before starting the filing process, can advise you of the prospects of receiving objections, and the potential length of your application process. We will guide you through the entire process.  

For more information or a clearance search of your potential new trade mark, contact us now for a complimentary phone call with one of our trade mark experts. 

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