Business mentor: Making your mark in the world of bright ideas

Q. We have a fantastic new product and need to create a new brand around it. I presume we just get a domain name, perhaps register the brand as a company name and then start using that name as the brand on our product?

A. Small business sector specialist Sarah Trotman spoke to Marcus Woodhouse, intellectual property (IP) lawyer and associate of AJ Park in Auckland:

Contrary to popular belief, registering a domain name or company name does not give you the exclusive right to use that name in the marketplace. What you need is a registered trademark.

To develop and maintain a registrable trademark for your brand, follow this four-step process. By doing so, you are more likely to establish, and be able to protect, valuable goodwill under your brand.

Trademark creation

The first step is to get creative. You can use a marketing company or brain storm to come up with a name. Your trademark should differentiate your product from the products of others.

If the trademark is too descriptive, it will be difficult for consumers to identify with your product only. Preventing other traders from using the descriptive name in relation to their products is often difficult. Surnames and geographical names can cause the same kind of difficulties.

The best trademarks are those which have no meaning, or have a meaning not directly related to your product, or which cleverly allude to your product. If you are going to incorporate a logo or artwork with your trademark, it is best to be original.

If you do copy another person's work, you could be infringing their copyright. There are circumstances where you can copy another work, but I recommend speaking to an IP lawyer first.

Trademark clearance searches

The second step is to conduct searches to ensure your trademark is not already registered.

It is also important to conduct marketplace searches to see if another trader is already using the same or similar mark.

The consequences of not searching properly can be serious. The worst-case scenario is lawyers entering your premises with a court order to seize materials for use in court proceedings. You could be ordered to pay hefty damages.

Another outcome could be a costly rebranding exercise and loss of goodwill.

An IP lawyer is best placed to steer you through the trademark clearance process. He or she can also advise you whether your trademark is too descriptive of your product and whether it satisfies the other registration requirements.

If you plan to use your trademark overseas, it is important to search in the countries of interest as well. Brands that are available in New Zealand may not be available in Australia or other countries.

Trademark registration

If your mark is cleared for use, the third step is to apply for registration.

The trademark registration system is entirely separate from the company name or the domain name registration systems.

Potentially expensive conflict can be avoided by registering your trademark. Other traders will locate your mark when they search the records.

If you discover another trader using your (or a similar) mark, you can simply point to your registration to stop them, rather than having to prove your reputation in court.

Another important benefit is that trademark registration covers the whole of New Zealand so, even if your business is Auckland-based, you can stop others using your trademark elsewhere in the country.

You must also have a trademark registration in certain countries if you want rights there.

Another trader could register your mark overseas, even in a country where you have prior use, and then sue you for trademark infringement there.

Trademark maintenance

Here are some simple ways to maintain your valuable mark once it is registered.

Use your trademark continuously to avoid it being removed due to non-use.

Speak to an IP lawyer if you allow another party to use your mark to ensure the correct mechanisms are in place to protect the mark.

Prevent your trademark becoming generic. If your trademark is APPLE, it should be used in the form "APPLE computer" rather than referring to the computer as "an APPLE".

Use the symbol to indicate that the trademark is registered. The TM symbol indicates that the trademark is unregistered, but that the trademark owner claims proprietary rights in the word or logo as a trademark.

A trademark registration continues to exist as long as the renewal fee is paid every 10 years.

* More questions on branding and trademarks can be directed to Marcus Woodhouse at (09) 353-6639 or contact him at marcus.woodhouse@ajpark.com