Do you know what happens during the trade mark registration process? In a previous blog, I looked at how to know when a trade mark should be registered, and now I am going to unpack the process in more detail for you.
First, do your due diligence
Before you even think about registering a trade mark you need to make sure that you have a reasonable chance of success. That begins with making sure you have chosen a name that is safe to build a successful business around. I have written more about the process of choosing a great business name in this blog.
It is important to remember that the trade mark examiners are required to reject trade marks that don’t fit within the guidelines in the Trade Marks Act 1995 (Cth). This means your application may be rejected if:
- the name includes a prohibited sign, such as words that are scandalous or contrary to law. If your business name includes a swear word, you will not be able to register it, for example;
- the name includes a geographical location or common place name, or an image of a flag;
- the name is a word or phrase that is commonly used by other people in your industry. You will not be permitted to register a trade mark that your competitors have a right to use as well. This often causes problems for any kind of name that is descriptive, in the sense that it describes your service or what you sell;
- the name is likely to be confused with any other name that has already been registered. This doesn’t just wipe out names that are identical to registered trade marks. Even names that sound substantially the same as other names risk being rejected, even if they are spelt completely differently, and even if only part of the name is the same.
To be registered, your name has to be capable of distinguishing your goods and services from others in the same industry. If you run up against one of these objections, you may be able to make your trade mark more distinctive by combining it with a graphic logo. Another option is if you have been using the name for an extensive period of time, you may be able to counter the objection by proving your history of use and showing that it is still functioning as an active trade mark. This involves submitting evidence to show that consumers and members of the public associate that name with your business.
Next, choose your classes
When you register a trade mark, your protection is limited to the country where it is registered, and to the classes that you have registered in. All of the possible goods and services – over 60,000 of them – have been divided into 45 classes. There are 34 classes of goods or products, and 11 classes of services. These classes can be fun to investigate as they are an amazing grab bags of loosely related items.
In order to decide what your relevant classes are, you need to begin by asking what do you get paid for in your business – what do you sell to make your income – and what type of business are you running. What do your clients know you for?
There are likely to be many things you do in your business, like your marketing activities, that are essential to running your business, but they are not the core of what you sell. Say I started selling t-shirts with my logo and slogans on them. I would not register in class 25, which includes clothing, because I am not in the business of creating and selling clothes, I am just offering them as a promotional item. Instead, I would register in class 45, which includes all kinds of professional services, including legal services. I would also register in class 41, which includes all kinds of adult training, workshops, speaking engagements and other learning experiences. Another common class for online entrepreneurs is class 16, which includes everything printed on paper, such as books, manuals and other handbooks, or class 9 which includes downloadable electronic publications, such as ebooks.
The more classes you choose, the higher the cost of your application – but on the other hand, you don’t want to miss out on a class that is an important aspect of your business, so it is very important to choose your classes carefully. Once you have chosen your classes, you can either use IP Australia’s picklist to identify all of the items in that class that are relevant to your business, or get an IP specialist to draft a custom description for you. If you are going to use the Head Start process described below, then you must use the picklist. You can explore the picklist to your heart’s delight here.
(If you are choosing to do a Due Diligence Consultation with me, I will help you choose your classes in that consultation.)
Ownership of your trade mark
You have done your due diligence, you have chosen your classes, and narrowed down your picklist. Time to submit your application, right?
Not quite. The next thing to consider is who is the appropriate person or entity to own your trade mark. Many financial advisers and accountants advise setting up a company whose purpose is to own your intellectual property assets, such as your trade marks. This effectively isolates and protects them if your business gets into trouble. It is like an additional insurance policy.
Of course, if you are a sole trader, all of your assets are already at risk including your personal assets, so this might be a good time to consider whether you are ready to change your business structure. If you are already trading through a company, setting up a separate company to own your IP has a number of advantages:
- it will prompt you to be more aware of all your IP assets, to consciously consider the value of the IP assets you are creating for your business, and be more vigilant in protecting them;
- it will protect your assets from trading risks such as insolvency and legal action;
- it can help you develop a valuable portfolio of IP assets which can assist you in obtaining finance or selling your business, and
- it can have tax advantages.
However, if you are choosing to give ownership of your trade marks to a company that is not actively using them in the course of business – that is, it is not the one trading with the public, you will need to put a formal licencing structure in place. It can feel like a funny thing to do, when you are effectively the only person involved in both companies – why would you need to licence your IP to yourself?
Legally speaking it is very important. If the company that owns the trade mark can’t show they are actively using it, they risk losing it. The owner of a trade mark has to show that they have control over its use – that is, it is only being used by those who are authorised to do so, and the owner exercises quality control over that use. Similarly, if there is a problem and you need to enforce your rights under the trade mark, you may need to prove that it is being actively used with authority from the owner, and this requires a legal paper trail.
The application process
Head Start Stages 1 & 2
Once you have done your due diligence and have a good idea of potential problems with your application, and you have chosen your classes, the next step is to prepare and submit your application.
My clients are often surprised to learn that the trade mark application process takes a long time – at least 7.5 months from the date of lodging to final approval.
I generally recommend using IP Australia’s Head Start Process as this gives you a little more flexibility if your trade mark application does run into a problem.
To submit your application for Stage 1 in the Head Start process currently costs $200* per trade mark per class. Once the application is submitted, the trade mark examiner does their own due diligence, identifying any issues where your trade mark does not comply with the guidelines or potentially conflicts with an existing trade mark.
If problems are identified, you have a few days in which you can make changes to address those issues. For example, if the problem is that your mark is too descriptive, you may be able to resubmit it in a graphical format combined with a logo to make it more acceptable. If it is a major change, you may have to pay an amendment fee, which is $150 per class. If you suspect this is going to be likely based on your due diligence, it is a good idea to have your graphic version ready to go (as there is a very tight turnaround window before your application expires).
If your application passes Stage 1, the examiner will notify you that your trade mark meets the requirements in the legislation and has a high likelihood of being registered. You then pay the Stage 2 fee, which is $130 per trade mark, per class.
*costs as at October 2022
Examination to Acceptance
Once the Head Start process is over, your application becomes officially “lodged.” This means that it becomes publicly visible in the Australian trade mark database. The examiner now does a deep dive, thorough investigation of your trade mark, to make sure that all problems have been identified and that the mark is capable of registration. If you have used the Head Start process, it is rare for problems to arise at this stage, so it is just a waiting game. If the Head Start report identified problems, however, it is here that you have an opportunity to prepare and lodge your evidence for a history of use, or negotiate with a conflicting rights holder to allow both marks to co-exist on the register.
A trade mark must wait at least 7 months before being registered, so this phase often takes a minimum of 5 months, but can take much longer if you are dealing with an adverse report.
The Opposition Phase
Once you are finally notified that your application has been accepted, the Opposition Phase begins. Your application is now advertised officially in the Australian Official Journal of Trade Marks and the formal opposition stage begins. This lasts two months. During this phase, people who believe there are good reasons why your trade mark should not be registered have an opportunity to file an objection. If they do, you will be notified in writing. You have to pay a fee and submit evidence to register an objection, so it is not something that is done lightly, and you have an opportunity to submit your evidence and arguments in response.
After your trade mark has been formally advertised for 2 months, if no objections are received, it will be registered. Registration lasts for 10 years, and then can be renewed for another 10 years, and another, as long as you are still using it.
Registration means you have the right to display the ® symbol next to your mark. However, you MUST wait until it is formally registered to display this mark. It is actually a criminal offence under section 151(1) of the Trade Marks Act 1995 (Cth). You can be fined up to 60 penalty units, which is currently up to $12,600 (Crimes Act 1914 (Cth) s4AA(1), Crimes Amendment (Penalty Unit) Act 2017 (Cth) s1).
A registered trade mark gives you the exclusive right to use that name in relation to the goods and services you have claimed in your application, in the country(s) where you have registered it. If someone else uses the name (or one that is deceptively similar) you can demand they stop, and if they refuse, you can claim damages, without needing to prove any harm to your business. (This doesn’t always work in the global marketplace, as if the other person is overseas, it can be tricky to enforce an order for damages against them – so you really need to believe in the name enough to want to defend it. However, registration does have a deterrent effect, making people think again before they use your trade mark.)
A registered trade mark is not “set and forget” though! While registration acts as a powerful deterrent, you still have a responsibility to ensure that it is only being used by your business, and businesses that you authorise through a licencing arrangement. Due diligence is an ongoing requirement because if someone does infringe your trade mark, it is much more effective if you find them and put a stop to it early, before they have invested the kind of time and money that would make them want to argue.
How I can help
If you would like to know more about my Due Diligence Consultation, you can find it here.
If you are ready to proceed with a trade mark application and would like my assistance – either to process the application for you, or hold your hand while you do it yourself – go here.