Katarina Klaric, Principal, Stephens Lawyers & Consultants
Intellectual Property is one of the core assets of many businesses. Trade marks or brand names represent the identity of the business and goods or services supplied and are one of the most valuable marketing tools. Domain names linked to the business’s website, have become more valuable than real estate, with the exponential growth in the use of digital platforms, search engines and on-line retail marketplaces.
A business’s website, including graphic designs and user interfaces, photographic images and marketing and advertising videos, all of which are protected by copyright and/or design laws, are the on-line interface between the business and consumers.
The global availability of search and display advertising services via digital platforms and on-line marketplaces, has enabled businesses to reach larger markets and attract global customers. Significant reputation in a trade mark or brand name can be built through the use of advertising services of Google and other digital and social media platforms such as Facebook, Instagram, YouTube, TikTok, resulting in increased sales and revenue – increasing the value of the intellectual property of the business.
However, the internet and on-line digital marketplaces also provide an environment and tools which allow counterfeiters and scammers to proliferate. Infringing activities with poor quality or unsafe imitations can tarnish the reputation of the brand, lead to market erosion and result in erosion in revenue.
Strategies for the maintenance and protection of trade marks, brand names, domain names, designs, patents and copyright material are critical for maximising the value of the intellectual property and resulting revenue. There is not one ‘strategy’ which fits all intellectual property and digital markets. Strategies have to be developed and reviewed with changes in the on-line digital marketplaces including laws protecting intellectual property rights and regulating those markets.
This update provides an overview of some of the strategies that businesses can consider implementing for the maintenance and protection of their intellectual property rights in the on-line digital market environment and generally.
Strategies for Intellectual Property Maintenance and Protection
- Understanding What Intellectual Property is and Scope of Protection
The legal framework for the protection of intellectual property is complex covering trade marks, designs, patents and confidential information/trade secrets. Identifying the most effective way of securing protection for intellectual property that has been developed by the business requires consideration of factors including the nature of the product, lifespan of the product, scope for commercialisation and relevant markets, the different options for intellectual property protection and the scope, duration and costs of protection. This often requires the engagement of lawyers with expertise in intellectual property protection and commercialisation, particularly where the business does not have staff with this capability. The failure to do due diligence by seeking expert advice can be fatal and costly when it comes to seeking to establish ownership of intellectual property rights and enforcing those rights.
Case Example
| Hemmes Trading Pty Limited (the ‘Applicant’) is part of the Merivale group of companies which operates more than 80 restaurants, bars, pubs, hotels and function spaces in Australia. It owns the word trade mark ESTABLISHMENT (‘ESTABLISHMENT’) which its related entity had originally filed on 23 May 2001 – and had successfully registered it as a trade mark in Classes 9, 25, 41 and 42, which include restaurant, bar and hotel services. The ESTABLISHMENT trade mark was assigned to the Applicant in July 2009.
Establishment 203 Pty Ltd (the ‘Respondent’) operates a restaurant in Brisbane under the name ESTABLISHMENT 203, which it opened on 28 November 2023. It is part of a group of companies which run a family-owned beef business in Queensland which includes an abattoir, which had been given the establishment number 203 by the Australian Government in about 1997 under the system in which all abattoirs certified by the Australian Government. On 24 November 2023, the Respondent received a letter from the Applicant’s lawyers, referring to the impending launch of the Respondent’s restaurant on 28 November 2023 which had been announced on social media. The letter included a demand that the Respondent cease using ESTABLISHMENT 203 as a mark. The Respondent chose not to give the required undertakings. The Court found in favour of the Applicant’s claim of trade mark infringement and breach of the Australian Consumer Law and ordered that the Respondent be permanently restrained from using ESTABLISHMENT 203 and any other mark substantially identical to it in relation to any restaurant, café, bar, hotel or function services [i]. In arriving at its decision, the Court had to consider if the Respondent could rely on the defence in Section 122(1)(a) of the Trade Marks Act (Defence of good faith use of own name). The Court determined that the Respondent could not rely on this defence as it had failed to establish the requirement of good faith required to be able to do so, because:- – the Respondent did not conduct any trade mark searches at the time of initial adoption of ESTABLISHMENT 203; – the Respondent chose not to ask the company’s lawyers for advice on the proposal to use that mark when initially adopting it despite those lawyers having assisted the Respondent and its related group of companies for decades with trade mark matters. His Honour stated that “I regard both those matters as steps which an honest and reasonable person in the Respondent’s position would have taken”[ii]; – the Respondent’s use of ESTABLISHMENT 203 occurred after receiving the letter of demand from the Applicant’s lawyers notifying them of the Applicant’s prior registered trade mark; and – the Respondent had decided not to give the requested undertakings even though this meant that the Respondent might be sued for trade mark infringement. |
- Staff Training and Education in Intellectual Property
Staff training and education in relation to the basics of intellectual property ownership and protection is important to ensure that intellectual property ownership remains with the business and that the business does not make unauthorised or infringing use of third party intellectual property.
- Intellectual Property Audit and Review
Regular audits and reviews of the business should be undertaken by an intellectual property expert to identify all intellectual property that is owned or licensed by the business, how it is protected and commercialised, and adequacy of protection and risks of unauthorised use or infringement.
Intellectual Property audits and reviews enable businesses to identify gaps in their systems for the protection of intellectual property and make changes to remedy these gaps and maximise the value of their intellectual property.
- Intellectual Property Register
The business should keep and maintain an up-to-date register of all the intellectual property that it owns or licenses from or to third parties. The intellectual property register should include details relating to the authorship and ownership of the relevant works and intellectual property, registration details, licence agreements, renewal and expiry dates. The register should also identify any issues concerning ownership and validity of intellectual property rights, third party rights and/or claims, moral rights and potential risks associated with unauthorised use or infringement.
- Trade Mark Watch and Monitoring
An on-going watch of the third party trade mark applications, company and business name registrations and domain name registrations for substantially identical or deceptively similar names to those owned and registered by the business allows for early detection of potentially conflicting trade marks or infringing activities by competitors or imitators.
Businesses can file an opposition proceeding with IP Australia, Registrar of Trade Marks, opposing the registration of substantially identical or deceptively similar trade marks. Businesses can also apply to ASIC, company regulator, to have offending company names or business names cancelled. In addition, businesses can dispute the third-party domain name registrations and have the offending domain name cancelled.
The failure to monitor for conflicting marks can result in a competitor’s trade marks being registered, leaving the business with no option but to take court action to have the conflicting trade mark removed from the register – with no guarantee of success.
Case Example 1
| The Australian fashion designer, Ms. Katie Taylor (‘Ms Taylor’), who was born Katie Jane Perry, was originally partially successful in the Federal Court[iii] in her trade mark infringement case against the companies associated with the singer, Ms. Hudson, who had adopted the stage name “Katy Perry” in 2002 (‘Katy Perry’).
However, Katy Perry appealed the Federal Court’s decision and in November 2024, the Full Federal Court[iv] overturned the decision of the Primary Judge, leaving Ms Taylor with the costly option of seeking an appeal of the Full Court’s decision to the High Court or having her trade mark cancelled. The Full Court also ordered Ms Taylor to pay Katy Perry’s costs. Ms. Taylor had registered the trade mark “Katie Perry” in class 42 for “clothing and designing services” in September 2007. At that time, she did not appreciate that scope of trade mark protection was related to the classes of goods and services in which the trade mark was registered. Ms. Taylor also allowed the class 42 registration to lapse when she applied to register the “Katie Perry” trade mark for clothing in class 25. Thus, limiting the scope of her trade mark protection. In the Federal Court, the Primary Judge, in determining Ms. Taylor’s claim for trade mark infringement, had to consider whether the merchandise that was being sold in Australia under the “Katy Perry” mark by companies associated with the singer, Katy Perry, were clothes or goods of the same description. The Primary Judge held of the disputed categories of merchandise – footwear or shoes, headwear or hats, decorative masks and headgear, novelty jewellery, handbags and purses, bags and backpacks – were not clothes or goods of the same description as clothes[v] and accordingly the use of the “Katy Perry” trade mark in relation to these categories of goods was not a trade mark infringement.[vi] The Full Federal Court, in overturning the decision of the Primary Judge, held that ‘In concluding that the Katy Perry Mark did not have a reputation in clothes, the Primary Judge ignored the common practice of pop stars to sell merchandise including clothing at concerts and to launch their own clothing labels’[vii] |
Case Example 2
| MacDonald’s took Federal Court proceedings against Hungry Jack’s seeking injunctive relief, with the cancellation of the “Big Jack” registered trade mark, destruction of all advertising material and packaging containing “Big Jack”. MacDonald’s alleged that Hungry Jack’s had since July 2020 been using the “Big Jack” trade mark which is substantially identical to or deceptively similar to the “Big Mac” trade mark which has been registered since 1973. MacDonald’s also alleged that Hungry Jack’s acted in bad faith in registering the trade mark.
Hungry Jack’s applied to register the trade mark “Big Jack” in class 29 and 30 on the 14 November 2019 and the mark was accepted for registration and advertised on 14 April 2020 and the registration was published on 22 June 2020. No opposition was filed during the trade mark opposition period. |
On-line monitoring of digital platforms and digital market places including the use of AdWords by competitors can assist in detecting infringing activities before these adversely impact on brand reputation, resulting in sale losses and diminished revenue and intellectual property values.
- Some Proactive Measures to Protect Intellectual Property
In addition to the registration of business names, domain names, trade marks, designs and patents, businesses can also contractually protect their intellectual property through confidentiality agreements, ownership of intellectual property agreements, employment agreements and licence agreements.
In the case of digital copyright works such as computer programs, artistic and musical works, photographic images, films and other audio visual works, businesses can also implement technological measures to protect the works from unauthorised use or copying, such as – password protection, encryption and read only files and the use of watermarks and flags/other markers that assist in identifying unauthorised use and copying.
All trade marks, copyright works, designs and inventions for which intellectual property ownership is claimed should include appropriate IP notices, to indicate that they are registered or subject to copyright or other intellectual property protection. The IP notices must comply with the relevant laws.
- Dealing with Intellectual Property Infringement or Unauthorized Use
How a business responds to infringement or unauthorised use of its intellectual property requires consideration of a multitude of factors including the infringing activities, the parties involved, the impact on the business and the costs of taking enforcement action to stop the illegal activities. Intellectual property litigation can be very expensive and complex. In some cases, the costs of IP litigation can exceed the benefits.
Strategies and response plans for dealing with infringing or unauthorised use of a business’s intellectual property may include-
a. IP insurance to cover the costs of responding to infringement activities and taking legal action for infringement including court proceedings for orders to stop the illegal activities and payment of compensation.
b. On-going monitoring of on-line digital platforms and market places.
c. The use of take down notices which are issued to operators and/or owners of on-line platforms and market places for removal or take down of websites involved in infringing activities or for the removal of infringing content.
d. Selective enforcement activities to deliver messages that the IP owner will not tolerate infringement or unauthorised use of its IP. These activities should be supported by appropriate media coverage and messaging.
e. The use of Australian Border Force (“ABF”) to seize goods which have been manufactured outside of Australia and imported into Australia where the goods are counterfeit or infringing goods. Both the Australian Trade Marks Act[viii] and Copyright Act[ix] include mechanisms for Trade Mark and Copyright owners to request Australian Border Force to seize counterfeit or infringing goods by lodging a Notice of Objection to importation of those goods into Australia.
Disclaimer: This article is not intended to be a substitute for obtaining legal advice.
Authored by Katarina Klaric, Principal, Stephens Lawyers & Consultants. The contribution of Rochina Iannella in updating the Case Examples in this article is acknowledged.
© Stephens Lawyers & Consultants, 29 January 2025 – This is an updated version of the original article authored by Katarina Klaric on 12 June 2023.
For further information contact:
Katarina Klaric, Principal
Stephens Lawyers & Consultants
Melbourne Head Office
Suite 205, 546 Collins Street, Melbourne VIC 3000
Phone: (03) 8636 9100
Sydney Office
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Phone: (02) 9238 8028
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Website: www.stephens.com.au
All Correspondence to:
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[i] Hemmes Trading Pty Limited v Establishment 203 Pty Ltd [2024] FCA 1100 at [2] and [90]
[ii] Ibid. at [65]
[iii] Taylor v Killer Queen LLC & Ors. [2023] FCA 364 – MARKOVIC J
[iv] Killer Queen, LLC v Taylor [2024] FCAFC 149 – YATES, BURLEY AND ROFE JJ
[v] Taylor v Killer Queen LLC & Ors. [2023] FCA 364, [292]-[377]
[vi] Ibid, [583]
[vii] Killer Queen, LLC v Taylor [2024] FCAFC 149 at [291]
[viii] Sections 132-137 Trade Mark Act 1995 (Cth)
[ix] Section 135 Copyright Act 1968 (Cth)