Installing a trademark within the business world is a common practice employed by businesses in establishing and distinguishing between competitors with the same products or services. A trademark can become synonymous with a product or service and be the means with which consumers can quickly identify the business.
A trademark can be a brand or a name, a recognisable symbol, a catchphrase, a figure or mascot, or even lyrics. Any of these trademark types can be a vital addition to a marketing strategy for a business. For instance
Registering a trademark grants additional legal protection for businesses from their rivals copying or imitating their work. The purpose of a trademark being registered is to:
- Grant exclusive rights for using the brand name and authorise others to use the trademark (this is useful for franchisers and franchisees of a trademarked company)
- Create an asset that can be sold to others
- Protect against trademark infringement
Trademark infringement occurs when a business knowingly infringes on the intellectual property owned by another business that had been registered as a trademark. There are three circumstances where a trademark may be infringed.
- The sign is substantially identical to or deceptively similar to the existing trademark
- The goods or services are closely related or in the same description.
- The trademark is well known and indicates a link between the owner of the business and the product or service.
Knowing that infringing on a trademark can have legal consequences for your business where you may have to cease trading the product or service altogether
Infringing on a trademark can have legal consequences for you and your business, from costly damages to an injunction on the cessation of the trademark by the offending party.
A recent trademark infringement case was settled between an American company called Deckers and a shoe manufacturer in Australia regarding the sale of Uggs by the Australian business.
Ugg is currently a registered trademark to Deckers, who bought the trademark from its original registration owner in the 1980s. However, the term ugg is a colloquial term that Australians have used since the 1930s to describe sheepskin boots. The legal issue that arose is that the Australian manufacturer sold several pairs of “ugg” boots to American customers, infringing on the trademark rights of Deckers.
The outcome of the court case was in favour of Deckers, despite the Australian manufacturer’s defence that the term “ugg” should never have been a trademark in the first place. The court ruled that, while ugg may be a generic term in Australia, it had no such meaning in the United States. It also ruled that the term was not subject to the “doctrine of foreign equivalents,” a legal guideline in the United States that says foreign words for categories of items cannot be trademarked, and that Mr Oygur had willfully infringed on Deckers’s trademark.