Protecting your brand in overseas markets: What’s the point?

A trade mark is effectively a “sign” which may be a word, letter, number, device, shape, colour, sound and even a scent¹. 

The sign that your business adopts in Australia or elsewhere around the world will be “the” sign that is recognised by your customers and equally important, distinguishes your business and its product or service from those of your competitors.  Whether you are aware of it or not, your sign does other things also.  When a consumer sees your sign on a product or used to advertise a particular service, your sign is telling your customers that your products or services will consistently yield a level or quality or standard that is only associated with your business and its products or services.  For this reason, a sign is a very valuable tool which left unprotected locally and abroad, can cause your business to suffer significant loss and damage. 

Do not allow your business to fall prey to imitators and unscrupulous third parties attempting to take advantage of your reputation and the goodwill associated with your business by flooding the market with infringing products or offering less than adequate services.  By developing and committing to an intellectual property protection strategy in both local and overseas markets where you are conducting business or intend to do so, you will be preserving the value of your business and giving yourself tools to defend your company’s intellectual property rights against third parties.

Trade mark protection is the key

Many Australian businesses are aware that trade mark protection is an important commercial preservation strategy for conducting business in Australia.  However, many Australian businesses overlook this same importance when dealing with overseas markets.  Increasingly, a number of our clients are expanding their business interests outside of Australia and consequently should give consideration to protecting their brands overseas.

We all know that China is one of the world’s primary manufacturing markets so it is not uncommon for business owners to source products from China relatively cheaply for resale in Australian or other overseas markets.  China is also unfortunately, one of the leading markets for the production of counterfeit goods.  Since the World Trade Organisation estimates that 2% of all world trade is in counterfeit goods, the value of counterfeit goods imported into the US and EU from East Asia (the bulk of which come from China) is thought to be in the order of $25 billion annually.  In light of this significant risk (not limited to expensive designer handbags), lesser expensive consumable products such as cosmetics, electronic goods, food and beverages have all been affected by the counterfeit trade causing harm and in some cases serious illness to unsuspecting consumers who purchased an inferior product because it “looked” like the genuine product².  

In addition, counterfeiting damages brand owners’ reputations and lowers consumer confidence in the affected brands.  Counterfeiting also adversely impacts brand owners and retailers selling legitimate products by causing missed sales opportunities and actual job losses by manufacturers and retailers.

Brand owners can take various legal, technological and business steps to prevent or at least minimize counterfeiting.  This includes not only registering your trade marks in all jurisdictions where you sell product, but also in jurisdictions where your products are manufactured; recording your trade marks with customs offices; maintaining watching services; creating anti-counterfeiting positions within your company; and monitoring online websites closely in light of the significant and growing number of websites engaged in the “business” of counterfeiting³.

Snapshot: Chinese trade mark protection

One way to protect your intellectual property rights in China is to ensure that your business has filed and registered its brand for trade mark protection in China.  As in Australia, generally speaking, a registered Chinese trade mark will allow your business to enforce its intellectual property rights in China against third party infringers. 

The difficulty with acquiring trade mark protection in China is that unknown third parties may have already registered your business’ brand or a version which looks substantially similar to your business’ branding, without your knowledge.  Some make it a business of registering foreign intellectual property assets including domain names for the sole purpose of selling back to the original foreign owner the rights to use that same property in overseas markets⁴.

China adopts the “first to file” rule.  This means that in the case of competing trade mark applications, prior or earlier use in China (what we recognise as a right of common law ownership in Australia) is not generally considered, so, the preceding (alleged infringing) trade mark application may acquire trade mark protection in China before a bona fide trade mark application⁵. 

There are of course ways to address this issue by filing an opposition proceeding against the earlier alleged infringing trade mark application with the help of a Chinese trade mark agent, but this process can be long and costly.

In many cases, brand owners may find themselves attempting to claw back their own intellectual property (or infringing registered versions of their trade marks) to mitigate any damage to their reputation in China (or any other country).  This process is costly and time consuming especially when one is faced with unfamiliar foreign laws and procedures. 

A global approach

If you are contemplating protecting your trade mark in any foreign country and you are frightened by the cost of using foreign trade mark lawyers, you may want to consider filing a Madrid Protocol trade mark application (MPA).  A MPA may be filed in 94 countries around the world, although there are some exceptions such as Canada. It is simply a method of facilitating the filing of trade mark applications in a number of countries simultaneously⁶.

The MPA process is a relatively easy and cost effective way to manage an overseas trade mark filing program because the MPA is filed through the Australian Intellectual Property Office (AIPO) which can be simpler and less expensive than applying directly to each country.  After the MPA has been filed with the AIPO together with the appropriate filing fee, the AIPO will then forward a copy of the MPA to each country nominated on the MPA for examination in accordance with the trade mark laws of the nominated country.

The ease of the MPA process is further justified by the manner in which the examination process is conducted.  Once a country has examined the MPA, that trade mark office will forward a response to the Australian Madrid Protocol Applicant (AMPA) to deal with usually before a short deadline.  At this point, the AMPA should anticipate incurring additional costs.  If an AMPA is forced to address any objections which have been raised by any foreign country, then the AMPA will need to seek assistance from a foreign trade mark lawyer⁷.

Additional benefits of filing a MPA is that you only need to make a single request to make changes to or renew international registrations and you also have the ability to make subsequent designations in other Madrid Protocol countries at a later date.

If you are contemplating an international trade mark filing programme, it is important to ensure yourself (as best you can) that your proposed brand is not infringing any third party rights outside of Australia.  You can provide yourself with a measure of comfort by conducting overseas trade mark searches using a qualified trade mark lawyer in your selected country.

The cost of conducting due diligence before you embark on a foreign trade mark filing programme may be expensive for many brand owners.  However, the risk of defending trade mark infringement proceedings in a foreign jurisdiction or being forced to remove your products from a particular overseas market will outweigh the cost of conducting due diligence at the earliest opportunity. 

If you would like to obtain more information about protecting intellectual property rights in Australia or internationally, please contact Sunni Wentzel, Trade Mark Attorney, on +61 8 9288 6750 or sunni.wentzel@lavanlegal.com.au.