An Update on Protecting Your Brand

Rosie Clark, Wade Pearson

Many businesses benefit from protecting their brand name through registered trade marks. Two recent Court cases shed light on the finer points of protecting your brand under trade mark and fair trading laws.

In the first case (National Storage), the company’s brand wasn’t distinctive enough to prevent a competitor entering the market under a similar brand. In the second case (Moodle), the company’s failure to renew its trade mark led to a Court case to protect its brand.

The lessons from these cases are that if you have (or want to have) registered trade marks, it’s important for you to make your brand as distinctive as possible; and keep on top of renewals.

The National Storage case concerned two companies with “national storage” in their names. National Mini Storage Limited (NMS), an Auckland-based company, had a registered trade mark over the phrase “National Mini Storage”. National Storage Limited (National Storage), an Australian company, decided to enter the Auckland market for self-storage.

NMS was concerned that the similarity in names might confuse or mislead customers into clicking on web results for National Storage, when they were really looking for NMS. Unfortunately for NMS, it could not prevent National Storage from operating generally under its own name (without the word “Mini”).

The Court found that there was insufficient evidence of actual (or potential) confusion in consumers who search the internet for self-storage providers. National Storage had also undertaken not to target the phrase “National Mini Storage” in its online advertising, which helped its case.

Here, the words “national” and “storage” were not particularly distinctive, as they simply describe common features of businesses operating in the self-storage market.

If you’re considering obtaining trade mark protection for your business name, try to make your brand name as distinctive as possible instead of using generic or descriptive words. This should help with registration, and may also reduce the likelihood of other companies with similar names being able to enter the market under that name.

MOODLE is a learning management system, developed by a Mr Dougiamas, who registered trade marks to protect the MOODLE brand.

In this case, Mr Dougiamas had contracted Mr Benner in 2005 as a licensed partner. This allowed Mr Benner to use the MOODLE brand and trade marks. This relationship didn’t last long. From 2006 onwards, Mr Benner was not associated with MOODLE, and he wasn’t entitled to use the brand.

Mr Dougiamas later discovered that Mr Benner had registered domain names containing the word “Moodle”. These websites referred to on-line learning, and implied a relationship with, or endorsement from, MOODLE. Mr Dougiamas was concerned for his business and sent letters to Mr Benner requiring him to stop.

Unfortunately for Mr Dougiamas, an employee accidentally failed to renew Mr Dougiamas’ MOODLE trade mark, and the trade mark lapsed. The same day, Mr Benner successfully applied to register the trade mark “MOODLE” in NZ.

Mr Benner had little in the way of legitimate justification for his actions. When challenged, he updated the websites to refer to dog-breeding (as a “moodle” is a cross between a Maltese and a Miniature Poodle). The Court was not impressed.

Mr Dougiamas sued Mr Benner under the Fair Trading Act (for being misleading), and applied to have the trade mark removed. The Court found in favour of Mr Dougiamas, as Mr Benner was clearly not associated with MOODLE.

The successful result meant that Mr Benner had to stop using the name “moodle”, transfer the offending domain names to Mr Dougiamas, pay some (undefined) compensation to Mr Dougiamas, and see that his trade mark be cancelled as invalid (allowing Mr Dougiamas to reapply for his trade mark).

If you have a registered trade mark, ensure you don’t let your trade marks lapse. Otherwise, this may give someone an opportunity to register a trade mark that should rightfully be yours. However, if you do find someone suggesting an (unauthorised) link with your business or brand, legal action may be able to help you.

 

Rosie Clark is a Partner in law firm Gallaway Cook Allan