Are you having a conversation with your clients about trade mark protection?


Whilst there were over 2 million actively trading businesses in Australia in 2014, there were only approximately 500,000 registered trade marks in force. When you consider that the majority of businesses would have multiple registrations, it becomes clear that trade mark protection is overlooked by an astonishing number of Australian businesses.

Whether your client is creating a new business venture, growing their current enterprise or looking to protect the empire they have built, trade marking is a vital consideration.

The reality is that your clients may not understand or realise the value in trade marking their business’ brand – just as they may not understand or realise certain tax or structuring implications – so it is important as a business adviser that you initiate this critical conversation.

What is a trade mark and why is it important?

A trade mark is a way of preserving and protecting the uniqueness of a business and its products and/or services. It is the brand or identity allowing a consumer to distinguish a business and its offerings from its competitors.

Below are five key benefits of trade marking, demonstrating why it is important for every business.

1. Trade marks protect from copy-cat competitors

It is easier than ever to commercialise another’s idea. Our increased global connectedness has led to a new breed of online competitors and opportunists who have no reluctance stealing ideas, brand names, domain names and/or identities. If a brand isn’t protected with a registered trade mark, it is vulnerable.

2. Trade marks have longevity

Approximately 20% of trademarks registered throughout the world in 1980 are still in force now – over 30 years later. A trade mark will initially be registered for a 10 year period and can be renewed indefinitely by the owner. This means one can maintain a monopoly in a trade mark for as long as they desire.

3. Trade marks add value

A trade mark is an intangible asset, usually sold with a business at the time of exit. A trade mark will make a business more attractive to potential investors or prospective buyers given that it provides a competitive advantage that cannot be taken away – often resulting in an increased valuation and selling price.

4. Trade marks can support international business growth

In accordance with the Madrid System, an Australian company can register trade marks in up to 88 countries from Australia without needing to complete new applications in each nation separately. This means that an Australian business can easily and cost effectively monopolise its brand over its targeted international markets.

5. Trade mark registration is cost effective

Registering a trade mark is the cheapest form of obtaining registered intellectual property (IP) rights, provided it is properly investigated before being filed. This low upfront cost will save time and money in an infringement battle and secure considerable value to a business.

What is an accountant’s role in regards to trade marking?

Very few advisers today are able to rely on compliance based advice alone. Clients are interested in generating and protecting business value and their vital business assets. Whilst tax advice may be one way in which you help to achieve this, trade marking should be another.

If your clients are committed to building value in their businesses, and if you are vested in aiding this outcome, then you should consider the importance of trade marking. No organisation that has developed a brand – regardless of size – can afford to ignore this necessity.

You can also assist in conversations as to how IP can be formally identified as an asset, what value can be ascribed to it and how to deal with it from a tax perspective. Depending on the circumstances, IP assets can attract capital gains tax and stamp duty implications.

What should you do?

Start the trade marks conversation with your clients. The Redchip Trade Mark Health Check has been developed as a tool to assist you in this process – contact us at protectme@redchip.com.au for your copy.

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