Never before has it been easier to set up and launch a business, or to reach out to potential customers. Evolving technology and globalisation are helping to bring more innovative and unique ideas to life. But at the same time, they are creating an ideal environment for opportunistic businesses or individuals to exploit a business’s competitive advantage for their own benefit.
Geography is no longer a protection
Geographic boundaries are no longer a means of protecting businesses against competitors, both known and unknown. Whereas not so long ago it was possible for a business owner to walk the neighbourhood and check Yellow Pages to identify their competitors, threats are now likely to come from companies of which business owners are not yet aware.
Businesses that manufacture products offshore are particularly vulnerable to infringement and need to understand their international protections. In terms of the law, most industrialised countries are signatories to over-arching agreements that establish the baseline standards for the application of trade marks across geographic borders.
Although Australian laws differ slightly, they are based on a common position which says a business cannot in good faith copy another business’s brand in a way that will cause consumer confusion. The rule of thumb for cross-border operations is that a trade mark offers protection only from within the country in which it is registered.
The obligation is on the owner of a trade mark to use and maintain it. If, however, a business without a registered trade mark can prove it has a reputation in a market (such as Australia), the business can enforce some rights. A good example is the late Princess Diana’s estate, which banned people from using her name in Australia because she had a well established reputation, even without an enforceable trade mark.
The same rules would generally apply in most other countries. If a trade mark is registered in the market where the business’s products are manufactured, the business is protected from competitive use of its brand, but not from copying of its product design. This is a vital difference for businesses seeking to protect product innovation from offshore competitors.
Brand protection in a digital environment
Rupert Murdoch once said that the competitors of the future are likely to be companies which haven’t been invented yet. Technology has lowered the barriers to entry for new businesses and created a flat marketplace without physical borders to slow growth.
This makes for a crowded market in which it is difficult to stand apart from the crowd and connect a great idea with a customer base. That’s not to say, however, that our digital marketplace makes it impossible to protect brands via:
- A notification to commercial operators including app stores, search engines, search advertising and social media sites that a trade mark has been registered will usually be enough to persuade them to remove the potential infringement.
- If a website owner has registered a trade mark in Australia, and is conducting its business in Australia, then an overseas competitor is unable to focus on the same sector in this market. This can be a grey area if the business is selling the same products but isn’t shipping them to Australia.
The bottom line is that it’s irrelevant where a website is built and hosted. It’s about the markets in which that website does business and delivers its products or services.