Don’t put a mask on your trade marks: how to protect your brand during the COVID-19 pandemic

By James Neil and Sarah Martine
14 May 2020
Businesses have leapt at the challenge to innovate and adapt to the COVID-19 pandemic, but they should not lose sight of their brands and the importance of their trade mark registrations.

While trade marks might not seem like a "business critical" issue at the moment, it is important for businesses to keep an eye on their trade marks and continue to protect their brands during the COVID-19 pandemic. Failure to do so may mean that they are not able to take full advantage of their brands during the contractionary phase of the economic downturn and, possibly worse, may have difficulties in using their brands to restore their business to its full potential once the storm passes. This article raises a few things for businesses to consider to ensure that they emerge from the pandemic with their brands intact.

Consider your existing trade mark coverage

The pandemic has forced many businesses to adapt and change the way in which they operate. This includes branching out into new areas, such as producing different products or providing different services. In recent weeks we have seen winemakers producing hand sanitisers to help satisfy demand and also to help them stay afloat while their wineries are closed. We have also seen many businesses move to completely online platforms while their physical retail stores are closed.

While these changes have enabled many businesses to continue trading during these unprecedented times, it raises some important issues in terms of brand protection. Trade mark registrations essentially only protect your trade marks in respect of the goods and/or services claimed in the relevant registration. So, for example, businesses such as gyms and fitness centres may have existing trade mark registrations for the operation of physical fitness centres, but may not claim services relating to the provision of online fitness classes and workouts. Similarly, businesses such as this may not have adequate protection for the additional services they are now providing to their members, such as online meditation sessions or nutrition advice.

Businesses which operate restaurants are another example. They may have existing registrations for "restaurant services", but may not have protection for takeaway or delivered food services. It is not possible to add additional goods and services to existing trade mark registrations. If businesses wish to protect their trade mark in respect of further goods and/or services, they will need to file a new trade mark application. Similarly, if a business has adopted a completely new trade mark (a new logo or brand name), or has established a new business division since the onset of the pandemic with a different name (eg. to sell that business' goods / services via a new online store) it is important that new trade mark applications are filed to cover those new brands.

Trade mark registrations allow owners to enforce their rights from the date on which the application was filed (the priority date). Priority dates will be key when businesses emerge from this pandemic. Failing to file an application for new goods and/or services, or a new trade mark, will mean businesses will be forced to rely on their common law unregistered trade mark rights (passing off and misleading and deceptive conduct). It is far more difficult to enforce your rights this way and often involves higher costs, because it is normally necessary to adduce evidence of your business' reputation in the relevant brand. While (understandably) many businesses around Australia are doing it tough, applying to register a new trade mark may be more cost-effective than having to bring an action against an infringer down the track where all you have to rely on are your unregistered trade mark rights.

Businesses may wish to take advantage of some down-time and consider their existing trade mark portfolio to identify any gaps in their protection. This may include considering any further jurisdictions where protection should be sought, particularly in "first in best dressed" jurisdictions such as China. It is also important for businesses to consider registering domain names for any new brands. Again, failure to do so may result in issues and costs down the track as cyber squatters continue to seize domain names with the sole intention of selling them for profit (albeit there are also things you can do in those circumstances).

Keep using your registered trade marks

A large number of businesses around Australia have been temporarily closed, and may continue to be for some time. Businesses that have existing trade mark registrations should continue, where possible, to use their trade marks for the claimed goods and services. In many circumstances, if a registered trade mark has not been used for a period of three continuous years, the registration can be at risk of being removed from the register for non-use. If this happens, the trade mark owner would lose all of their rights to the trade mark in respect of the registered goods and/or services.

While it is not anticipated that the pandemic will keep businesses closed for three years, some businesses may not have been using their trade marks before the pandemic hit, or may have been forced to cease producing or selling certain products with the intention of 'bringing back' such brands in a few years. It may be possible for businesses to argue that their trade mark registration should not be removed because they were effectively prohibited from using their trade mark during the pandemic. However, depending on how long they had failed to use their trade mark for before the pandemic hit, that is by no means guaranteed. As a result, it is important to keep this in mind and continue (where possible) to use your registered trade marks. Use of a trade mark in Australia is generally satisfied by a single good faith use of your trade mark during the relevant period (eg. on product packaging, invoices or advertising materials). So, even if a business is not currently trading at significant volume, it will often still be possible to satisfy this requirement.

Think twice about filing applications for "COVID-19" related trade marks

As with any major world event, the COVID-19 pandemic has been seen by some as an opportunity to cash in and take advantage of new business opportunities (this article is obviously not such an example). In March 2020, trade mark offices around the world saw an influx of new trade mark applications for COVID-19 related trade marks. For example, the Australian Trade Marks Office has received several applications for "COVID-19" in a broad range of classes covering things such as stationary, apparel, board games and entertainment services, as well as a couple of applications for "Coronavirus" relating to software and education services.

In order for a trade mark to be registrable, it must be capable of distinguishing the applicant's goods / services from the goods / services of others. We doubt that "COVID-19" and "Coronavirus" are capable of distinguishing an applicant's goods and services in order to satisfy this test. Further, a trade mark application must be rejected if it contains or consists of "scandalous" matter. While this is a question of fact, it is possible that COVID-19 related trade marks may be considered to fall within that category. The Trade Marks Office has recently confirmed its intention to reject recent "COVID-19" trade mark applications. While the grounds of rejection are not yet publicly known, it seems likely that the one or more of the points raised above have been raised.

Conclusion: innovation, adaptation – and then registration

Businesses have leapt at the challenge to innovate and adapt to the COVID-19 pandemic, but they should not lose sight of their brands and the importance of their trade mark registrations. Businesses should consider the points raised in this article and approach this in the same way as the recent panic buying of toilet paper. Trade mark registrations might not seem like an essential asset right now, but failure to adequately protect your trade marks may leave you with no protection when you need it most!

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.