COVID-19 | The COVID-19 pivot – avoiding the trade mark pitfalls

12 June 2020
Hazel McDwyer, Partner, Sydney

The COVID-19 pandemic has changed several aspects of life, including how many businesses operate. It is no longer unusual to see cafés selling condiments and expanding to home delivery and catering. Restaurants are selling groceries and delivering meal tool kits; everyday household items can be purchased from fast food chains; and live event stage designers are producing home office furniture. The good news is that many such businesses are finding that the pivot has been very successful and are changing their business models on a more permanent basis.

While these pivots are vital in supporting businesses to continue to operate during the pandemic and afterwards, they do raise important trade mark considerations and risks. The speed at which businesses have pivoted, due to these unique circumstances, has meant that due diligence which may ordinarily take place, has been somewhat by-passed.  We are finding that conflicts are on the increase as a result.

So what should businesses be doing to protect their rights and to avoid infringement?

Re-examining your trade marks

If your business has started manufacturing or selling new products or offering new services, as a result of the COVID-19 pandemic, it is important to review your current trade mark protection to ensure that you are adequately covered.

For example, distilleries that started manufacturing and selling hand sanitiser to assist with the high demand for such products may find that their existing registered protection does not extend to those products. Typically a gin or whisky distillery would seek protection in class 33 for such alcoholic beverages, however it is unlikely that hand sanitiser, which falls in class 5, would have been claimed at the time of filing, meaning further protection should now be sought.

Even if your business has expanded within the same area, but created alternative solutions for customers during restricted lockdown, it is a good idea to review your current protection. If you have protection for very specific goods or services within a broad category, you should ensure that your existing rights are broad enough to cover the new goods or services. An example might be if your trade mark has been registered for computer software relating specifically to the field of hospitality. However during the lockdown period your business started successfully developing software for the medical field and hospitals. In this instance, you may not be protected by your existing rights.

At Gadens we recommend protection be sought not only for the goods and services currently provided, but also the goods and services you anticipate will be provided in the foreseeable future. However, nobody could have predicted that manufacturers of plastic bottles might be called upon to produce protective eyewear and face shields for the medical profession, so regular reviews of your protection are important.

Issues and risks arising from the COVID-19 pivot

Whenever a business is looking to expand, the first port of call should be to check that no other party has prior existing rights, either by way of trade mark registration or unregistered rights in the market. As the above examples highlight, the COVID-19 pandemic has seen businesses pivot, extend and alternate to completely different areas from normal.

Without adequate trade mark protection for those alternative areas of trade, you could potentially be infringing someone else’s rights. Comprehensive searches of both the Trade Mark Register and marketplace should be undertaken and protection sought for the additional goods and services provided.

Similarly, it is important to keep an eye on what other businesses are doing to pivot in the current climate to ensure that no one starts infringing your rights. For example, if a bricks and mortar café in your city, with a similar name to yours, starts producing an online publication or app relating to food and nutrition, which is at the core of your business model. Previously the similar name has not been an issue due to the different markets and services, however now there is a clear overlap whereby deception or confusion is likely among your customers.

An increase in online activity by such businesses is also contributing to confusion in the market, which may not have existed previously.

What to do if you receive an infringement notice?

If you receive an infringement notice in connection with your new business activities or operations, it is likely that another business considers that your new activities have caused you to infringe their trade mark rights. If you find yourself in this situation, we recommend that you act promptly and take the following steps:

  • carefully review the infringement notice, including the allegations;
  • review your trade mark coverage and whether it extends to your new activities or operations;
  • if in doubt, seek legal advice as soon as possible, on whether you are in fact infringing another person’s rights; and
  • depending on your legal advice and circumstances, you may elect to cease the activities causing the infringement or respond to the business rebutting the claims. It may be possible to negotiate with the business to achieve a good practical outcome.

What should rightholders be doing?

Rightholders should carefully monitor the market, to ensure that third parties are not infringing their trade mark rights by venturing into new areas of business. Regular monitoring of the Trade Marks Register and internet searches will assist with this.

Ensure that your staff know to notify in-house counsel or senior management, if they become aware of third parties who may be infringing your rights. Again, act quickly if you find that a third party is infringing your rights.

From a commercial perspective, even if you have temporarily ceased or decreased trading, continue to invest in your SEO to ensure that your website still ranks prominently when searching for your business on the internet.

The pivot caused by the COVID-19 pandemic has certainly meant that trade mark coverage should now be actively reviewed by each business. In doing this, it is important to not only review and update your trade mark portfolio but also to assess the risk of infringing any existing rights.

 

For details of all our COVID-19 tips and updates, visit the Gadens COVID-19 Hub.

 


Authored by:

Hazel McDwyer, Partner
Aya Lewih, Lawyer
Teresa Elmey, Trade Mark Attorney

 

This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.

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