What is a Trade Mark?

20 June, 2022 | Bret Gower

A trade mark is a unique identifier of a business or its goods or services – people often think of it as a brand or a logo but it can also include words, colours, shapes, even sounds and smells or any combination of these. The point of a trade mark is to help people identify the source of a business and its good or services — and to distinguish those goods and services from other business’ goods and services.

The way you identify whether you prefer Vegemite® to Marmite® or Coke® to Pepsi® is the result of being able to correctly identify each product through its trade marked name.

A trade mark is essential for establishing and protecting your brand. It helps your business gain and retain its customers by clearly identifying your products or services. It can prevent customers from buying inferior products that might be confused with yours.

It is a valuable business asset and the benefit of establishing a trusted trade mark is that customers may well be willing to pay more for the product or service that bears that mark. This gives the business owner a competitive edge over its competitors and can be a business owner’s most valuable asset when it comes to sell the business.

Once a trade mark is registered, it gives you exclusive right to use the trade mark in New Zealand together with the ® symbol to show others that you have registered that trade mark. It will deter others from trying to imitate your brand, or to benefit from its success. It is registered on the publicly searchable IPONZ trade mark database. You can sue for infringement if a business or person uses the same or a similar trade mark and the registration process ensures that you won’t be infringing on anybody else’s registered trade mark.

A registered trade mark provides a monopoly under the Trade Marks Act 2002. By registering your trade mark you can prevent a competitor using a confusingly similar trade mark. Trade mark registration provides a form of over-arching protection that cannot prevent a competitor from registering a confusingly similar company name or internet domain name, but does allow you to prevent them from trading under that company name or using the domain name. It can even allow you toforce the transfer of the conflicting domain name to you in certain circumstances.

Importantly, a registered trade mark adds value to your business in the form of goodwill that can substantially increase over time as the trade mark becomes established and recognised in the market. As your registered and protected property you can sell or assign the trade mark or license it to another party.

The Trade Marks Act 2002 sets out the requirements for registration in New Zealand and applications have to comply with the requirements of that Act. There are a number of restrictions to registration of trade marks including matters such as whether it is a descriptive term, for example using the word “sweet” for ice cream, if it is a geological reference such as “Bluff” for oysters, and where it suggests endorsement by a particular person or organisation.

A trade mark must be distinctive and cannot be descriptive of the characteristic of the goods or services that you are referring to. For example the word “apple” can’t be registered as a trade mark for fruit but obviously it has been registered in terms of computers or phones. As a rule of thumb, if the trade mark is too obvious it will fail to be sufficiently distinctive.

A trade mark is likely to form part of the intellectual property owned by your business. To protect that intellectual property, you first need to identify the extent of the intellectual property that exists in your business, and then assess the value and potential risk of not protecting it against the cost of protection and how those factors affect your specific business.

The relatively modest cost of registering a trade mark is well worth it for the ongoing protection of the investment in your brand and your business.

To discuss the intellectual property in your business and whether it’s the right time to protect it, or to discuss registering your trade mark call trade mark and intellectual property lawyer Bret Gower on 09 837 6893 or email bret.gower@smithpartners.co.nz.