A small swimwear company based in SydneyÕs Avalon, Absolut Beach, found out the hard way what it means to breech a trademark. A recent decision handed down by the US District Court of Virginia found in favour of Absolut Vodka producer Vin & Spirit and against the beachy Aussie player. Absolut Beach was, by virtue of its international Internet sales, found to have breached Absolut VodkaÕs trademarks in the UK, US, Greece, Sweden and Canada. As widely reported in the press, Absolut Beach now faces damages of more than $900,000 (not including $200,000 in legal fees) and must hand over its Australian-registered trademark and domain names. Unfortunately, this has also meant the closing of the Australian businessÕ doors. Trademark issues and protection are now more relevant to marketers than ever before. Taking a risk with your brand could cost you your business or, at the very least, cost hundreds of thousands of dollars in legal fees, damages, recall and destruction of stock and/or repackaging. While Absolut Beach, which had registered its trademark and domain names in Australia, was challenged on its failure to register its mark in countries in which it was intending to trade, there are others who have been challenged for blatantly copying their competition. Both Aldi and Sydneywide were pulled up for attempting to trade on their competitorsÕ brand image. Judgement in the recent Twisties case came down to an Òaural similarityÓ, with the Federal Court deciding that Twisties and AldiÕs Cheesy Twists sounded so alike that it was likely to deceive or confuse consumers. A judge also ruled that SydneywideÕs Live Wire energy drink had such similar can size, colour and theming as Red Bull, that it was deemed to be Òpassing offÓ, a breach of the Trade Practices Act. Aside from costly legal battles, a trademark is the ÒfaceÓ of your company or product. Trademarks are part of what drives demand for your product over those of the competition. For example, most of us would recognise a Coke can without the appearance of the word ÒCokeÓ, because of the distinct red can, white lettering and Òdynamic ribbonÓ. However, in the UK Coke was not swift enough to protect its red can and the market is saturated with look-alikes and differentiation between brands is much more difficult. Coke has registered just about everything it could, from its name and dynamic ribbon, to the shape of its bottles. Recently, Coke was able to prevent a confectionery wholesaler in Australia from distributing candy in a similar shape to the Coke bottle. LetÕs face it Ñ brand names are the engines of profit for todayÕs market. The marketing world spends billions each year on advertising campaigns and promotions to set its products apart from those of the competition. Are you really willing to spend any of your A&P budget to help a competitor eat part of your market share? Every marketer dreams of having their brand or product become so well known that people adopt it in their everyday language. However, while sales might soar for a time, Òme toosÓ are quick to jump on the category bandwagon, and although category sales keep rising, your market share drops, the mark loses its exclusivity and your brand loses it unique claim. The 90s Rollerblade craze is a great example. The term became so generic that other companies and the public referred to all in-line skates as ÒrollerbladesÓ and Rollerblade had a hard time enforcing its trademark. This story is not uncommon Ñ there are many stories of trademarks becoming part of daily discourse. When you have a headache, take an aspirin. Escalators take shoppers from one level to another, and, even though it is in fact a registered mark of Johnson & Johnson, if you cut your finger, you reach for a band-aid. In the past, J&J has had to run advertising in the US to protect its band-aid brand, and in 1993 successfully prevented a similarly named product, band-it, from entering the market. However, there are certain measures you can take to prevent your trademark from being hijacked. l Never use your trademark as a verb as has happened with rollerblading and hoovering. l DonÕt use it as a common noun as in the case of yo-yos and cellophane. l Try not to use a common symbol, a descriptive term, a common surname or geographic name (although it is possible to achieve ownership and registration of these in some instances Ñ particularly if the mark has become overwhelmingly well-known through use and promotion, such as that of McDonaldÕs). Confusion over the various types of intellectual property rights is easy. Copyright protects literary, artistic and musical creations, whereas a patent protects technological inventions, and design rights protect the appearance of mass produced goods. All of these give protection for limited periods. Trademarks distinguish the goods or services of one trader from those of others. Registration lasts 10 years and your rights can be renewed indefinitely as long as you continue to use the mark. Three years of non-use may lead to the expungement of the mark. Next time youÕre involved in the development of a new product, donÕt risk a possible blockbuster of a brand without first calculating how much of a revenue loss you could face in the event of a lengthy legal case against you. Be sure to check against the seven common traps (see box). Annette Freeman is principal at patent & trademark attorneys, Spruson & Ferguson. Seven common traps l Not doing your homework. l Relying on your own searches, although these can be very helpful in highlighting trademarks already taken and what may be difficult to use. l Getting set on one look, name or tagline Ñ come up with several before seeking advice. That way counsel can come back once or twice rather than several times to ask for next choices. l Building your brand identity on the back of your competition. l Not seeking legal advice Ñ this is particularly important if you want to trade internationally or over the Net. l Taking a risk and thinking that youÕre too small or obscure to be noticed. Many companies have people specifically employed to look for unsanctioned use of their registered marks. l Begin design and packaging production prior to trademark advice. Think of the product manager who approved, printed, inserted and distributed a packaging insert for the launch of a newly named loyalty program only to find that the name was very similar to one in the country of launch. The packaging had to be pulled, new designs worked up and distributed, advertising collateral changed and letters of notice sent to existing members advising them of the new name. All because the product managerÕs request to counsel was done as an afterthought. Standout TM battles of 2001 l Absolut Vodka vs Absolut Beach l Twisties vs Cheese Twists l Red Bull vs Live Wire l Yahoo Serious vs Yahoo! Inc l McCormick Inc vs Mary McCormick What can be registered as a trademark? Company names McDonaldÕs, Kodak, Reebok, David Jones Mascots Ronald McDonald, SmithÕs Gobbledok Products Twisties, Vegemite, Aeroplane Jelly Logos Chesty Bonds muscle man, Qantas flying kangaroo Brand icons CokeÕs dynamic ribbon Packaging TobleroneÕs triangular box Shapes Toblerone chocolate, pharmaceutical tablet shapes Taglines McDonaldÕs ÒMac your dayÓ, ArnottÕs ÒThere is no substitute for qualityÓ Letters HMV, ABC Numbers 4711, 747 Colours The colour pink for insulation batts Smells The strong smell of beer applied to flights for darts Sounds The MGM lionÕs roar
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