A recent story to hit the media in New Zealand shows the importance of a clearance search before using a trade mark and also the importance of registering a trade mark – even if only used locally.
According to the story as reported, the Brown Sugar Café opened in Taihape in or around 1993. The owners of this café also have a second café with the same name in Otaki. Taihape (population c 1,800) and Otaki (population c 4,500) are towns in the lower part of the North Island, just over 3 hours and one hour drive north of Wellington respectively.
In 2001, the owners of the Brown Sugar Café filed an application to register BROWN SUGAR CAFÉ as a trade mark. Whilst the trade mark may only have been used locally, the trade mark registration of course gave protection against use of the same or similar trade mark throughout the whole of New Zealand.
The House of Brown Sugar opened in Nelson in June 2010. The owner of that café put “brown sugar” in the name because she ”put brown sugar in everything“. Nelson is a popular holiday destination at the top of the South Island (population c 43,000).
In September 2011 the owner of The House of Brown Sugar received a complaint from Brown Sugar Café about use of BROWN SUGAR in the name of her café. Some time thereafter, Brown Sugar Café commenced proceedings, presumably for trade mark infringement, passing off and/or breach of the Fair Trading Act.
The House of Brown Sugar initially appear to have fought back, but recent reports indicate that they have decided to move on and select a new, and hopefully this time available, name – STRAWBERRY BAKEHOUSE.
I feel greatly for our friends in Nelson and I hope that they do not mind if I use their story to provide some lessons for others. There are three key lessons to be learnt from this saga:
1. Check that the name you wish to use is not already used or registered by a third party
The name of a business can be one of the most valuable assets of that business. However, far too often people do not check to see if their proposed name is available for use before they invest in that name. As not every business registers its name as a trade mark it is important to check not only the Intellectual Property Office database for the same and similar names, but other sources such as the Companies Office and telephone directories. While many business people are happy to undertake such research themselves, I of course would highly recommend that the services of a patent attorney are engaged to undertake the necessary clearance searches for you.
2. Register your trade mark – once you know it is clear for use
Even if you only plan to trade in one location give consideration to registering your name as a trade mark. Once registered, you then have a monopoly right to use, and to prevent others from using, that and confusingly similar names any where inNew Zealand.
The filing of an application gives the public notice of your rights and ownership of that trade mark and should act as a deterrent to others planning to use a similar name.
Further, you never know how things might turn out and you may decide to trade in other locations, or to licence other to use the name in other centres.
3. Beware the backlash if you come on too heavy
One of the key aspects of registering a trade mark is to enforce your rights. However, inNew Zealandwe tend to support the “underdog” and hate to see bullies winning.
The comments following the news reports about the Brown Sugar case suggest a fair amount of backlash against the Taihape café owners. It has been said that there is no such thing as bad press, but in this case I tend to disagree.
