by Stephen Chow and Anaïs Julien ONE IP INTERNATIONAL PTY LTD
The best things in life are free. This is a common phrase that everyone has heard of for sure. Does this apply for your intellectual property too?
You may not have noticed it, but your business certainly owns intangible assets already, that may be worth a fortune and come to you completely free and automatic. But first things first. What is this IP?
In essence, intellectual property (or IP) is a body of law that recognises certain creations of the human mind as intangible properties. Being a form of property, they may be owned by persons or companies, and may be sold, assigned or licensed, as the owner deems appropriate. In the commercial world, intellectual property rights allow businesses to protect their valuable assets, many of which they have invested significant money and time into.
Intellectual property, however, is nothing more than an umbrella term that covers various individual rights such as copyright, designs, patents and trade marks. The natures of various IP rights differ significantly from one another. As such, it is imperative for businesses to protect their creations under the appropriate intellectual property right.
In this article, we take a closer look at two forms of IP rights that are often used to protect the brand a business. Copyright and trade marks are often used individually or in combination to protect the distinctive features of a business, including logo, brand name and slogans. These features allow businesses to distinguish themselves from their competitors, and build up a reputation of their own.
Whilst these two forms of IP rights operate independently of each other at large, they also overlap sometimes. As such, it is imperative to understand the extent of protection each of the IP rights offer, and how conflicts between copyright and trade marks are resolved.
What is a trade mark?
In Australia, a trade mark is defined as “a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person”. A trade mark may consist of many elements, including letter(s), word(s), shape(s), colour(s), sound(s) or scent(s). However, it must be distinctive. As a badge of origin, a trade mark must be capable of distinguishing one’s goods or services from others.
Trade marks are a particularly strong form of protection. It confers on the holder the exclusive right to use, sell and/or license the trade mark. This means the holder can prevent any authorised use by its competitors in Australia. Trade marks also have an indefinite duration, for as long as the trade mark is being used in commerce.
In tandem with its high levels of protection, however, trade mark rights do not arise automatically. It is only when a trade mark is registered that the exclusive rights mentioned above kick in. Even then, trade mark rights are territorial. A registered trade mark in Australia cannot be enforced Overseas.
What is a copyright?
Copyright is a protection given to authors of original literary, dramatic, musical, and artistic works, makers of sound recordings, cinematograph films, and broadcasts, and publishers of published editions. It gives the creators economic and moral rights. Under economic rights the creator has the exclusive rights to copy or reproduce the material, to make an adaptation of it, to publish it, to perform it in public, to show, broadcast or display the work, as well as to license these rights to a third party. In accordance with moral rights, the creator of a work is entitled to be acknowledged as such and to object to derogatory treatment of his or her work.
In essence, copyright protects the skill and labour involved in a particular expression of ideas in a physical form, but not the ideas themselves. Moreover, the creation needs to be substantial. As such, single words, slogans or titles are generally not protected under copyright. Nevertheless, no particular level of literary or artistic merit is required for copyright to subsist in a work.
Given the prolific nature of copyrighted materials, copyright arises automatically following creation. You do not need to register your work to take an infringement action against a third party who copied your work.
What are the differences?
Since copyright and trade marks have different criteria, some intellectual property are protected under copyright and not trade marks, and vice versa. For example, names, titles, slogans, trade names, and short phrases are ordinarily not capable of protection under copyright, but may be protected in the form of a trade mark.
The table below summarises the key differences between copyright and trade mark.
Overlaps and Conflicts – Copyright or Trade Mark, who wins?
Whilst copyright and trade marks operate in different fields at large, they sometimes overlap. This is particularly the case with logos. Under copyright, a logo can be protected as an original artistic work. On the other hand, a logo may also be registered as a trade mark, serving as a badge of origin for a company’s goods and services.
In cases of conflict between copyright and a trade mark right, the dispute is resolved in favour of the earlier right. Unless the work does not qualify for copyright for lack of originality, copyright would ordinarily be the right that is prior in time, since copyright exists at the very moment the work was created.
The case law is clear that where another person applies for a trade mark that consists of the entirety or a substantial part of a copyrighted work, this would constitute “publishing” the copyrighted work. Being an exclusive right of the copyright owner, this would constitute copyright infringement unless the application was authorised by the copyright owner. Here, the infringement on copyright would render the trade mark application “contrary of law” under s 42 of the Trade Marks Act 1995, which means that the application must be rejected.[1]
The seniority of copyright remains unaffected even if the copyrighted work was used as a trade mark by someone else first. In KARO STEP, the High Court of Justice in England held that the trade mark holder must demonstrate that he or she has “an absolute right to use it”. This would be defeated if the trade mark infringes on the copyright of another work.[2].
As a result, trade mark applicants should ensure that their trade mark does not infringe on another person’s copyright, as the copyright owner is ultimately able to oppose a trade mark and may succeed. Therefore the trade mark applicant should ensure, that the trade mark does not contain a substantial part of the work(s) that have inspired the trade mark.
Moreover, if you as a potential trade mark applicant are commissioning a graphic designer to design your trade mark, you should obtain an assignment of the copyright in that logo to secure your ownership of that copyright. That could be done at the time of commissioning your graphic designer to design the logo for you or subsequently.
IF COPYRIGHT IS FREE, WHY REGISTER A TRADE MARK?
The above makes clear that, as the author of a logo, you would generally be granted copyright to protect others from using it as a trade mark. Even then, however, it is recommended that you register your logo as a trade mark. The first thing to note is that your work might not attract copyright for lack of originality. As discussed above, the tests of validity for copyright and trade mark are completely different. It may be the case that your logo, though it does not qualify for copyright, is nevertheless acceptable as a trade mark. Brand names usually do not qualify for copyright protection and only very distinctive and clever slogans may do.
Since copyright does not require registration, it may be that you would only come to discover that your work does not attract copyright when an infringement action is brought before the court. So, you do not know right from the start, if you are covered or not. This uncertainty can be harmful.
Even if your logo is protected under copyright, there remain significant advantages if the logo is registered as a trade mark. The first advantage is that it is much easier to enforce a trade mark right, which is registered, compared with copyright, which is unregistered. You certificate of registration, in most cases, is conclusive proof that you are the trade mark holder. On the other hand, proving that you are the author of a logo could be a difficult process.
The second advantage is, as mentioned above, that a trade mark right can last indefinitely. On the other hand, copyright expires 70 years after the death of the author. After that, others would be free to do all the acts reserved for the copyright owner during the period of copyright protection.
Finally, the rights conferred on trade mark holders are much stronger than those on copyright owners. Unlike trade marks, copyright infringement requires derivation. This means that the infringer must have done an act based on the copyrighted work. Hence, if it was pure coincidence that another person comes up with a logo similar to yours, then there would no infringement.
To protect the badge of origin for your goods and services trade mark registration is always the recommended IP right to obtain through registration in all countries, where your goods and services are offered (your markets). Copyright, however is, may be a powerful instrument in a trade mark opposition proceeding to prevent any third party from monopolising a logo (composite mark) or song (sound mark) or clever slogan (word mark), when the creative work, leading to these types of marks were accomplished by you.
[1] Advantage Rent-a-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683
[2] KARO STEP Trade Mark [1977] RPC 255
