Business mentor: Avoid pitfalls of selling overseas

Q. We've built up a reputation in our own brand of soaps in New Zealand and have registered a trademark here to protect our brand. Now we are ready to expand and sell overseas. Presumably if the soaps already have our trademark on them, no one else can copy our brand overseas?

Small Business Sector Specialist Sarah Trotman asked Victoria Watts, intellectual property lawyer at A.J. Park in Auckland.

A. Having a New Zealand trademark is a good start but trademarks are territorial in nature - which means your New Zealand registration will not give you any protection in any other country.

In fact, it is possible that someone has already registered the same trademark in another jurisdiction.

When you want to expand your brand overseas, there are two major areas of concern. You may infringe someone else's rights when you launch in a new country and, even if no one else has got there first, trading without trademark protection can lead to problems.

Risk of infringing third-party rights

A New Zealand trademark registration will protect your brand in New Zealand but not in any other country.

The only way to avoid nasty surprises is to check out key markets early, preferably when you are choosing a new mark.

Even at the start-up stage, if you have an inkling that you may want to sell your products in, say, Australia and the United States, then the best thing to do would be to check if your proposed mark is already used in those territories. If there is a problem, you have the luxury of choosing a different mark early on.

If you have already invested in developing a brand in New Zealand, and filed a trademark application here, you are likely to want to continue using that mark abroad. Before you start exporting, it is wise to check if any third parties are already using or have registered that mark.

If you start using your mark in a country where an identical or similar mark is already registered, then you are likely to infringe the earlier mark.

In serious cases this may lead to an injunction being taken out to prevent you trading under that mark, or a claim for damages being brought against you.

Although it would be annoying to have different brands in different countries, this may be better than being sued for trade mark infringement.

Always have a search carried out in any new country before launching. If such a search reveals no identical or sufficiently similar trade marks in that country, the next step is to file a trade mark application there as soon as possible. By filing an application you effectively prevent third parties from cashing in on your reputation.

The risk of use without registration

Even if no one else has registered the same or a similar trade mark in the countries of interest, selling your product without filing for trade mark protection can lead to problems.

In New Zealand consumer protection laws (such as the Fair Trading Act) allow you to take action against others if their product marketing unfairly takes advantage of the goodwill in your brand, even if your brand is not a registered trade mark.

But when you first launch your brand in another country, you will have little or no goodwill there, meaning that without a trade mark registration you may face significant difficulties in stopping copycat brands.

Some countries adopt a civil law jurisdiction, where the first to register obtains the rights, not the first user.

So trade mark protection is even more important in countries where you are launching for the first time, because without it you have few legal avenues for protecting your brand.

Look before you launch

Launching your product overseas is a significant step for your brand. But if you think ahead, you can minimise the risks. Three basic steps to follow are:

* Identify all the countries you are likely to launch in (either now or in the future).

* Get local searches of the trade mark registers in those countries to make sure no one is already using your brand there.

* Assuming the brand is available, file trade mark applications in those countries immediately.

* Victoria Watts is a trade mark lawyer at A.J. Park. She can be contacted by phone: (09) 353-8209 or email: Victoria.watts@ajpark.com