Your business name can be one of the most valuable parts of your enterprise, with your goodwill and reputation tied to your name.
Most traders take steps to protect their business and brand names through use of trade marks, so that they have exclusive rights to use of that name.
But care must be taken when choosing a name to trade mark, as you may encounter difficulty in registering or protecting a name that simply describes your goods or services. A recent case involving two craft breweries has highlighted the issues that may arise where your chosen name is not distinctive enough to differentiate your product.
The Stone & Wood Case
In 2015, Stone & Wood commenced proceedings against another craft brewer, Elixir, regarding Elixir’s new product ‘Thunder Road Pacific Ale’ (later renamed ‘Thunder Road Pacific’ following letters of demand from Stone & Wood). Stone & Wood claimed that this product was passing off on the reputation of Stone & Wood’s popular Pacific Ale and would mislead consumers into thinking that the brands were associated, or that consumers would purchase Thunder Road Pacific when intending to purchase Stone & Wood Pacific Ale.
The ales in question and how their names arose were discussed in detail throughout the case. Having conducted our own independent research, we can attest to their quality.
The ‘Pacific’ name was originally chosen by Stone & Wood because of their connection with the Pacific Ocean, and was intended to create a calming, cooling emotional response in consumers. This descriptive quality of the name, along with the fact that Elixir did not use similar branding to Stone & Wood or refer to them on its packaging, led the Court to find that Elixir was not passing off on Stone & Wood’s reputation.
Distinctive v Descriptive
The Court found that Elixir did not commit any offence and could continue to market its beer as a Pacific Ale. The name ‘Pacific Ale’ had a descriptive quality, rather than a particular distinctiveness associated with Stone & Wood. Stone & Wood had no significant reputation in the term ‘Pacific Ale’; rather their reputation was in ‘Stone & Wood Pacific Ale’, with more prominence in their labelling given to ‘Stone & Wood’.
Despite two attempts at the bar table, the initial proceedings and an appeal, Stone & Wood was unable to convince the Court of its reputation in Pacific Ale, and was left to collect the tab and stumble home to shake off the subsequent legal hangover.
Choosing a Suitable Trade Mark
This case illustrates the importance of choosing a mark that can distinguish your business from your competitors, rather than one which simply describes the goods or services you provide. IP Australia will usually reject generic descriptions, especially where these are names and terms which other traders will validly need to use. For example, if your business is to make and sell juice, you would be unlikely to be able to trade mark the name ‘Apple’.
An exception to this rule, and an argument put forward by Stone & Wood, is where you have developed a reputation in the market under that name. You must be able show that your proposed mark is well known and associated with your products in the market, to the extent that other traders should not be allowed to use it. As Stone & Wood discovered, this is not always easy to do.
When deciding on a trade mark for your business, take care to choose a mark that is distinctive. Just like planning your night and route home from the bar ahead of time, a bit of forethought before picking and using a name can prevent all manner of issues arising later.
If you want to know the likelihood of successfully having your trade mark protected, or need help to protect your mark from a competitor, contact our Corporate and Commercial Team.