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Is your business infringing someone else's intellectual property rights?

18 October 2019

Business owners will know the time and effort involved in getting a new business off the ground. Regardless of what goods or services you’re offering, there’s a lot to consider before you can open the doors. There’s also one fundamental consideration which is often overlooked that can halt a new business.  If your business infringes on another person’s intellectual property (such as a trade mark), you run the risk of having to re-brand and start from scratch, or potentially having to appear in court and pay damages to the other party for the infringement.

There have been multiple examples in recent years where the failure to complete a comprehensive search of existing registered and un-registered trade marks has resulted in a cease and desist letter being issued to the offending party. In many cases where a registered or existing third party trade mark is being infringed, the offending party is not able to successfully defend the claim. Unfortunately, this often results in a very expensive and time-consuming learning curve for the party which then has to start over.

How do you prevent this from happening to you?

In much the same way you would complete due diligence before buying a residential property, you need to consider the implication of existing third party intellectual property on your proposed business. Intellectual property rights can be searched for on a variety of registers. These include trade marks, existing business names, domain names, social media, design patents and plant variety rights. There may also be unregistered intellectual property that a third party has proprietary rights to, such as unregistered trade marks. These rights can arise when a particular word, image or colour has been used for a period of time and is recognisable by consumers as a trade mark which distinguishes that third party’s goods and/or services from that of a competitor.

We recommend a thorough search is completed before you open to trade or invest in branding. This initial step, often called a “freedom to operate” search, is an important initial step in assessing whether your proposed business name, brand, or other proposed intellectual property is viable. We can help in this initial phase by examining the proposed business or business activity, and determining whether it’s likely to infringe on existing intellectual property owned by others.

If you have any questions about intellectual property, or would like assistance in completing a freedom to operate search for your proposed or new business, please don’t hesitate to get in touch.

 

Chris Steenstra is a Partner in the Corporate & Commercial team at Norris Ward McKinnon. You can contact Chris Steenstra at chris.steenstra@nwm.co.nz

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