Thinking of going international? Beware of unscrupulous ‘copycat’ brands looking to leverage your hard work and reputation offshore. It’s happened to Aussie businesses before and we should all heed the warning, write James Lawrence and Wei Xu.
The Australian food and beverage industry has an excellent international reputation. It’s clean, it’s safe, it’s green and backed by a comprehensive regulatory framework.
But success comes with challenges. It attracts unscrupulous operators who attempt to benefit from the reputability of Australian products by stealing intellectual property. Your name. Your reputation. Your brand.
Nowadays, a growing number of Australian business owners are aware of the importance of protecting their brand names and will choose to register their brands before exposing their products in an overseas market.
A trademark is used to differentiate a business from its competitors. The owner of a registered trademark has the exclusive right to use the trademark in relation to the goods and / or services for which the trademark was registered.
But trademarks only get you so far. They don’t, for example, automatically entitle you to an online domain name. Domain names are managed under a different regulatory framework. To build an online business, a domain name has to be registered with a domain name registrar.
The dual framework for trademarks and domain names can lead to problems. Imagine, for example, that someone overseas registers a domain name containing words identical or similar to your brand name. Will the consumer be able to tell the difference?
Domain names are licensed by various registrars on a ‘first in, first served’ basis. The good news is that if someone is clearly out to rip-off your product - known as ‘bad faith’ at law – you are entitled to file a complaint.
This is what happened late last year with an Australian beverage business known as Nutrition Darling. This company had created a range of smoothie booster products known as Smoothie Bombs.
With the products’ healthy and sustainable features, Smoothie Bombs products quickly gained popularity in the Australian food and beverage market. Subsequently, Nutrition Darling expanded its business to several overseas markets.
Before officially launching into the US market, Nutrition Darling learned of a pre-existing site “smoothiebombs.com”. This site was used by a competitor of Smoothie Bombs based in the US, to redirect prospective customers to its own website where its own products called “Blender Bombs” were sold. Nutrition Darling firstly chose to communicate with the owner of Blender Bombs but unfortunately those attempts to resolve the matter were unsuccessful.
Nutrition Darling then filed a complaint under the Uniform Domain Name Dispute Resolution Policy (UDRP). The UDRP is a relatively efficient and economical avenue for the resolution for a domain name dispute. It took only approximately 2 months to reach an outcome. It was a win for Nutrition Darling, who secured the rights to the competitor domain name.
A registered trademark is not the only prerequisite for securing an identical or similar domain name through UDRP proceedings. A complainant also needs to establish that the other party was acting in bad faith.
While it is pleasing that Nutrition Darling won the case, the cost and ordeal of the litigation could have been avoided by taking a few simple preventative steps. In particular, businesses should consider registering a number of relevant domains so that these cannot be occupied by cyber-squatters.
In the Smoothie Bombs case, Nutrition Darling only registered and used the domain name “thesmoothiebombs.com” while the American competitor cyber-squatted the “smoothiebombs.com” domain name by deleting “the” from it.
In summary, the registration, use and maintenance of trademarks and domain names are particularly crucial for business owners in the Australian food and beverage industry, given the popularity of Australian food and beverage products around the world. Early filing of trademarks and domains in relevant jurisdictions is critical to placing your business in the best possible position to protect your brand.
James Lawrence and Wei Xu are IP experts from national law firm Mills Oakley. Last year, Mills Oakley advised Nutrition Darling on their cyber-squatting case, leading to the successful outcome described above.