Important IP issues in Your First Year of Business

I recently spoke to a small group of local new businesses and their reaction to some of my tips confirmed my long held suspicions that IP is often overlooked as a key component of a new business.

In your first year of business I’m going to assume that you have registered a company name, got your GST number and dealt with other IRD requirements, registered your domain name, set up a website and had artwork for your letterhead, business cards etc designed.

But what have you done to protect your brand?

Have you undertaken research to confirm that a third party is not already using your brand in another part of New Zealand?

An example I have come across before nicely illustrates the problem that can arise if you don’t undertake a bit of research before settling on your brand. A quick look in the telephone directories shows that there are at least 12 food related businesses trading under the name Zest throughout New Zealand. So while each of those businesses may be able to co-exist while they stick to their current location, it will be very difficult for those business to expand into or promote themselves in other regions without causing confusion.

Now the fact that you have registered a company name will not provide sufficient protection against a third party. This is because the Registrar of Companies is not under any obligation to consider whether your company name is too close to an existing company name. Think of naming your company as being the same as naming your child. You are merely giving your company the legal name by which it will be known. As long as your name is not identical to an existing registered name then it will be allowed.

Returning to the Zest example, I see that the Registrar of Companies has registered companies under the following names: Zest Limited; Zest Group Limited; Zest Orchard Limited; Zest 2008 Limited; Zest Café Limited; Zest Fresh Limited; Zest Gelato Limited; Zest Products Limited; Zest on Peel Limited; Zest Espresso Limited; Zest 200 Limited; Zest Kitchens & Living Limited; Zest Café & Juice Bar Limited; Zest Catering & Café Limited; Zest Kitchen Limited; Zest Organics Limited etc etc etc. There is nothing to indicate a connection between any of these companies. Clearly there is a risk that suppliers and customers may be confused between these various companies.

It will be the same when it comes to domain names as the Domain Name Commissioner can only deny registration of the identical name. Also, with the ever growing list of TLDs the potential for confusion will only increase as there are more and more domains in which the identical name can be registered – think zest.co.nz; zest.org.nz; zest.co; zest.com etc.

If you do not do the necessary research you may find that you are inadvertently trading under a name that is dangerously close to a third party’s name.

The only way to protect your name and brand fully is register it as a trade mark which will give you protection throughout New Zealand and can be relied upon to prevent the use and registration of the identical or confusingly similar name by third parties.