IP Considerations For Businesses Operating Online – An Australian Perspective

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[co-author: Brighid Virtue]

Recent changes in consumer behaviour due to the COVID-19 pandemic mean that few businesses can afford to ignore the internet, and the opportunities for efficiencies and scale that it offers.  Operating a business online presents tremendous opportunities for growth by opening up new geographical markets, however it also creates new challenges for businesses in ensuring that their key intellectual property assets, which are made available online, are adequately protected.

So how can businesses manage their intellectual property, and ensure they are not infringing on the intellectual property rights of others, when trading online?

Protecting Trade Marks

A business’ trademarks are some of its most valuable assets.  Distinctive brands allow consumers to distinguish the business’ goods and services from those of its competitors.  Whilst taking a business online can open up many new markets, the increased visibility of a brand often comes with an increased risk of infringement.

Whilst trade mark registration isn’t a legal requirement, a registered trade mark provides the owner with exclusive rights to use the trade mark for certain goods and services. Registered trade marks can also provide the following benefits:

  • They create value for the business. Registered trade marks create real value for businesses.  Registered trade marks can be licensed, assigned or sold and can significantly increase the value of a business on sale.
  • They make dealing with infringement easier. Having a registered trade mark makes it quicker, easier and cheaper to stop someone from using an infringing mark in relation to the same goods and services.
  • They provide a defence to trade mark infringement. Having a registered trade mark is a defence to an allegation that a trade mark infringes third party IP rights.
  • They deter others from using a similar mark. Businesses developing an IP strategy and searching the IP Australia database of registered marks are unlikely to adopt a mark similar to a registered trade mark in relation to similar goods and services.
  • They aid cooperation from third parties. Third parties (such a Google, Facebook and even Australian Customs) are much more likely to cooperate with owners of registered trade marks in relation to trade mark infringement.

For these reasons, trade mark registration is a cost effective solution to protecting the valuable brands upon which a business relies.

Domain Names

Importantly, having a registered trade mark does not automatically reserve all domain names which feature that trade mark. In Australia, domain names are given on a ‘first come, first served’ basis and unfortunately, this has led to a type of intellectual property infringement known as “cybersquatting”.

Cybersquatters seek to register a domain name that is identical with or confusingly similar to an existing trade mark, with a view to generating revenue by confusing the customers of the trade mark owner, or by otherwise attempting to sell the domain name to the trade mark owner at an overly inflated price.

Businesses who fall victim to cybersquatting may seek to bring legal proceedings for trade mark infringement and misleading and deceptive conduct, or to make a complaint pursuant to the au Dispute Resolution Policy (auDRP) or the Uniform Domain-Name Dispute-Resolution Policy (UDRP).

These types of proceedings can be time consuming and costly for your business, and so businesses are now seeking to register all generic top-level domains in respect of their website, as well as making sure that contact details linked to their domain name registration are current, to ensure that registration renewals are not missed.

Copyright Ownership and Infringement

In Australia, there is no system of registration for copyright, and as a general rule, copyright ownership vests in the creator of certain works (including written copy, photographic images and website source code).

Whilst there is an exception regarding copyright works created by employees, simply purchasing copyright works will not be sufficient to transfer ownership of the copyright in those works from the creator.

This means that businesses which pay for copyright works, such as a website design, written content or product imagery, must ensure that the agreement with the creator expressly assigns all copyright in the content to the business.

Further, when creating and updating a website, businesses must consider whether they:

  • are the owner of, by way of creation or assignment; or
  • have the right to use, by way of licence,

all of the copyright materials that will be included in the website, including all copy, music and photographs.

To avoid infringing the intellectual property rights of others, businesses should ensure that they have all appropriate licences and permissions in place.

Online Testimonials

It is important for businesses to be aware of and carefully manage their online reviews and testimonials, in order to prevent consumers from being misled.  In Australia, businesses that:

  • fail to remove online reviews that they know to be fake;
  • offer incentives to customers to write positive reviews; or
  • remove or edit negative reviews for commercial or promotional reasons,

may be misleading consumers and breaching the Competition and Consumer Act.

If businesses intend on promoting the goods or services they offer by publishing reviews or testimonials on their website, they should ensure that:

  • reviews are written by genuine customers – if business owners have encouraged their friends or family to write reviews, they should ensure they have actually experienced the goods or services and disclosed their personal connection with the business; and
  • reviews are accurate and reflect a genuinely held opinion about the product or service.

Whilst trading online allows businesses to access a much broader market, businesses should keep the above in mind when operating online in order to avoid intellectual property infringement, or the potential infringement of the rights of others.

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