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SHE’ll be right – remembering trade marks in business acquisitions

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The importance of careful attention to renewal of your trade marks is highlighted by a recent Trade Marks Office decision.  MST is able to provide business owners with a timely reminder of important dates for newly acquired trade marks, and help them avoid any lengthy and expensive proceedings to re-instate their rights.

The trade mark ‘SHE’ was registered for cosmetics February 1977.  In October 2007, the trade mark was acquired in the sale of the ‘SHE’ cosmetics business.  The assignment of the trade mark was duly recorded with IP Australia, with the Address for Service being the purchasing company’s Brunswick offices.

Trade marks are renewed every 10 years, and in February 2008 the trade mark became due for renewal again.  Prior to the expiry date of a trade mark, IP Australia must give the trade mark owner notice of when their trade mark is due for renewal.  However, in December 2007, IP Australia sent a renewal notice to an incorrect address for the purchasing company.  As the purchasing company did not receive any notification that the renewal of the ‘SHE’ trade mark was due, the purchasing company did not renew the trade mark within the required timeframe and the trade mark expired.  This would normally mean the trade mark is removed from the Official Trade Marks Register (‘Official Register’).

In February 2009 – twelve months after the renewal date – the General Manager of the purchasing company became aware the ‘SHE’ trade mark had expired and sought to have the trade mark renewed.  IP Australia advised the purchasing company that as the trade mark had not been renewed in time, ‘SHE’ would be removed from the Official Register.  The purchasing company disputed this decision and the matter was subject to a hearing before a delegate of the Registrar of Trade Marks.  While the delegate ultimately found that the ‘SHE’ trade mark should remain on the Official Register and be renewed, the purchasing company had to unexpectedly invest considerable time, effort and expense in pursuing the matter to reach the required outcome.  This inconvenience may have been avoided if a timely review of the acquired trade mark portfolio had been undertaken.

The decision highlights the need for purchasing companies to review and keep track of when the trade marks assigned in a business acquisition are due for renewal.  This will help limit the number of distractions away from implementing any business goals for the newly purchased business, and ensure the ongoing protection of the acquired trade mark rights.

MST is able to report to clients on due diligence results for trade marks being acquired in any business purchase, as well as provide purchasing companies with a timely reminder of important dates for newly acquired trade marks.

Contact our Intellectual Property Team for further information.

Author: Noelene Treloar