An Expensive Oversight
A small chocolatier based outside of Adelaide, Chocolate @ No. 5, has been forced to redesign its logo after multinational fashion giant Chanel claimed a trademark infringement of its perfume, Chanel No. 5.
Chanel disputed the use of ‘No. 5’ in the chocolatier’s logo when the chocolatier recently applied for a trademark registration. The chocolatier maintains that the number five in the logo refers to the number of its street address and is not used because of any potential connection to Chanel.
Chanel’s lawyers sent the chocolatier a ‘cease and desist’ letter demanding that the chocolatier withdraw its registration, ditch its logo and to rename the business if it was to move from its current address. The chocolatier has since spent thousands of dollars changing the branding of the business in order to avoid a legal battle with the luxury retailer.
Amidst the many challenges entrepreneurs face when starting a business, it is not hard to see how many overlook the need to register their business name and branding as trademarks. However, they can pay a high price for the oversight.
To ensure a new business has the best chance of success, entrepreneurs must be aware of what is involved. As a starting point, they need to consider which business structure best suits their needs, apply for their Australian Business Number, check that their chosen business name is available and register their business name and branding as trademarks, preferably before the business commences trading to ensure interests of the enterprise are covered.
Large companies are often vigorous in protecting their trademarks and intellectual property and Chocolate @ No. 5 is not the only one to pay the price. There have been many instances of small companies being forced to relinquish their logos, business names and web domain names on the basis that they potentially infringe a large company’s trademark rights.
While it takes forethought and planning to address these risks from the beginning, the eventual payout is sweet.