WNA Blog

Wed 1 Mar 2017

Why all Australian Distributors Should Trademark Goods They Distribute.

Finance & Insurance
TM with lock on letters - animated drawing

We’ve come across many distributors who have iron clad distribution agreements with companies to import their product into Australia.

However, what these distributors fail to do is to obtain the trademark for the products they are bringing into the country to sell.

Why is it so important to have trademarks for brands you don’t own?

Let’s use a scenario to illustrate.

ACME Gardening manufacture ride-on lawn mowers in the US and they have an exclusive distribution agreement with True Blue Ltd in Australia to distribute their mowers across Australia and New Zealand.

ACME Gardening have only trademarked their mower brand “ROMO” in the US.

True Blue Ltd start to sell ROMO in Australia and shortly after they are contacted by All Kiwi Garden Gadgets in New Zealand, who also have a ride on mower called “ROMO”, requesting them to stop selling in Australia and New Zealand as they are infringing their trademarks.

All Kiwi Garden Gadgets manufactured mowing products and had registered their trademark in Australia and New Zealand before ACME Gardening ROMO products ever entered the local marketplace.   ACME Gardening registered their trademark for ROMO in the US before All Kiwi Garden Gadgets registered theirs in Australia and New Zealand, but the timing is irrelevant because trademark protection only applies per country.

Now the exclusive distribution agreement that True Blue Ltd has with ACME Gardening is worthless because they cannot sell the ROMO in Australia or New Zealand without having a legal case brought against them for infringement– which they would be liable for, not the manufacturer.

So how could this situation be avoided?

Option 1

When negotiating the distribution agreement, True Blue Ltd could ask ACME Gardening to register the ROMO trademark in Australia and New Zealand before the agreement taking effect. That way the brand would be protected for sales in the desired markets and True Blue Ltd would not have to pay any trademark application and registration fees.

Option 2

When negotiating the distribution agreement, True Blue Ltd could ask ACME Gardening for permission to register the ROMO trademark themselves in Australia and New Zealand before the agreement taking effect. This will ensure that True Blue are not only protected for sales in their chosen market but because they own the trademark ACME Gardening cannot offer distribution to any other company in Australia or New Zealand.

Most of the time overseas manufacturers trademark protect within the country they reside and/or the best-selling countries of their products.

If Australia is not a best-selling country for the manufacturer, then as a distributor of that product you should apply for the trademark protection to ensure no one else can sell the products in your chosen markets.

If you are a distributor of products from overseas, please give us a call if you have any questions regarding your situation. We are more than happy to speak to you as we are specialists in trademarking products for distributors and importers.

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