Many small businesses have a limited understanding of marketing and advertising law – which is perfectly understandable – it is complicated, intricate and simply mind-boggling. However, one area of law that ALL businesses should understand is Intellectual Property, particularly trademarking. Many businesses think it’s an unnecessary (and large) expense (no doubt it is, but it should be regarded as a business investment, like purchasing a new piece of equipment), especially if they are a small – with intentions only to remain a small operator. Let me give you an example of why it is so important.

Unfortunate Real-life Scenario:

You open a small retail outlet in your local town. Things go well for you – your product range is well received, your reputation is strong, and customers sing your praises at every possible opportunity. You get some advice from your accountant or business advisor who says you could open another outlet, so you do. Now you decide it might be time for a website. A few months later, you find there is a store with the same name as yours, with a very similar web address, who have recently opened across the other side of the country. Customers begin to visit the website by accident and are ringing to check that you are still open, telling you they think you have closed down and moved on. You are forced to put signs on your doors, advertisments in the papers and change your messages on hold recording to remind people you are still open. Your new customer sales really suffer as a result. Loyal customers make sure you are able to pay the bills, but only just. You don’t make a profit for months – equal to an approximate $50,000 loss, plus the additional expenses in advertising that you had not closed down.

Alternate Universe Scenario:

As soon as you opened the store, taking the advice of your logo designers, you approached a trademark attorney who applied and secured ownership over both your business name (word mark) and logo (design mark), investing about $3,000. You then proceed to build a successful and profitable business before opening another outlet and creating a website. At the same time every week, you check up on your google rankings. You then discover a similar Australian business with the same business name and similar web address. None of their materials display the ® or TM symbols. You approach your trusty trademark attorney to write them a nice letter, warning the business to abstain from passing off (simply, copying you) otherwise legal action will be taken. Within a week the business has turned its website off-line, and suspended trading. All the while, your customers have not been exposed to this alternate business, they keep visiting your website, ringing and visiting your stores. Profits only grow.

See, the mistake the business made in the Unfortunate Real-life Scenario was to assume that with the support of their loyal customers, a similar business in another area couldn’t possibly affect their sales. When you move to more than one outlet, when you rely on web, phone and other enquiries for new business, and when you, as the owner, aren’t able to make personal contact with ALL of your customers, is when Trademarking is essential. Before that, it’s just really important. The scenarios above prove this fact. A $3,000 dollar investment in the beginning would have saved this business a loss of $50,000 or more later on.