Bega owns the dress: do you own your unregistered trade marks?.

8 May 2020 | Reading time: 2 minutes

Last year, we published this blog post regarding Kraft and Bega’s dispute over the ownership of an unregistered trade mark, being the iconic peanut butter trade dress shown below:

The trade dress in question included the:

  • yellow lid;
  • yellow label; and
  • blue or red device on the label, signalling smooth or crunchy peanut butter (the author prefers smooth).

Bega won that case and, recently, Kraft lost its appeal in the Full Court of the Federal Court of Australia. This is likely to have significant consequences on how businesses protect and commercialise their valuable brand assets.

Key takeaways.

  • Failing to register your trade marks exposes your business to considerable risk.
  • An unregistered trade mark cannot be assigned without assigning the goodwill in the underlying business that the trade mark has been used for (ie it may only be assigned as part of a sale of business).
  • This may have significant consequences:
    • Licensors of unregistered trade marks may be affected because the goodwill in what is being licensed will be owned by the licensee and not the licensor, despite contractual terms to the contrary.
    • Parties purchasing IP assets may, unknowingly, fail to acquire unregistered trade marks (such as packaging trade dress) from the seller.
    • Businesses seeking to protect their unregistered trade marks by ‘assigning’ ownership to an IP or holding company that is part of the same corporate group will likely find that the assignment is invalid.
    • Purchasers and/or assignees of previously unregistered trade marks may find their applications, and subsequent registrations, vulnerable to rejection or revocation on the basis that the purchaser/assignee was not the owner of the trade mark when the application was filed.
  • Businesses should now take a look at their unregistered trade mark portfolio and apply to register those marks as soon as possible. This includes unregistered brand and product names, logos, packaging layouts or trade dress and tag-lines.
  • Once registered, the trade mark can be assigned without assigning the goodwill of the underlying business using the trade mark. This provides owners with opportunities to protect and commercialise these valuable assets.

Contact Bespoke’s Intellectual Property lawyers for a chat about what this means for your business, and current brand asset protection measures, and what steps you should take in light of this landmark decision.