Today BRR Media speaks with Melinda Upton, she’s a Partner and heads up the Trade Marks and Branding practice for DLA Piper Australia, welcome to BRR Media Melinda.

Thank you very much.

Melinda bricks and mortar retailers have been doing it really tough of late, and we’ve seen a lot of high profile insolvencies such as Red Group Retail, who owns the Angus & Robertson’s and Borders Bookstores brand, but whilst the business model might be in ruins the brand itself can still hold substantial value provided the intellectual property in that brand has been properly protected.

That’s right and I think the Australian retail market is putting considerable pressure on the profitability of some brands.  As we see consumers increasingly purchase from international websites, so David Jones and Myers are probably good examples again of those big brand owners not immune to these pressures.  So for brand owners I think the first step to protecting the value of a brand is really to obtain the registrations for its trade mark, and that will maintain some exclusivity of the right to use the brand for goods or services.  And there are many companies instinctively that understand the value of building and protecting brands; Apple, Kraft, Costco, Gazel are really good examples, and locally we’ve had brands like Waterford, Wedgewood, and Canterbury Clothing, where the profitable part of their business is the IP and when faced with a challenging market the IP assets have really saved the day.

So Melinda if I’m looking to rescue or buy an underperforming brand what should I look for from an IP perspective?

I think underperforming brands they can really be appealing from an investment option for some businesses.  The purchaser should really ensure that the trade mark rights it requires are secure prior to completing any transactions.  And for example you can easily check on any of the relevant registers whether appropriate fees have been paid in terms of registration fees.  But acquirers should also investigate whether the trade marks in question have been used, that’s very important in terms of its vulnerability to removal, and the loss of sort of a registration can actually materially affect the value of a business.  So potential purchasers should also check whether there are any existing licences for the brand, and if there are any similar marks within the market place.  And notably I think too is even a brand that has been dormant for some time may have residual value, which could be tapped by revival of a brand and one really good example of that in the financial services industry in the last few years is Westpac relaunch of the Bank of Melbourne brand for its St George business in Victoria.

And Melinda you mentioned licences before, what about the licensees out there, what IP protections do they need to have in place?

Well a licensee, it’s a good question and it’s something that people don’t turn their minds too that often, and a licensee’s first concern may be that damage to the brand will mean they wish to terminate the licence.  So protect their position in negotiating a licence agreement, licensees should seek terms which allow the licensee to terminate, if the licensor becomes insolvent for example.  However if the situation arises where a licensee is confident there will be limited damage to the image of a brand, the licensee will want to ensure it retains its rights to continue using the brand under licence.  And given the speed of insolvency actions, and we do a lot with our insolvency partners here, purchasers will not always have time to conduct full due diligence.  So in this scenario it is possible that the licenced trade marks may be sold or assigned to a third party who is not aware of the licensee’s rights, so it’s good to the due diligence there.

Well just finally in your experience what would you say is the most forgotten aspect of IP that businesses tend to overlook?

I think in this climate it’s really the opportunity to leverage off those IP assets to raise capital for growth.  There is a really a good opportunity to create ongoing revenue streams from licensing the IP in other jurisdictions, and we’re seeing a lot of traditional Australian based businesses looking at regional opportunities there.  And also with competitors they may have IP that may wish to licence to their competitors to use in other jurisdictions they’re not active in.  So a solid IP strategy I think does provide piece of mind to invest in some shareholders, encouraging further investment and growth as a result.  And I think that finally the key to ensuring your brand and IP survival is really to get back to the basics, so companies should be focussing on consolidating their existing IP assets, be vigilant from the enforcement perspective in protecting those IP assets, and ensure that there are robust licencing arrangements in place, and really take stock of the ownership.

Yeah well some great insights for IP in what’s I’m sure will continue to be a fairly challenging environment for retail and some of the brands out there, but thanks again for your time today Melinda.

Thanks very much David, it was pleasure.

That was Melinda Upton, a Partner heading up the Trade Marks and Branding practice for DLA Piper Australia.  Listeners if you have any further questions for Melinda about this interview please send a message using the panel that’s on your screen or you can otherwise email through to law@brrmedia.com and we’ll forward your query.