What you need to know about the ownership of IP when building out e-commerce trade, devices and systems

By Ben Ryan, Lawyer at Hillhouse Legal Partners
| 4 min. read

Key takeaways

  • As dependence on e-commerce increases during the COVID pandemic, so too does the risk of passing-off or piracy and it is imperative that ownership of your business’ IP is protected.
  • Passing-off is one of the most avoidable issues in business if you take the right steps to secure your intellectual property as soon as possible.

Businesses have understandably been relying more heavily on e-commerce to keep their businesses trading during the COVID pandemic. As dependence on e-commerce increases, so too does the risk of passing-off or piracy.

E-commerce most simply is the use of information and communication technology to conduct your business activity. Commonly, this is done through the internet and individual websites for businesses. While this is not a new practice, as more and more businesses make the leap to increasingly or even primarily providing their goods and services electronically, it is imperative that ownership of your business’ IP is protected. Bricks and Mortar stores such as Harvey Norman as opposed to entirely online like Amazon or Kogan are a prime example of such a shift.

If you are selling goods and/or services through e-commerce, you should have a website that incorporates a governance model which includes:

  1. trademarked logo, tagline and business name (this can be done in one mark with IP Australia);
  2. detailed Privacy Statement that complies with Privacy Principles both in Australia and internationally if you trade overseas;
  3. Terms of Conditions and Use policy for those using the website; and
  4. Disclaimers and risk mitigation policies to protect your business and its interests.

Should your business not be relying upon the above four basics, then you may be unnecessarily exposing yourself to:

  1. breach of the Privacy Act and Privacy Principles;
  2. unnecessary claim by customers due to unclear or uncertain purchase terms;
  3. significant issues with quality control, refunds for goods or services and returns for goods;
  4. breach of the Australian Consumer Law; and
  5. Passing-off by competitors, particularly if your material is not trademarked.

Most people will have either seen or been subject to a passing-off or piracy through e-commerce. Whether it be purchasing Ray-Bans online which turned out to be ‘fake’ or buying that iPhone 9 online which actually comprised of an iPhone 4 and 5 taped together. However, passing-off is becoming increasingly common for businesses during COVID where competitors are able to enter the market under the same business name and/or logo, divert customers away and cause significant financial detriment to your business.

Passing-off is one of the most avoidable issues in business if you take the right steps to secure your intellectual property as soon as possible. We see all too commonly where businesses have been operating under a name for several years, only to have another entity come in, register that name and attempt to pass themselves off as you or your business with the sole objective of cashing in on your hard work and stealing your financial success. While there are avenues to regain control of your IP, these steps can take months and incur significant costs. Accordingly, clients should be proactive rather than reactive when dealing with their IP protection. Particularly as businesses becomes increasingly reliant on e-commerce in trade.

If you would like to discuss how you can best protect your business and its intellectual property, please contact us for more information. We are here to help protect you and your business.

The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.

 

The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.