Using A Competitor’s Brand – Is It Legal?

If you’ve wondered whether it’s legal to use a competitor’s brand to promote your own business, this article is a must read.

Whilst we do not suggest that if a competitor has not registered a trade mark then it can be used by anyone  as the competitor will likely have some rights at common law irrespective of whether they have registered a trade mark,  for the purposes of this article, we will assume that the brand in question is a registered trade mark When an individual, group of people, business organisation or any other legal entity like a charity or an association, is successful in their application to have a trade mark registered – they then own the exclusive rights to use, license, trade, sell or assign the trade mark.

Trade mark registration establishes that no other person has rights to the same or similar mark for the same or similar goods and/or services.

So does that preclude a competitor from ever using someone else’s brand or is there some leeway, such as in comparative advertising?

When Is It Ok to Use a Competitor’s Brand?

Before we investigate some circumstances where it may be possible to use another entity’s registered trade mark, it’s important to understand exactly what trade mark ‘ownership’ means.

The Rights of a Trade Mark Owner

If you (or your legal entity) own a trade mark, no-one else can use that trade mark (or a deceptively similar mark) commercially for the same goods or services (unless a solid defence exists). It’s yours to use exclusively to help your brand stand out from the competition and to help consumers distinguish your business goods/services from other similar products or services. 

A trade mark is a valuable intellectual property asset and you can use it to build your brand’s reputation and strengthen customer loyalty and goodwill, and therefore increase the value of this tradeable asset.

Trade marks are also registered territorially, so another entity is not allowed to use your trade mark commercially within the country or territory of your registration. For example, if you register a trade mark in Australia, it is protected in all states and territories for an initial period of 10 years.  Thereafter, the trade mark can be renewed for further 10-yearly periods on payment of a fee.

I’ve Seen Examples of Different Brands Being Compared in an Advertisement.  How Is This Possible?

At face value, it doesn’t seem possible that one brand can use another competitive brand to advance its own public visibility, for example in comparative advertising.

In the eyes of the law however, use of a competitive trade mark in advertising is allowed provided that certain standards are met. Often the comparison being made is to do with price, quality or similar.

The advertisement must be truthful, and any comparative claims must be able to be substantiated.  Comparative statements must also not be false, misleading, deceptive, disparaging or confusing to the public.  The advertising must be carefully worded so that it is not ambiguous and does not create any impression of an affiliation, endorsement or sponsorship between the trade marks that are being compared.

However, comparative advertising is a risky strategy and it’s an area where considerable sums of money have been spent on legal battles. Even if your use of a competitor’s brand is lawful, a competitor may not like it and will look for ways to prevent the continued use of its brand by others so  if you are considering using your competitor’s brand in your advertising, it is recommended you seek specialist advice from an experienced lawyer or a trade marks attorney before embarking on what could potentially be a very costly campaign.

The trade marks attorneys at MMW Trademark Services is well-qualified to provide advice and help on any issue related to the legalities of comparative advertising and trade mark infringement.

Using Another Entity’s Trade Mark for Compatibility Purposes

There is another circumstance when you can use another person’s trade mark in your advertising – and that is when it is for compatibility purposes.

If your product is an accessory to another product (or the other way around), it is legal to advertise that compatibility.  For example, if your company makes cases specifically for Apple® phones and tablets, you could reference their brand alongside your own provided that there is no inference whatsoever of endorsement or affiliation between the two brands. Larger entities, such as the Apple® trade mark owners will have clear information at their websites as to when and how their trade marks can be used.

Using a competitor’s registered trade mark in SEO

This article on using a competitor’s registered trade mark in SEO offers some useful insights into this challenging subject. 

MMW Trademark Services’ advice is that you should always be aware of the risks of trade mark infringement when planning your marketing activities whether online (eg SEO, digital advertising etc) or in traditional media.

The person using the trade mark will be the liable party in the event trade mark infringement is found, so it is crucial for business owners to be hyper vigilant when it comes to comparative ads or using a competitor’s trade mark online.

Key takeaways

Yes, comparative advertising is legal and there are instances where it is acceptable to use a competitor’s brand alongside your own. 

However, it can be a very risky strategy and although it is possible within the bounds of the law, it is not easy to keep within those parameters.  A company considering a comparative advertising campaign should ensure that all representations made in the advert have been carefully considered and it’s always a good idea to get specialist legal advice upfront.