False Trademark Infringement Notice for My Business

trademark-infringement

After recently reading a story about a company being sued for incorrect information displaying in Google ‘Open Graph’, it reminded me about an experience I had a couple of years ago, and I thought I would share with you now.

I worked for a long time and very hard to achieve the top ranking positions for a business for sale website we owned. It took over 6 years to finally hit the #1 position for our biggest term! It was a long process, slowly dominating most terms within our niche, and then finally we hit the number 1 position for our main term.

Boom! Our traffic doubled over night. It was a great achievement!

Trademark Infringement Notice

Within 1 week of achieving our new rankings, we were slapped with a ‘Trademark Infringement’ notice from a law firm in North Sydney. We were scratching our heads wondering what the hell was going on!

As it turns out, the site which had previously been ranking in the number 1 position for our main term (they were now #2) was so pissed off, that filed a law suit claiming that I was infringing on their trademark ‘Australian Business for Sale’.

First of all, how on earth was a business allowed to trademark such a descriptive, generic and non-branded term? I was baffled!

False Accusations

Which brings me to my next point. Not once on our entire site did we include the search term ‘Australian Business for Sale’. Not in my content, not in my titles, not in my meta tags, absolutely nowhere! I was now even more confused and started thinking that maybe they sent this to the wrong business.

After calling the law firm directly, they let me know in no uncertain terms that this was no mistake. So, I responded directly via email prior to seeking legal advice.

Our Response

Below I have detailed my initial response to their threatening email, which highlights some of their demands:

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Hi,

After completing a website audit on our site, we could not find the term ‘Australian Business for Sale’. Please provide evidence where our site uses this term, and please provide the evidence as to where we are claiming to be ‘Australian Business for Sale’?

FYI – Are you familiar with these other business for sale sites in Australia:

australianbusinessforsale,com
australianbusinessforsale,net
australianbusinesssales,com.au
bsale,com.au
business.domain.com.au
realcommercial.com.au,
etc, etc, the list goes on.

All of these sites above use your trademarked name in their content, and some of these sites actually have your ‘trademark’ name in their domain names! Are you proceeding with legal action against all websites who use this very generic, descriptive term? If yes, (there would be thousands) then good luck with that. However, our site does not fall into that category.

Below in bold are your client’s demands, my response follows:

A)Cease and desist from using the name ‘Australian business for sale’ and any other similar name – Please provide evidence where we use this term on our site?

B) Remove the name ‘Australian business for sale’ from your website and remove any existing backlinks as well as company material containing this name – This term does not exist on our site or company material. Please provide evidence.

C) Undertake not to use the name ‘Australian business for sale’ in the future – We have never and will never brand our company using this generic term. That would defeat the purpose of ‘company branding’. Please provide the client with the following link to educate them about ‘company branding’ and how it works – http://en.wikipedia.org/wiki/Corporate_branding

D) Make an announcement on your website that neither direct, nor indirect relations exist between your company and our clients – I will not make announcement on my website due to the fact that there is no relation between our companies. Please provide evidence of this allegation.

1) The removal of any existing backlinks and all infringing content containing the words ‘Australian business for sale’, as well as your notification in writing that you have done so – As previously mentioned website owners do not have control over external links.

2) Names, addresses and other contact details of the distributor – Not Applicable

3) Pay a licensing fee in the amount of $2000 – No

4) Pay our clients cost of assertion of it’s rights – No

Below in bold are your client’s demands, my response follows:

‘Our client is concerned that your attempt to pass off your business as theirs is one which has already resulted in a loss to theirbusiness’

Please provide examples where we are ‘passing off’ as your clients business. Evidence is required.

‘There is undoubtedly confusion in the marketplace between our clients company and yours’

In who’s opinion? Did you take a poll? If so, please provide evidence and all contact information of poll participants.

‘Our client’s trademark and the term used by you are strikingly and deceptively similar’

We do not use this term on our site. Please provide evidence of our deception.

‘Your company generates the impression in the relevant public that it is a representative of our clients’

Please provide evidence how we generates this impression.

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I can go on further, but I think you get the point. We have in no way infringed on your trademark name of ‘Australian Business for Sale’, according to the Australian Law.

As you can see by my reply, they really didn’t have a leg to stand on. It’s as if they did not even look at my site at all to see if I was in fact infringing on their trademark. I thought this would have been the first point of call for any law firm acting on behalf of a client. Confirming these accusations should have been the law firms first point of call prior to making contact with me.

After sending the above email to their lawyer, they responded with the following:

“Dear Sir,

We do not want to discuss anything with you in response to your remarks stated below. Our client is the owner of a registered word trademark. Therefore we do not need to argue in relation to the distinctiveness of our clients’ mark. We simply ask you to declare, whether you comply with our requests or whether you decline to do so. If the latter is the case, then we are instructed to apply for an injunction on behalf of our client without any further notice to you.

Kind regards”

So after politely informing them that we in fact did not include this term on our site, they simply ignored this rather valuable piece of information and instructed me to either comply with their requests, or proceed to fight it in court.

Time to Hire lawyer

After hiring a top notch IP Lawyers firm in Melbourne (Actuate IP), we discovered that as long as I wasn’t claiming to describe our business as ‘Australian Business for Sale’ (eg ‘Hi, welcome to Australian Business for Sale), and as long as I was only using it as a description (eg. ‘Are you looking for an Australian Business for Sale’), then we were breaking no laws and were not infringing on their trademark term. That being said, we didn’t have this term on our entire site.

So not only was their accusations incorrect, but if used as a description we can use this trademarked term.

We Didn’t Back Down

Our Lawyers proceeded to draft up our response and informed them that we would be fighting this full steam ahead!

Within 10 days of receiving our detailed response, they decided to not proceed with legal action, which was a very smart move on their behalf. They had no grounds to proceed and made themselves look rather foolish.

The Cost

Unfortunately, this exercise cost us thousands of dollars in legal fees. I could have taken them to court to recoup my expenses, but decided to let it go. I seriously didn’t have the time.

In hindsight I wished I did end up taking them to court to make an example of them for what they did. They were very unprofessional and unethical with their actions.

Always hire a solicitor to handle your legal affairs. It will save you time and money in the long run.

Business Brokers Still Achieving Great Results!

Graph

Recently a very popular business for sale website owned by the REA Group called ‘Real Businesses’ closed its doors.

The announcement said:

“As a subscriber to our ‘Real Businesses’ website, I want to let you know first hand of our intention to close the service on the 3rd March 2014.

During the past 12 months we have reviewed all aspects of our wider business to align ourselves to our long-term strategic goals and REA Group purpose; to help people to live their property dreams by making the entire process simple, efficient and stress free.

We carefully considered the site experience for our ‘business for sale’ consumers and customers and whether it was in line with REA Group purpose. In this context, we felt that the capital investment required to take the‘’Real Businesses” website into the future (including the development of a strong mobile proposition) could not be justified.

We are informing you of this decision 3 months in advance to allow you the time to transition to other marketing solutions for your business.” Referenced at www.rea-group.com,

This ruffled a lot of feather within the industry and in particular, business brokers in Sydney, as they were the major percentage of Real Businesses client base.

What Will Brokers Do Now?

As I predicted, this was just a storm in a tea cup. Yes, they did leave their customers in the lurch, forcing them to advertise on other websites, but moving to a new site isn’t that difficult.

All brokers were required to do was to advertise on another highly ranked website, or simply advertise on the website which replaced ‘Real Businesses’ in the search engines (when they were removed from Google, all other sites simply moved up one position).

Sure, this would require setting up a new account on a new site, and re-uploading all of your listings, but this can be done relatively quick. And most sites these days cater for bulk uploading via XML files.

What Are Brokers Saying

At Business Sold, we received a lot of feedback from different business broker agencies around Australia as a lot of them were already advertising on our site. And the general feedback was that business brokers nation wide were not that concerned and were actually seeing it as a way to get out of their contracts.

The general consensus was that ‘Real Businesses’ were over priced and under servicing their customer base. With huge overheads, they were forced to charge ridiculous monthly prices that did not meet most agencies budgets. Hence their downfall.

As it turns out, ‘Real Businesses’ closing their doors was a blessing in disguise and according the brokers, and they are not missed!

Understanding Business Loans

loan

Starting a business typically involves the need for looking into acquiring business loans from major branches, eg www.commbank.com.au. But you’ll need to see which loan will best suits your businesses situation.

Lenders want to know the exact reason you are outsourcing this finance, largely because they need to evaluate the likelihood of getting their money back and the time frame for doing it.

Also, different lenders specialize in different things. Let’s consider the basic different types of business loans:

  • Start-up Financing: This type of loan is used to get the business off the ground, clearly. The money will be used to by such things as supplies, inventory, tools, and so on.
  • Business Property Financing: This one is clear-cut. You need a place for your business, and the business lender gives you a business mortgage.
  • Business Growth Financing: This is a business loan got by an already established business that is growing and needs more capital to fund expansion to meet the needs of more customers. You will need to show a track record of steady growth in order to impress a business growth lender.
  • Inventory Financing: These are loans that you take out to buy more inventory. Businesses that are doing so well that they have the “good problem” of finding it hard to keep enough product in the warehouse to meet customer needs and demands can avail themselves of these loans.
  • Motor Vehicle Financing: You might operate a business that has an immediate need for more vehicles for transportation, field agents to get around, etc. Through these loans you can usually find both leasing and purchasing options on vehicles.
  • Tools and Equipment Financing: This usually means renting or leasing options on industrial tools or equipment for the small business owner.
  • Trade Financing: This is a specialized type of lending that involves a national government’s relationship with centralized banks. It aids in the facilitation of imports and exports international and domestic.

Having a Good Credit Rating

Now, of course, there are certain things you need to do in order to be able to get business loans. One of those things is have decent credit.

If your credit has some black marks against it, you’ll either be turned down or have to pay high interest rates.

You can find loan brokers who can help you find lenders that specialize in poor credit loans, and this might involve your getting a co-signer who has better credit than you, but you will definitely need to be prepared to pay high interest rates and you had better never miss a timely payment at all.

But, if you pay back the principal and interest on time, your credit rating will rise and then you’ll find it easier to get other business loans.

Have a Business Plan

You’ll also need to show a lender your detailed business plan and the details of your plans for using their money. Business brokers can help you with this if you need help. But the most important rule of all is: don’t take out a business loan unless you really need one.

If possible, use your own money to finance your business. When that’s not feasible, turn to the business loan.

Negotiate Your Interest Rate

Make sure you shop around for the best deal when choosing a small business loan. Otherwise it could cost you big dollars.

Different banks will offer different rates. The banks will also be able to customize you a special deal which will suit your needs. They are also willing to negotiate to get your business.

Private Business Sales Continue to Surge

sell-biz-privately
The most recent business for sale survey conducted by Biz Listings, indicates that a large percentage of small business owners in Australia would prefer to sell their businesses privately before signing up with the more traditional method of using a business broker.

The research also identified that selling businesses privately has been a growing trend since 2002.

Business Owners Saving Thousands

Saving as much as 7% to 15% of the businesses sale price on agent fees and commissions, not to mention the thousands of dollars in up front advertising fees. Its no wonder selling privately is a booming trend!

Another factor that is boosting small business sales is that 20% of businesses have plans to seek assistance via a business loan to expand their businesses, making them more attractive to buyers. This results in a faster sale while fetching a higher price.

The recent boost in business loan approvals is a great indication for future trends going forward, which gives the industry as a whole great expectations for continued growth in 2014.

Quick ‘Selling a Business’ Tips

tips

Keeping a shortlist of tips and questions to ask prior, during and post sale always make the selling process less stressful.

Below is are a few useful points to consider:

  • Put yourself in the mind of the buyer;
  • Always seek legal advice before signing on the dotted line;
  • Always get your accountant to go over the profit and loss statements to help determine a value;
  • It doesn’t hurt to get an independent valuation;
  • Have your book work in order ready to hand over to serious buyers
  • Learn the ‘selling a business process’

Time Your Sale

timing

The biggest mistake most small business owners fall victim to is not being prepared. From the moment you started your business (or took it over), you should be preparing your exit.

Whether you like it or not, the reality is at some point you will most like want to sell, and being prepared is crucial.

Most owners tend to put their business on the market when they are forced to, like when sales are down and business is tanking. The trick is to exit when your business is flying high!

Coming Up With an Asking Price

sale-price

More often than not, business owners feel that their business is worth more than it actually is. They have put so much hard work, time and funding into the business, they can sometimes feel it owes them that much.

The reality is your business owes you nothing. It is only worth what the profit and loss statements project, along with current market trends.

Too often businesses are sitting on the market and not being sold because they are generating basically zero interest because the asking price is unrealistic.

Getting an independent valuation will see your business drive more enquiries resulting in a faster sale.

Keep Your Sale Anonymous

hiding

Broadcasting to the world might be the way you think things need to go when selling a business, but in actual fact this can do more harm than good.

Once the news breaks, it can be very disruptive to your existing employees, suppliers, vendors, landlords and most importantly your customers.

You do not want to rock the boat! Advertise your business discreetly by not naming your company directly in the advertisement and getting potential buyers to sign a ‘confidentiality’ agreement.

Just imagine if your competitors found out you were selling. They would relish in telling their customers, their suppliers and to anyone who will listen that you are going out of business, which couldn’t be further from the truth, but spreading a rumor like this can be damaging for your business and rewarding for their business.