Skip to 0 minutes and 9 secondsAs we have seen, the first step in protecting trademarks is to make sure they are registered wherever the franchisor wishes to trade.

Skip to 0 minutes and 23 secondsGiven the power of the internet, to expose a brand to all corners of the earth, franchisors should not skimp when it comes to protecting trademarks. Be aware that trademarks are registered in different classes depending on what products or services they represent. The franchisor needs to think carefully about which classes its products or services belong to. Franchisors also need to be aware of the possibility of their brand being registered in a social networking environment, such as via a Twitter account. Since branding is such a powerful identifier, franchisors need to actively manage their brands to make sure their reputation is not trashed in cyberspace.

Skip to 1 minute and 10 secondsAll franchise agreements must now address misuse of intellectual property. Franchisors also needs to make sure the master franchisees, and franchisees employees, sign confidentiality agreements. Through these agreements, the employees promise not to disclose trade secrets to anyone. The trade secrets might be secret recipes, methods of operation, or a whole host of other secret ways of running a business. Taking infringers to court is one way for a franchisor to protect their intellectual property, but it can be expensive. It's easier to prosecute for breach of a registered trademark than to sue for passing off where the mark has not been registered.

Protection of intellectual property

The protection of intellectual property is an issue that should be of primary concern for a franchisor when expanding overseas. Important considerations centre on trademarks, copyright, confidentiality agreements, registration and litigation.

Trademarks: As we have seen, the first step in protecting trademarks is to make sure they are registered wherever the franchisor wishes to trade. Franchisors need to register their trademark in both the home and target country. Without doing so, they may expose themselves to copy-cats stealing their brand’s identity and thus seriously impacting on the value of the system. Brands can be registered through national filing systems as well as international systems such as the Benelux system and the Madrid protocol.

Copyright: International copyright protection is governed by the World Intellectual Property Copyright Treaty (1996), Berne Convention for the Protection of Literary and Artistic Works (1886), and the Universal Copyright Convention (1955).

Confidentially agreements: Confidentiality agreements are legal contracts between the franchisee and franchisor that describe confidential material, knowledge, and information that the parties wish to share with one another for certain purposes. The signatories agree not to further disclose this confidential information.

Registration: Some jurisdictions require franchisors to register their systems and trademarks prior to the recruitment of franchisees. Registration may be required for the intellectual property (especially the franchise trade marks), the franchise agreement and/or disclosure document.

Litigation: If the franchisor’s intellectual property is tarnished by the franchisee the franchisor may be able to claim damages. This depends on whether the intellectual property ownership right is registered, on the terms set of the franchise agreement, the nature of the breach, the extent of the damage, and the relevant law.

Given the power of the internet to expose a brand to all corners of the earth, franchisors should not skimp, and should be proactive in protecting their trademarks. Franchisors also need to be aware of the possibility of their brand being registered in a social networking environment – such as via a twitter account. As branding is such a powerful identifier, franchisors need to actively manage their brands to make sure their reputation is not damaged anywhere.

When there is an online breach of a franchisors intellectual property rights, the following steps provide a useful guide to resolving online breaches:

a. Who owns the offending website? You might be able to discover the owner through one of the following sites – * Whois.com * Networksolutions.com * Godaddy.com.au

Or check on the site itself – eg in its privacy policy

b. Issue a cease and desist letter via a lawyer

c. Litigation – this should be a last resort.

In this video Dr Jenny Buchan goes into more detail about the protection of intellectual property and the use of confidentiality agreements.

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International Franchise Law: the World is Yours

UNSW Sydney

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