I was set to go into business with a partner but he pulled out at the last minute. Help!

I was set to go into business with a partner but he pulled out at the last minute and has just set up another firm with the same branding to my start-up. I have already started trading but don’t have any trademarks or patents. What can I do about this?


Unfortunately, this situation is more common than you would expect (or hope). If there is a silver lining, it is that you found out what your partner was like before you had invested a couple of years making him successful. But that doesn’t answer your question.


There are two issues at play here – one is what you can do about your now ex-partner taking the IP off by himself.


Unfortunately, if you didn’t have a shareholder/partnership agreement in place, the argument over ownership of the branding you developed is insoluble. The only people who will profit from a fight over it will be the lawyers, and the winner will be the one who can spend money on lawyers for the longest.


So the best thing is to start over, look ahead, and not make the same mistake twice.


As far as dealings with a new business partner is concerned, you need to have some form of agreement in writing between you – even if the only question it addresses is the “exit strategy” – how does someone leave the business, and what are they entitled to take with them.


Turning to dealings with the outside world – the best form of protection you can put in place for your branding is registration of a trademark – although this can usually only be used for your brand name and logo (either together and/or separately, if they are both sufficiently distinctive).


Registration is also available for things such as colours, shapes and sounds, but this is more difficult and costly.


There are other forms of intellectual property protection in Australia – although they don’t often apply for a new business.


For example, although copyright in a “creative work” (which doesn’t actually have to be that creative) comes into existence as soon as the work is created – it does not need to be registered in Australia.


On the other hand, there is a ‘registered designs’ system in Australia – although the problem is that there is no substantive examination system, so you only find out if it’s valid when you try to sue someone on it).


There is also the patent system – which provides a far more robust system, although it is also significantly more expensive, and you need something “innovative” to be able to get protection.


Hopefully this will help someone out there from repeating this mistake.


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