Why Letting Your Overseas Distributor Register Your Trade Mark Can Cause Problems

When your business starts to grow overseas, it is common to work with local partners, such as distributors, franchisees, or agents. Sometimes, these partners offer to register your trade mark in their country “for you” to make things easier. While this might sound helpful, it can actually create serious risks for your business and your brand.

In most countries, the person or company listed as the trade mark owner on the register has the legal right to use, control, and enforce that trade mark. If your overseas distributor or franchisee registers your trade mark under their name, they become the official owner of the mark in that country — not you. This means they could:

• Stop you from using your own trade mark in that country unless you get their permission.
• Control how you use the trade mark, for example, by allowing you to use it only when you work together with them.
• Block you from registering the trade mark yourself in that country later, even though you own it in your home country.

In some cases, trying to fix this situation can become a long, expensive, and difficult legal battle. Even if you can show that you are the real owner of the brand in your home country, many countries only recognise the person or company that first registered the trade mark locally. Cancelling or opposing a third-party registration is often not easy, and there is no guarantee you will win.

What can you do to protect your brand?

If you plan to expand your business to a new country, it is important to take action before problems arise:

1. Register your trade marks yourself in any country where you plan to operate, sell products, or give licences. This gives you legal protection before you enter the market.
2. Include clear terms in your agreements with local partners. Your contracts should clearly say that you are the owner of the trade marks and that the partner has no right to register or own the trade marks.
3. Keep monitoring the situation. Even with good contracts, check the local trade mark registers regularly to make sure no one has applied to register your brand without your permission.

If you find out that your distributor or franchisee has already filed an application for your trade mark, you should speak to a trade mark lawyer as soon as possible.

At Briffa, we help businesses protect their brands around the world. If you are planning to expand internationally or need advice on how to protect your brand, please drop us an email or give us a call and we will be happy to arrange a free consultation with one of our specialist IP lawyers.