Technology is an increasingly important aspect of the financial marketplace. With the rapid introduction of platforms such as crowdfunding, peer-to-peer lending and new crypto-currencies, it is important for fin-tech users and providers to protect their intellectual property (IP) from infringement and ensure they are not at risk of infringing the IP of another.
What is fin-tech?
The term ‘fin-tech’ covers a broad range of technologies that facilitate faster, simpler, and more cost effective delivery of traditional financial services. For instance, crowdfunding allows small businesses and startups to solicit minor investments from a wider pool of investors, without the drawbacks associated with conventional equity funding. Peer-to-peer lending enables individuals to lend and borrow money without intermediaries such as banks and similar institutions.
Trademarks for fin-tech providers
As with all emerging areas of business, providers of well-known fin-tech services are at risk of imitation, which can result in a loss of market share and a diluted or diminished reputation. Businesses that protect their brands with registered trademarks mitigate the risk of copycats. In this highly competitive market, brand recognition can make or break a business.
Businesses that provide fin-tech services are at risk of infringing the trademarks of other such providers. For instance, one European peer-to-peer facilitator attempted to register a trademark for their brand, only to be challenged by a similarly branded business. This resulted in an expensive negotiation that lasted for almost a year and a half. By registering a trademark as early as possible, fin-tech facilitators can avoid lengthy and expensive court proceedings and the potential loss of brand ownership.
There are also various commercial advantages associated with trademark protection. Trademark holders are able to licence the use of their trademark to people in different regions, without diminishing their ownership of the brand. Furthermore, for pioneers of fin-tech that wish to sell their businesses, a company whose branding is protected by registered trademarks will be more attractive to prospective purchasers.
Trademarks for fin-tech users
Those who fund their businesses through fin-tech platforms are open to unique and significant risks of IP infringement. For instance, a business financing production through a crowdfunding or peer-to-peer platform won’t necessarily reveal the details of their branding to a wider audience before they are commercially active. These businesses can quickly gain traction and recognition through social media, which is likely to attract imitators. Those fin-tech users who apply to register trademarks prior to engaging with these new platforms insulate themselves from this risk.
Holders of registered or pending trademarks in Australia are able to apply for an international trademark under the Madrid Protocol, which will provide protection in 97 other nations.
Depending on the goods that a fin-tech funded business is providing, it may also be advisable to obtain a registered patent or design in respect of the products. This can supplement trademark protection by defending the physical aspects of a product against imitators.