Tiny Mark that's growing in value

21 April 2010

Article - HERALD SUN - BUSINESS OWNER, by Claire Heaney, Thursday, June 14, 2007 - Page 76

Retailer Toys R Us has been forced to pay compensation to a Melbourne bike distributor after it sold unauthorised Shogun bikes in breach of the company's trade mark.

Springvale based distributor The Bicycle Corporation Pty Ltd is an exclusive distributor of Shogun branded bikes in Australia.

But before Christmas last year the company trading as BikeCorp, was alarmed to see a catalogue from the retailer advertising cut price "shogun" bikes.

The catalogue, circulated from November 30 to December 11 last year, advertised 50 cm boys "Shogun" High Test BMX bikes for $79.99.

BikeCorp owner Geoff Haydon sought advice from South Yarra law firm Meerkin & Apel

Toys R Us had brought the 510 bikes from a US company, Kent International Inc.

It was eventually settled with both gave written undertakings that they would not sell bikes or do anything else that would infringe BikeCorp's trade mark. BikeCorp also received a substantial compensation payment for the bikes sold as part of the settlement reached.

Toys R Us did not return a call from Business Owner yesterday.

"It shows how important it is for any business, no matter what size, to protect their intellectual property rights." he said

"Companies should consider the registering of trade marks, designs and other forms of intellectual property as a form of insurance that protects vital business assets."

"We strongly encourage clients to spend a relatively small amount of money at the front end, prior to a dispute, to register their rights rather than potentially spending tens of thousands of dollars in heavily contested litigation at the back end of the dispute."

Meerkin & Apel partner and trade marks attorney Felicity Cara-Carson said the case illustrated the importance of investigating the market, obtaining legal advice and carrying out appropriate searches in relation to existing intellectual property rights, before you import and sell products within Australia.

Bike punctures ring-in

A call from one of its customers alerted bike wholesaler BikeCorp that it was a victim of a breach of its trademark relating to the Shogun brand of bikes.

BikeCorp managing director Geoff Haydon said a retailer selling its bikes turned up with a sale catalogue from Toys R Us which included Shogun BMX bikes.

"We were a bit surprised ... we thought that our name was reasonably well known and that a company that size would check it out before selling the bikes," Mr Haydon said.

"We would have expected a smaller company to be a bit sloppy."

Mr Haydon said BikeCorp made enquiries and was put in contact with Meerkin & Apel. Mr Haydon had worked for Malvern Star for many years before it was taken over and, with two other people, started The Bike Corporation in the mid 1980's.

Mr Haydon said that before BikeCorp became the Australian distributor of Shogun it was only available at one retail outlet.

Under BikeCorp, its standing had grown and BikeCorp now wholesaled Shogun bikes to 70 independent bike retailers throughout Australia.

"You can't find Shogun in every second shop - it is available at probably only one in 20 shops, so it is an exclusive brand," he said.

Negotiations with Toys R Us included talk of what was to become of the Shogun BMX bikes that had not been sold, and how BikeCorp would be compensated.

Mr Haydon said they had talked about sending the unsold bikes to East Timor for charity purposes but it turned out they were spread across 16 stores and the cost of delivery would have been prohibitive.

In the end Toys R Us had to destroy them - and make a statutory declaration.

Mr Haydon said accessories and parts were a growing part of the business.

While teens were buying fewer bikes, adults were buying more - and wanted lots of accessories, such as clothes, panniers and car racks.

"Melbourne is the highest penetration of bike riding around Australia," Mr Hayden said.