Australia: Building brands by branding buildings

What you need to know

• Building owners who focus solely on the value of their physical assets, from commercial to retail or industrial space, may be missing out on additional value that can be added to their buildings through a strong branding strategy.
• Creating and protecting an identity for a building, and strategically exploiting signage rights for that building, can enable building owners to reap benefits for themselves as well as offer commercial advantages to the tenants who occupy their space.
• While recent cases demonstrate that trade mark registrations can be secured to protect the identity of a building, the devil is in the detail and a carefully crafted branding strategy is key.

When assessing the value of buildings, property owners are quick to recognise the inherent worth in a physical asset such as premium floor space in a high rise or a prominent shopfront in a shopping centre.

What can sometimes be overlooked are the significant benefits that a property owner can yield from a well planned and executed branding strategy. Property owners who consider their options to seek brand protection and exploit signage rights for their buildings might be surprised at the 'hidden' value their properties can hold.

Why brand a building?

By creating and protecting an identity for a building that carries recognition and resonance beyond a street address – for example, something more memorable than '71 City Street' – building owners can significantly enhance the value of a property. For landlords, the benefits of branded buildings can include the ability to stand out and distinguish their properties in an increasingly competitive market, and improved prospects of attracting and retaining tenants.

At the same time, tenants can also derive value from a branded building by leveraging the 'profile' and prestige associated with the property they occupy. There is arguably more cachet in saying "We are located in the [insert prestigious name] building" than saying "We are located at 71 City Street."

Trade mark protection is key

To truly enjoy the benefits that can come from branding a building with its own identity, it is important to secure appropriate trade mark protection. Registration of a trade mark provides the owner with a proprietary right and monopoly over the use of a sign (such as a word or logo) in relation to specific goods or services.

Careful consideration must be given to the right trade mark filing strategy in each case. What is clear is that for any trade mark registration to be successfully secured, a mark must be different from third party trade marks and must also be 'distinctive' in relation to the goods or services for which protection is sought.

Choose a distinctive brand

Building owners wishing to seek trade mark protection should consider whether the name or logo of the building is sufficiently distinctive to be capable of protection. That is, does the name or logo of the building distinguish the goods or services for which protection is sought, or would other traders be likely to need or want to use it? If the name or logo is capable of distinguishing the goods and services from those of other traders, a building owner who obtains a trade mark registration can rely on it as a means of preventing unauthorised third parties from leveraging their reputation or controlling how the brand is used.

The case of Mantra IP Pty Ltd v Spagnuolo,¹ considered in detail in this previous update, made plain that trade mark protection is available, achievable and advisable for services provided in constructing, managing, leasing, servicing, maintaining or otherwise dealing with a building. In the Mantra IP case, the mark 'Q1' was considered capable of distinguishing accommodation services on the Gold Coast.

Avoid geographic place names

More recently, the case of Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd² highlighted that as long as a brand is not a geographical place name and has not become part of the common heritage, building owners should consider seeking trade mark protection in relation to management, leasing, servicing, maintenance and associated services. In the Accor case, the mark 'HARBOUR LIGHTS' was considered to be capable of distinguishing accommodation services, although the mark 'CAIRNS HARBOUR LIGHTS' was not. This was because the latter mark included a direct reference to the location where the relevant services were provided.

Carefully consider signage rights

Signage rights often form an important part of leasing arrangements.

Some tenants, by the nature of their businesses, will require signage for their own retail shops or car parks, but building owners can obtain significant benefit from granting a tenant with signage rights for an entire property – for example, a logo at the top of a high rise building. That said, landlords should carefully weigh up the commercial implications of granting signage rights to one tenant over another, and consider how their other tenancy prospects might be affected.

In particular, landlords should consider:

• whether they want to risk their building becoming known by reference to a tenant's brand, rather than the building's brand, address or location
• whether the benefit of their building being known to house a 'heavy hitter' tenant who has received signage rights could be outweighed by limitations on the opportunities they might otherwise have with other prospective tenants, such as opportunities to lease space, approve assignments or grant sub-leases, or allow signage rights to competitors
• whether an extended or lucrative lease agreement with a significant tenant may leave them susceptible to providing free signage rights.

Key takeaways

By creating and securing trade mark protection for a building's brand, building owners have the potential to unlock extra value in their properties. In order to maximise their chances of obtaining trade mark protection for a building's identity, building owners should focus on choosing distinctive brands that avoid geographic place names, and should seek advice about the best filing strategy for their particular circumstances.

Further, to ensure they get the greatest benefit from any signage rights granted in relation to a building, building owners should conduct a thorough cost / benefit analysis and ensure that the signage rights they do grant will complement, not detract from, their overall branding strategy.

Thanks to Laura Holmes for her assistance in preparing this article.

Footnotes

¹ Mantra IP Pty Ltd v Spagnuolo [2012] FCA 769.

² Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2015] FCA 554.

This article is intended to provide commentary and general information. It should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this article. Authors listed may not be admitted in all states and territories