find the latest legal job
Corporate Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Highly-respected, innovative and entrepreneurial Not-for-Profit · Competency based Board
View details
Chief Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Dynamic, high growth organisation · ASX listed market leader
View details
In-house Projects Lawyer | Renewables / Solar | 2-5 Years PQE
Category: Generalists - In House | Location: All Australia
· Help design the future · NASDAQ Listed
View details
Insurance Lawyer (3-5 PAE)
Category: Insurance and Superannuation Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Dynamic organisation ·
View details
Legal Counsel
Category: Corporate and Commercial Law | Location: North Sydney NSW 2060
· 18 month fixed term contract · 3-5 years PQE with TMT exposure
View details
Online retail fraught with legal danger

Online retail fraught with legal danger

Retailers engaging in the booming online sales business need to get a handle on advertising, marketing, regulatory and tax issues in local jurisdictions from the outset, an IP lawyer has said.

Melinda Upton, head of DLA Piper Australia’s trademarks/branding practice, said her clients are coming up against issues in China and many Asian countries where the ‘first-to-file’ rule applies between competing trademark (TM) owners. 

“It’s important to make sure [clients] have a strategy that is regionally focused. You actually have to anticipate issues like seeking trademark protection in countries where first-to-file can actually trip you up if you take a more reactive approach,” said Upton.

By failing to be proactive and filing TMs on Chinese-bound goods and services first, businesses have to claw back their intellectual property (IP) or resort to buying a licence from the party who filed the TM first.

Wayne Zappia, a partner with Lavan Legal, notes that “in a country where manufacturing counterfeit products is as big a business as manufacturing legitimate merchandise”, it is wise to ensure TM rights are protected as early as possible.    

Regulatory issues are also important to consider, said Upton, who works with DLA’s transport lawyers to advise on the movement of particular products.

Some online sellers, like Hong Kong-based cosmetics site and UK fashion retailer, have experienced vast success in the online space, but Upton said this requires thought-out strategy in terms of: the storage of products; the moving of goods; local regulatory issues in terms of labelling, advertising and marketing; where the TM is protected, and employment issues.

“If there’s a longer-term plan to enter the online market globally then [the client’s strategy] needs to be thought out … and run at the outset so they’re cost effective and business isn’t distracted by focusing on disputes with third parties that might have piggy backed their reputation,” said Upton.

 “It all sounds easy but the work involved is greater than if you’re focusing on a simple bricks-and-mortar prospect.”

Levelling the playing field

NAB’s latest Online Retail Sales Index, released late last week, shows that domestic online sales rose 24 per cent year-on-year in July and international internet sales rose 29 per cent.

Online sellers are clearly gaining an edge over traditional bricks-and-mortar retailers, but Government plans to dramatically lower the $1,000 GST-free threshold on overseas goods purchased online to $30 presents another potential hurdle.

NSW Treasurer Mike Baird, who yesterday called for the threshold to be lowered, pointed to precedents around the world, including Canada, where tax kicks in on goods priced at $19, and the UK, where $28 is the threshold.

Some believe the change, which was recommended by the Productivity Commission in November last year, could reap millions in revenues and help level the playing field with the local retail sector.

If it goes ahead, both retailers and customers would feel the effects in a market where margins are already tightly squeezed, said Upton. 

“Shoppers will be closely scrutinising their purchases and weighing up the benefits of online vs. in store. Retailers will need to ensure they have effective strategies in place to cope with an overhaul of their internal systems, as well as the commercial reality of a possible downturn in online profits,” she said.

The Australian Retailers Association (ARA) believes the current tax exemption affects them, but the commission argues it is only a small part of the competitive disadvantages they face.

It recommended deregulating business trading hours to increase retailer flexibility and suggested other changes to workplace laws may be needed and should be looked at as part of the Fair Work Act review, which starts next month.

There is still consumer appetite for the traditional retail experience and businesses, even if they are "firm on bricks and mortar", are increasingly forming a “dual focus” through an online arm, said Upton.

“There is a need for retail businesses to engage in [the online space] and, unfortunately, I don’t think that they’re in a position to ignore it," she said.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Online retail fraught with legal danger
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
LCA president Fiona McLeod SC
Aug 17 2017
Where social fault lines meet the justice gap in Aus
After just returning from a tour of the Northern Territory, LCA president Fiona McLeod SC speaks wit...
Marriage equality flag
Aug 17 2017
ALHR backs High Court challenge to marriage equality postal vote
Australian Lawyers for Human Rights (ALHR) has voiced its support for a constitutional challenge to ...
Give advice
Aug 17 2017
A-G issues advice on judiciary’s public presence
Commonwealth Attorney-General George Brandis QC has offered his advice on the public presence of jud...
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...