Your business name is a valuable asset and worth protecting.
To obtain the exclusive right to use your business name, you need to register it as a trade mark or prove that you hold a trade mark at common law. Just registering a business name or internet domain name is not enough.
Registering a business name with ASIC
When you start a business in Australia, unless you are trading under your own name, you are required to register your business name (the name you ‘trade’ under) with the Australian Securities and Investments Commission (ASIC). This is so third parties (customers and other businesses) know who they are dealing with.
However, merely registering a business name does not give you exclusive ownership rights to that name. Someone who has registered the name as a trade mark will be able to use it – so make sure that someone is you.
What is a trade mark?
A trade mark can be a logo, image, word, phrase, letter, sound, movement, shape or scent that distinguishes your business from the other providers of products and services in a particular market. Trade marks are essential to protect your business name and activities.
Registering a trade mark for your business name with IP Australia grants you the exclusive right to your business name in Australia for an initial period of 10 years. This means you can prevent others from using your business name and take legal action against anyone who does.
Famously, when the American fast food giant, Burger King Corporation tried to enter the Australian market with the name ‘Burger King’ it was prevented from doing so by a takeaway burger chain in Adelaide that already held a registered trade mark over the name ‘Burger King’. As a result, Burger King had to operate its Australian franchises as ‘Hungry Jack’s’, and the rest is history!
On the other hand, we have acted for a number of international businesses that registered a trade mark in Australia when they first started selling goods here, and at a later date have been able to force a transfer of their internet domain name back from people who have been ‘squatting‘ on the name. Often the people squatting on their name are distributors they have appointed when first entering the Australian market.
By registering a trade mark you protect your brand, a valuable asset of your business. If you one day wish to sell your business but you have not protected your brand by registering a trade mark you really don’t have anything to sell.
What is a ‘common law’ trade mark?
Registering a trade mark is the safest way to prevent others from exploiting your business name. A trade mark gives you a ‘statutory presumption’ that the name is yours. However, in some circumstances, you may also be able to rely upon a common law (or ‘unregistered’) trade mark.
Generally, a common law trade mark exists where an unregistered trade mark (such as a business name) has been used for a sufficiently long period of time to develop a substantial reputation for the person using the name – so they have become linked in the minds of consumers. If another business then starts to use the same or similar name in the same market, then people in the market may get confused about who they are really dealing with. The law steps in to prevent this consumer confusion by allowing the pre-existing user of the name to sue the new market entrant for ‘passing off’.
Unfortunately, the process of proving and relying upon a common law trade mark can be costly and time consuming. You need to prove that you are the first person in the market and who the consumers should properly associate with the name. The other difficulty with a common law trade mark is that it only exists in the markets you are trading in. So someone can use your name elsewhere and there may be nothing you can do about it.
This is why it is always wise to register a trade mark, even if you believe that you may have a common law trademark.
Don’t forget your domain name
A website is a ‘must-have’ for most businesses these days so in addition to:
- Step 1: registering your business name with ASIC; and
- Step 2: registering a trade mark with IP Australia,
you should also register a domain name or internet address for your business.
There are a number of different domain name providers. In Australia, the Australian Domain Name Authority (auDa) facilitates the registration of a domain name.
A domain name helps people find you on the internet and gives the owner exclusive right to direct visitors to their website. It is not a business name however, so make sure you have completed steps one and two. Further, having a trade mark application or registration does not automatically entitle you to a particular domain name. If someone has licensed a domain name the same or similar to your trade mark, you need to lodge a complaint with auDa.