Business names vs trade marks: why registering a business name isn’t enough to protect your brand
What’s in a name? Potentially a lot of legal headaches. Choosing a name is one of the first, and most exciting steps in establishing a new business or launching a new product. But many business owners are surprised to learn that registering a business name and registering a trade mark are not the same thing.
Each process offers different rights and protections, and understanding these differences is crucial for safeguarding your brand protecting your brand from the outset.
What is a business name?
A business name is simply the name under which you conduct your business. In Australia, if you operate under a name other than your own personal name or your company’s exact legal name, you are required to register that business name with the Australian Securities and Investments Commission (ASIC).
The process is straightforward: check the availability of your desired name and, if available, register it online through ASIC.
Rights granted by a business name registration
Registering a business name is a legal requirement, but it does not:
give you proprietary rights over the name;
prevent others from registering a similar or even identical business name in another state or territory; or
give you the exclusive right to use the name in branding, marketing, or on products.
The primary purpose of business name registration is to ensure transparency, so that consumers and other businesses can identify the entity behind a business name via the public register.
Availability tests for business names
ASIC will refuse to register a business name if it is identical or nearly identical to an existing registered business name or company name, or if it contains restricted or offensive words. However, the test is relatively narrow and does not consider registered trade marks, domain names, or unregistered names and branding.
This means that even if your business name is available through ASIC, someone else may have already registered it as a trade mark or may be using it online or in another context. This exposes your business to the risk of potential claims for trade mark infringement, misleading and deceptive conduct and/or passing off.
What is a registered trade mark?
A trade mark is a sign used to distinguish your goods or services from those of others. It can be a word, phrase, logo, image, colour, shape, sound, or even a scent.
Registering a trade mark with IP Australia gives you the exclusive legal right to use, license, and take action against others who use the same or a deceptively similar mark in relation to the goods or services for which it is registered.
Rights granted by a trade mark registration
A registered trade mark is a powerful commercial asset. It grants the owner:
exclusive rights to use the mark in connection with the goods or services for which it is registered throughout Australia ;
provides the ability to authorise others to use the mark (for example, through licensing or franchising); and
the right to take legal action against unauthorised use, including seeking injunctions and damages.
Importantly, especially if you are considering selling your business in the future, a registered trade is a form of intellectual property and a valuable asset that can be sold or assigned.
Availability tests for trade marks
The test for trade mark registration is much more involved than for business names. IP Australia will refuse registration if:
the trade mark is identical or deceptively similar to an existing registered trade mark for similar goods or services or
it is not capable of distinguishing your goods or services from those of others.
Enforcement: business names vs trade marks
The ability to enforce rights is where the difference between business names and trade marks becomes most apparent.
Registration of a business name does not give you the right to stop others from using the same or a similar name, nor does it provide grounds for legal action against infringers.
In contrast, a registered trade mark gives you the statutory right to prevent others from using a substantially identical or deceptively similar mark in relation to the same or similar goods or services. Trade mark infringement is a serious matter, and courts can grant injunctions, award damages and order the destruction of infringing goods.
Key takeaways
- Business name registration is a legal requirement, not a form of brand protection. It does not give you exclusive rights to the name.
- Trade mark registration is the only way to secure exclusive rights to a brand name, logo, or other distinctive sign in Australia.
- The availability checks for business names and trade marks are separate and distinct. Passing one does not guarantee success with the other.
- Only a registered trade mark can be enforced to prevent others from using the same or a similar mark. A business name registration alone offers no such protection.
For any business looking to protect its brand, registering a trade mark should be a top priority. While registering your business name is essential for compliance, it’s not a substitute for trade mark protection.
By understanding the differences and taking the right steps, you can ensure your business is both compliant and well-protected in the marketplace.
Our team is experienced in helping clients develop effective IP protection strategies and navigate the trade mark registration process. For more information, please contact Suzie Leask.
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