Many business owners have a misapprehension that they are protecting their business reputation, products, and services by merely registering a business or company name. In fact, the best protection becomes available on registering a Trade Mark.
A business name is merely the name under which a business operates and one should not confuse a business name with a Trade Mark, which is a registered name or logo used to identify the source of the business’ goods and services. The Business Names Act seeks to protect the public by requiring those carrying on a business under a name other than their own name to register that name otherwise there are fines for carrying on a business under an unregistered name.
WHAT DOES BUSINESS NAME REGISTRATION GIVE?
The Office of Fair Trading will ensure that a proposed business name will not cause confusion by being too similar to any existing registered business names or to similar company names registered with ASIC. On registration, the owner of that name must at all times:
Carry on businesses under the registered name;
Display the business name in a conspicuous position outside the registered address, on every business card, letter, receipt, and invoice issued in connection with the business;
Use the full registered name and never use abbreviations;
Keep the registration in place and renew it every three years
WHAT REGISTRATION DOES NOT DO?
Registration of a business name does not provide any protection for the name, mark, or goodwill of a business. Registration of a business name does not:
Create a new legal entity;
Entitle the business to limited liability or corporate tax rates; and
Give the business owner any ownership of the business name
Registration only prevents another person from carrying on a business under that name in Victoria and does not prevent another business located in another state from using that same name, or prevent the importation of goods with similar or substantially the same markings flooding the market.
HOW DO TRADE MARKS BENEFIT THE BUSINESS?
A Trade Mark is a word, phrase, or symbol that indicates the trade source of goods or services manufactured, provided, or marketed by a particular trader. It is a “badge or origin.” The use and registration of a Trade Mark (rather than a business name) gives better protection for trade names, Trade Marks, logos, and goodwill of the business. The Trade Marks Act legislation protects owners of registered Trade Marks against the unauthorised use of Trade Marks, which are distinctively associated with the goods, or services of a particular business.
Registration of a Trade Mark results in benefits to the registered owner and the public, for example:
A name or symbol easily recognised by the public is valuable to the business;
Assures the public that the products or services they are buying have the quality they expect and this confidence encourages long term consumption of the products or services;
Valuable marketing and quality assurance tool;
Distinguishes the products and services from competitors;
Unlike registration of a business name prevents competitors from using the logo or name throughout Australia;
Prevents the importation of goods bearing the same or substantially similar markings;
The commercial value of a Trade Mark becomes clearly recognisable, resulting in increased value in the balance sheet;
The registered owner has exclusive use of the Trade Mark, which can be assigned or licensed;
Faster and more effective protection against infringement is available to registered owners, who only need to show evidence of registration to start proceedings for infringement; and
Certain actions for registered Trade Marks amount to statutory offences
DO YOU HAVE A TRADE MARK CAPABLE OF BEING REGISTERED?
The term “Trade Mark” signifies the rights about a word, device logo, or symbol registered under Trade Mark legislation; for example, one can register these words, devices, logos, and symbols as Trade Marks:
The name of a person represented in a special or particular manner;
The signature of the applicant or a prior owner in the business;
Words that do not have direct reference to the character or quality of the goods or services, and which words are not geographical names or surnames;
Invented words; and
Any other distinctive marks, e.g. logo
Importantly, the marks must be distinctive, or capable of becoming distinctive.
WHAT YOU CAN DO IF SOMEONE INFRINGES THE TRADE MARK
The main remedies available for infringement (i.e. used by someone without permission) are:
An injunction (temporary or final) to stop a person from continuing to infringe the Trade Mark;
Arranging for the Customs Chief Executive Officer to seize and deal with goods imported into Australia if the importation infringes the Trade Mark.
“Mareva Injunctions” stopping one from disposing products that is necessary to satisfy a claim;
Claiming an entitlement to the profits made by the infringing party, which were made by the use of the infringement;
Damages for the loss suffered because of the infringement of the Trade Mark, for example, if sales have suffered;
“Anton Pillar Orders” which permits the legal advisers to enter the premises of the infringing party to search for and remove infringing goods and documents and other evidence of the infringement.
WHAT DO YOU DO NOW?
Do not rely on registration of a business name, if registration of a Trade Mark is appropriate and available. Registration of Trade Marks can add significant value to a business and ensure the most effective legal remedies available against competitors who infringe the Trade Mark.
NEED MORE INFORMATION
Behan Legal assists and advises on these important issues. For an appointment, call 03 9646 0344