Why you need to protect your company and business name
Your company name or business name are monumental to your brand recognition. For convenience, we will refer to both as “company name”. The right company name provides a powerful first impression for your business. As you continue trading under your company name, its importance to the value of your business grows. It is therefore important to protect this name. Unfortunately, the mere registration of the company name is often insufficient to provide the necessary protection.
Take for example, a situation where a third party registers a company or business name which is similar to your company name, in order to ride on the coat tails of your reputation which you have spent time and money building? Is there anything you can do?
Will ASIC help?
The Australian Securities and Investments Commission (ASIC) is Australia’s corporate, markets and financial services regulator, and is the government agency responsible for incorporating companies and registering business names in Australia.
ASIC will not register a company name that is identical to a name that is already registered by a company, or already registered as a business name.
However, there is nothing preventing a third party from registering a similar (but not identical) company name.
This means that ASIC will not refuse to register a name deceptively similar to your company name.
Has your trade mark been infringed?
A registered company or business name, does not automatically give you trade mark rights for that name (or specifically, the words comprising your company name).
In order to obtain trade mark protection under the Trade Marks Act, you must have a registered trade mark. It is common for companies to register their company names as a trade mark, particularly if it is selling products or services under a brand which is identical to their company name.
A person will infringe a trade mark if the person uses as a trade mark, a sign that is substantially identical or deceptively similar to your trade mark, in relation to goods or services in respect of which the trade mark is registered.
Therefore, if you have a registered trade mark which is identical to your company name, a third party company which makes available for sale to the public similar products or services under a similar name, may have infringed your trade mark rights under the Trade Marks Act. The infringing name, in this case, does not have to be identical, only “substantially identical” or “deceptively similar”.
However, trade mark protection will only assist you if the third party business is selling their products using a similar business name “as a trade mark”.
Are there other grounds for a claim?
A third party which has not breached any trade mark rights may nevertheless have breached the Australian Consumer Law (ACL) and or engaged in the tort of passing off.
Pursuant to section 18 of the ACL, a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
The tort of ‘passing off’ is an action available where a party suggests, in the course of trade, a connection with another party’s goods or services when that is not the case, and where this representation causes damage, or a threat of damage to the proprietary interests in the second party’s reputation or goodwill.
Unlike a trade mark infringement claim, claims made the ACL and passing off take into account a wider range of surrounding circumstances.
In Burswood Management Limited & Ors v Burswood Casino View Motel/Hotel Pty Ltd (1987) ATOR 40-824, the Court held that held that it was unlikely that the mere registration of a company name would constitute misleading or deceptive conduct in circumstances where a business owner had a similar registered business name. However, the registration of the company name, combined with the following conduct; feasibility study, promotional brochure, advertisements in the newspaper, advertisements in the telephone directory and causing the company receptionist to answer the telephone using the company name constituted misleading and deceptive conduct.
It is possible to seek an order from the Court requiring the third party company to change its name, so as to not continue to mislead or deceive consumers.
Points to take away
–There are separate registration systems for registering company and business names, trade marks and domain names (ie websites).
–Once you have decided on a company and/or business name, you should check that name has not been registered:
- with ASIC (as a company or business name),
- as a trade mark with IP Australia; or
- as a domain name (see also our previous article regarding domain name protection.
If these checks are not undertaken at the start, often companies find themselves in a position of having to change names at a later date. For example, a company is able to register its business name but is unable to use that name on its product because their chosen company name has already been registered as a trade mark by someone else.
–If the name has not been registered as a company name, trade mark or domain name, you should take steps to do so.
–Registering a company name does not prevent third parties from registering a similar but not identical company or business name.
–In order to prevent someone else from registering a trade mark or domain name which is identical to your name, you must have an earlier registered trade mark and hold a licence for the domain name.
–Companies with registered trade marks will find it easier to enforce their trade mark rights compared to those who rely on unregistered trade marks.
–If no trade mark infringement claims exist, then depending on the circumstances, claims may still be made under the ACL for misleading or deceptive conduct and/or passing off.
How we can help
If you have an intellectual property related enquiry and require advice tailored to your particular circumstances, please contact Juliana Ng on jng@mtpartners.com.au
Juliana holds a Master of Laws from the University of New South Wales, specialising in Innovation Law (IP) and Media and Technology Law.
This article is intended to provide general information only, and is not to be regarded as legal advice. Formal legal advice should be sought in relation to particular transactions or circumstances.
Disclaimer:
- Juliana is experienced in intellectual property matters including domain name disputes, trade mark registration applications, trade mark infringement related issues and misleading or deceptive conduct and passing off claims.
- The above provides general information only.
