Deciding upon names and trade marks for your business may be an integral part of your brand identity and showing your customers who you are.
Business owner must consider some legal implications at this stage. Some of the more essential aspects are outlined below:
A registered ‘business name’ is a trading name under which you carry on a business or trade. It should be as distinctive as possible to prevent any confusion to the public.
The registration/issuing of a Business Registration Certificate is the responsibility of the state in which your business trades. Where your business operates in several state, you should register in each state. Business Name registration is compulsory and business should not be commenced before legitimate registration is complete. There are exceptions, including where you and/or your partner are trading under your own names, i.e., your first name(s) and surname(s). You may not alter this. For example, if your name is John Smith, you would need to register a business name if you wished to trade under the name of John Smith & Co.
Protecting a Business Name is done using other legal avenues. The associated legislation attempts to prevent the registration of names which will mislead or confuse the public. This legislation also precludes the use of words such as “building society”, “ANZAC”, “Royal Family”, any offensive words or words used to advertise illegal activity.
Registration of similar names, however, is not prevented under the legislation. To ensure that no one else is able to register a similar name, you are required to register your business name as a trade mark. In doing this, you gain many additional protections that registration alone will not provide. Conversely, it is also important when registering a business name, to search both the Business Name Register and the Trade Mark Register, which can be found on IP Australia’s website to ensure that you are not infringing on anyone else’s rights.
When considering a potential Business Name for registration, it is advisable you first check its availability. Names identical to an existing business or incorporated association in the State, or Company Name in Australia, will not be registered. However, a Company may apply to register its Company Name as a Business Name. The State departments will not register any proposed name if, in their opinion, it is too similar to an existing business or incorporated association name in the State or Company name anywhere in Australia.
There is confusion between ‘Company’ and ‘Business Name’ registration. A Company Name is a separate legal entity registered with ASIC. On the other hand, a ‘Business Name’ is not a corporate body, and therefore, not a legal entity. It cannot incur legal rights or obligations, cannot enter into contracts in its own name, can’t sue or be sued and can’t own assets.
A business owner cannot use or refer to a registered Business Name to invite the public to invest in, lend or deposit money with the business.
Businesses and individuals mistakenly believe that the registration of a Business, Company or Domain Name provides a proprietary right in the name equivalent to Trade Mark registration, or immunity from a Trade Mark infringement claim. However, the registration of Business, Company or Domain Names of itself gives no exclusive right to use the name. A Business Name search will not prevent the name being used by somebody who has registered it as a Trade Mark.
This confusion means many fail to conduct adequate searches of the Trade Marks Register which may lead to the infringement of another party’s Trade Mark and substantial costs being incurred if the Business or Company Name must be changed. It also means many fail to maximise the protection of their Trade Marks.
While websites are growing in popularity for businesses, registration of a company or business name does not guarantee an entitlement to register the same name or similar name as a domain name. Checking the availability of domain names at the time of registration of a business name is recommended to ensure consistency.
Even after a business name is registered, a previously registered entity can still challenge your registration, especially if they can prove that your registration is for the purposes of deceiving the public. The previously registered business may sue you under the Australian Consumer Law or claim damages under an action of “passing off” in Common Law. Possible legal remedies include the removal of your business name from the Register, and even an order to pay compensation to the original business for loss of trade as a result of the similarity.
Pursuant to The Victorian Business Names Act 1962, the owner of a business must commence business using the registered Business Name within two (2) months of registration. This can include preparation, installing fittings for your shop or ordering stock. You do not necessarily have to have any customers, but must be making steps towards conducting business. The idea is to prevent people registering names that they have no real intention of using themselves.
A Business Name Owner must renew the Business Registration every 3 years if you continue to trade under the Business Name.
Many new business applicants think that registering a Business Name under the Business Names Acts protects them from others using that Business Name. However, registration of a Business Name does not give you exclusive rights to use a name or words contained in a name. Another name may be registered containing the same words as your Business Name, prefixed or suffixed by a distinguishing word or words. For example, the registration of the name “Good Bookkeeping ” would not stop someone registering the name “AAA Good Bookkeeping.”
Once your Business Name is registered it must be displayed correctly. Your Business Name must be on public display. It should be shown clearly on any business letter, statement of account, invoice, official notice, publication, order for goods or receipt issued or signed by the owner in connection with the conduct of the business. Your Business Registration Certificate must be displayed in the principal place of business where it can be easily seen.
Seek advice to ensure rights and obligations are protected and honoured. If you would like more information on business names and trademarks, please navigate to the websites below as a starting point.
http://asic.gov.au/for-
www.ipaustralia.gov.au/trade-marks/understanding-trade-marks/trade-mark-basics
For more information, contact:
e: lawyers@mcpgroup.com.au
p: (03) 9620 2001
w: www.mcplegal.com.au
