Business name vs trademark 101
Did you know a trademark and a business name have different purposes, and will protect your small business in different ways? Here’s everything you need to know to keep your name safe.
You probably brainstormed your business name for weeks, right? Months, even. And when you finally landed on ‘the one’, you undoubtedly wanted to lock it down, secure it, and make it yours forever more. And you likely registered the business name… job done. Or was it?
What’s in a business name?
According to the Australian Government’s business.gov.au, a business name is defined as simply “the name under which your business operates and is connected to your Australian Business Number (ABN)”. You only need to register the name once, as it’s recognised nationwide. However, any business that wants to trade under a name that is not its legal name, personal or otherwise, must register a business name with ASIC.
“Every business in Australia must hold a business name registration for its trading name, unless its trading name is the same as its legal name,” explains Brooke Schubauer, legal director at In Motion Legal.
“For example, if you hold a company registration for ABC Pty Ltd, you do not need a business name registration for ABC because that would be considered identical to your company name. However, if you held a company registration for ABC Pty Ltd and wished to trade as XYZ, you would need a business name registration for XYZ.”
But, it’s important to note that a business name registration is no guarantee that you can trade under your business name without infringing another party’s intellectual property rights, and it does not give any exclusive rights to the business name.
“Conversely, a trademark registration confers on the owner an exclusive right to use the trademark in relation to the goods and/or services for which it is registered – and other goods and services in certain circumstances,” says Schubauer.
What is a trademark?
A trademark is a form of brand protection. It’s completely separate to a business name and can encompass so much more than a name or logo – it can be a letter, number, word, phrase, sound, smell, shape, picture, movement, aspect of packaging or a combination of all of the above. If you want to legally protect your brand from potential copycats, simply having a registered business name is not enough, you will need a trademark too, says Schubauer.
“If someone else uses your business name, you cannot take action against them based solely on your business name registration alone.
“What’s more, the business name registration alone would not prevent a third party from registering the business name as a trademark. However, if the holder of the business name had a reputation or goodwill associated with that name, they may be able to prevent registration of the trademark by a third party.
“Failing that, you would need to establish a common law cause of action called ‘passing off’ or breach of the Australian Consumer Law, namely that consumers were misled or deceived into thinking the second business was associated with, or authorised by, the first business.”
To register a trademark you need to file an application with IP Australia, either online or by downloading a paper application from their website. It will then be examined to see if it complies with the requirements of the Trade Marks Act 1995. Providing there are no issues, the application is accepted and published in the Australian Official Journal of Trade Marks. Of course, you can always seek the services of a trademark attorney to file the application on your behalf, and guide you through the process, too.
What to do if your business gets copied
You’ve gone to a huge amount of effort to develop your brand and register your trademark, so it’s crucial you know the steps to take should you discover someone else using it.
Firstly, seek professional advice from a trademark lawyer and be guided by them to determine if there is a trademark infringement. That means being able to prove the trademark is being used by a business that promotes or sells similar goods or services as you.
Admiral fish and Admiral clothing is a good example of a case where both names are registered trademarks, but the chances of consumers confusing fish and clothing are slim. Therefore, an infringement does not exist.
The sight, sound and meaning behind names will also be taken into consideration. For example, naming your supermarket ‘Costcow’ isn’t enough to differentiate it from ‘Costco’, in just the same way that making a name plural or adding verbs won’t get you over the line either.
If your lawyers determine an infringement has actually taken place, however, you can take action by firstly sending a cease and desist letter to the business in question.
Failing that, the next step would be to pursue legal proceedings, with the end goal being to prevent them from operating under the trademark and potentially paying compensation in the form of damages or an account of profits. Of course, this would all be determined on a case-by-case basis.
Protect your future
The moral to the story? Once you’ve landed on a business name, protect it by registering it as a trademark as soon as possible.
“It is a very expensive, frustrating and time-consuming exercise to get your business ready to launch only to find you cannot proceed using your proposed name,” says Schubauer.
“I always recommend conducting a trademark clearance search, considering both trademark and business name registrations, and securing appropriate domain names as early as possible.”
Want regular small business tips and tricks? Sign up to the Prospa Blog newsletter.
A quirky business idea could help you to stand out from the crowd, but how should you go about creating a business niche? Two business owners share their advice.View more
When Sam Baker and Natalie Latter decided to start a family, they created a small business that allowed them to pursue their passions and co-parent their baby.View more
Subscribe to the Prospa Blog
Be inspired! Sign up to Prospa’s newsletter to receive tips, tools and small business success stories straight to your inbox.