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Business Name protection

 
PROTECTION BY REGISTRATION

Business Names

A person can trade under their own name, without needing to register that name. The name may include the persons occupation or trade.

Example: Ian Cleaver, Butcher

If a person wishes to trade under any name other than their own name, then by law, they must register that name as a business name.

What protection does registration of the name give?

The protection achieved by registering a name as a business name (or as a company name) is that it prevents anyone else from registering the same name. Variations and "improvements" upon the name are allowable on registration.

Example: Cleaver's Organic Meats

Business names are registered under State based registration systems administered by the State Department of Fair Trading (or equivalent). Business names are convenient if the business is to operate only in one State, as they are cheap to register and renew. It is more expensive and troublesome if the name is to be used around Australia, because it must be separately registered in each State, with a business office address in each State.

Business names can be owned by a person, a partnership or a company. One person, partnership or company can own several business names.

Example: Ian Cleaver may have as business names "Cleaver's Catering Services" and "Cleaver's On-line" as well as "Cleaver's Organic Meats"

Restrictions apply on the names that may be registered as business names, which are the same as for company names - see below.

Company Names

Company Names have a single Australia - wide registration system administered by the Australian Securities & Investments Commission (ASIC). Its register contains both business names and company names. The advantage of registering a company name is that one registration provides Australia - wide protection. It is necessary to purchase and maintain registration of a company to obtain this protection.

Example: Cleaver's Organic Meats Pty Limited

ASIC will not register any name for a company that is the same as or very similar to an existing company or business name.

Example: Cleaver's Aust. Pty Ltd will not be registered if Cleaver's (Australia) Pty Ltd is already registered.

However, ASIC will register names which commercially would be considered similar.

Example: Cleaver's International Pty Ltd will be registered even if Cleaver's Australia Pty Ltd is registered.

Because of the cost, and the accounting complications, it is common to have one company with the main trading name or group name perhaps with a small number of subsidiaries also bearing names, and to register other names that the company desires to use for itself or its products as business names and trade marks owned by that company.

Example: Cleaver's Organic Meats Pty Limited ACN . trading as Cleaver's Catering Services

A company name should always be written with its status - usually "Pty Limited" as part of the name. It should always be followed with its ACN (Australian Company Number). The ACN does not add anything to protecting the name - it is only as a registration requirement for companies. Sometimes companies which are to be deregistered are stripped of their name, with only the ACN remaining so as to preserve the reputation of the name.

If a business name is owned by a company, then on the letterhead, the business name can appear at the top, followed by an asterisk, with the company name appearing elsewhere on the letterhead preceded by the asterisk, and followed by its ACN.

Unavailable Names

There are certain names which will not be registered:-

"Generic" names which describe the business or its product, such as "organic meats", will generally not be registered by themselves. However, they will be registered as part of a name, for example, "Cleaver's Organic Meats Shop".

Some words and phrases cannot be used in company names without Ministerial approval such as: building society, trust, university, chamber of commerce and chartered, as well a words suggesting a misleading connection with Government, the Royal Family, an ex-servicemens organisation or the Sydney 2000 Olympics. According to ASIC, the aim of such restrictions is to ensure that a company's name does not mislead as to the companys activity or purpose.

ASIC may refuse to register names which are offensive or suggestive of illegal activity.

Professional names such as lawyer, accountant, stockbroker, engineer, architect, travel agent, real estate agent and so forth which require licensing will only be registered if a licensing or other certificate is produced.

Names may be unavailable for other reasons, such as by agreement.

A franchisee is licensed to use the franchise name not as part of their name, but as a "banner" under which to trade while the franchise remains current (refer: franchise agreement).

Place names are often used in names. Use of place names can be restricted - for example, owners of well known buildings or places often restrict use of the building or place name.

Example: A butcher's shop in "Westfield Miranda Shoppingtown" cannot use the name "Westfield Miranda Organic Meats" without the permission of Westfield, which permission may only be given whilst the person has a shop at Westfield Miranda (refer: lease).

Domain Names

The internet represents a new medium of communication where the contact address is the key to access. The contact address is known as the domain name for the users website. In the same way as a business telephone number is a valuable asset so too is the domain name registration a valuable asset.

Example: www.cleaversorganicmeat.com.au

As domain names are registered on a country by country basis, applications to register names used internationally must be made in each country registry. An Australian registration is designated by ".au" after ".com" in the name.

U.S. registration is an exception in that it has no country designation - it ends with ".com".

The suffix ".com" denotes a commercial entity as distinct from a non-profit organisation (".org") or the government (".gov").

The internet registries do not require proof of use of a name before registering the name: the first to request to register a name is entitled to that name. They may require evidence of registration of the name as a business name or company name. Once the name is registered, they will not register an identical name. The registry will change the recording of ownership of a registered name only if a person can demonstrate a prior entitlement to or obtains a transfer of the rights to the registered name from the person who owns the registration.

Internet registries will register the slightest variation to existing domain names, on application by unrelated parties.

Example: www.cleaver.com.au will be registered even though www.cleavers.com.au is already registered

Internet registries will register generic names, provided that they are part of the applicants business name.

Registration of a generic name as a domain name can be attractive for many small businesses where their business name is not well-known. The generic name may be better for promotion because it is self explanatory.

Example: the owner of Cleaver's Organic Meats (a registered business name) can register www.organicmeats.com.au as a domain name

In many cases, the domain name will have been already registered and the business registers part of its name or its initials as the domain name.

Example: Cleaver's Organic Meats Australia Pty Limited finds that www.cleavers.com.au is already taken, and decides to use its initials instead: www.coma.com.au or part of its name: www.cleaversorganic.com.au.

If so, for complete protection, Cleaver's should register the initials "coma" as a business name as it is a distinctive word (and therefore a new name), but would not need to register "cleaversorganic" as a business name as it is already part of an existing name.

Trade Marks

Distinctive names and logos are registrable as trade marks. Generic and descriptive names are not.

Example: Cleaver's as a name (with "v" depicted as a meat cleaver) or a logo of a meat cleaver can be registered.

A generic name such as "The Organic Meat Shop" is not registrable as a trade mark as it is not distinctive enough as a name, unless it is written in a very distinctive way or is part of a distinctive name.

Trade marks are registered on a country by country basis. A single registration covers Australia.

Although costly to register, trade marks are a very effective means of protecting a name and logo because the protection available under the Trade Marks Act (in Australia) and international conventions against infringements is based on registration rather than use.

PROTECTION BY USE

Name registration will prevent others from registering the same name or in the case of trade marks, a similar name or logo as a trade mark.

The user of a name can rely upon common law rights of protection, known as "passing off" to protect their name, as well as the misleading conduct provisions of the Trade Practices Act and the Fair Trading Acts.

A business, company name or domain must be used and promoted to build up goodwill in the name. Courts are more willing to protect names which are widely used.

Legal Rights to Stop Misleading and Deceptive Conduct

The registered owners legal rights to prevent competitors (and others) using a similar name or logo generally requires one of these two legal bases:-

It is misleadingly or deceptively similar to the registered owners services or products in the eyes of the public; or

It gives the impression of some association or sponsorship with the registered owners services or products that does not exist.

To be misleading, the "competing" name needs to be in the same field - one cannot prevent use of the same or similar name in another field. Also, the use must be misleading - not merely confusing.

Example: McDonalds -v- McWilliams

The facts: McWilliams labelled a new range of wines McWilliams Big Mac Riesling. McDonalds sued McWilliams seeking an injunction against McWilliams to stop the use of the label on the grounds its use was misleading conduct.

The Federal Court held: that the McWilliams label would not mislead anyone into thinking the wine had anything to do with a McDonalds hamburger: it would confuse the public rather than mislead it. Hamburgers and wine are two very different products.

Use will empower the registered owner and user to prevent use by competitors of similar names and logos.

The following example deals with the protection of a trade mark, where there was wide usage followed by a break in usage.

Example: Visa International -v- Beiser Corp

The facts: Visa International carried on the business of licensing its trade marks for use by members on Visa cards and travellers cheques, which were widely used and advertised. It (temporarily) ceased operations in Australia in 1982.

In February 1983, Beiser Corporation registered the name World Visa Travel Service. It chose a logo very similar to the Visa decal with almost identical colours.

The Federal Court (Beaumont J) held: "Visa International" had a long-established, valuable and substantial goodwill whereas Beiser had only adopted the name relatively recently, it was not a name which bore any literal reflection of their business and no substantial moneys had been spent upon it.

The fact that Visa had taken a lower profile in the market place did not count against it. At all times it was clear that Beiser was well aware of the existence of Visa International - the most obvious evidence being the almost exact adoption of the Visa decal design and colours.

This decision makes it clear that Australian Courts will not allow opportunists to use or maintain the registration of the same or similar names and logos to well known names and logos - what in the internet is called "cybersquatting".

Who takes the protective action?

For business, company, domain names and trade marks protection is obtained by registration and use.

The various registries give no assistance in taking steps to protect names or in determining disputes to rights to similar names. They view their function as being to register names, and to act upon the request of the person who registers the name, to transfer, deregister and so forth.

The task and cost of protecting the name therefore falls upon the owner or user of the name.

In practical terms, if someone is using a similar name or logo, a letter of complaint about the use of the similar name or logo is the first step. If that is ignored or rejected, it depends entirely upon the commercial value of the business name and logo as to whether court proceedings can be justified. If Court proceedings are instituted, then orders may be sought to prevent the use of the name by injunction, or to obtain compensation by way of damages for profits obtained through the use of the name, or both.

The legal position can differ quite markedly depending how the name is registered and how widely it is used.

CONCLUSION

Select a distinctive name for your business. Before registering or using it, make sure by searching that the name or logo is not already registered in a registry and there are no similar names or logos registered.

Register the name in as many registries as possible - the business name, company name and domain name registries are all recommended. Consider seriously registration in the trade mark registry for names and logos.

Then use the name and logo as widely as possible by advertising, by imprinting on packaging, by placing in directories and the like to build up goodwill in the name and logo.

Write to any person who subsequently adopts a similar name in competition with your business to request cessation of use of that name as soon as you learn of it.

Footnote:-

The Cleaver's examples are given with the kind permission of Cleaver's The Organic Meat Store Pty Limited, a client which has registered that name as a company name, Cleaver's as a trade mark name and a meat cleaver as a trade mark logo.

What we can do for you:-

Advise and assist on selection and registration of names in all relevant registries;

Advise on alterations to the existing names and registering further names;

Assist in domain name and trade mark registration.

Challenge use of competing names


Important Notice:-

This article provides a summary of the law. It does not cover the whole of the relevant law and is not a substitute for professional advice.

Moreover, because it avoids legal language wherever possible, there may be some generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications.

Your particular circumstances need to be taken into account when determining how the law applies to you.

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