BUSINESS
NAME PROTECTION
Business and product names are the
brand names and logos the badges of a business and its
products. Considerable thought goes into selecting a
business name and creating the logo. Often considerable
money is spent promoting the name and the logo. When
a business discovers that a competitor is using a similar
name or logo, it is a distressing experience and thoughts
turn to protection.
Protecting the name and the logo requires
a mixture of taking all steps necessary to register
the name and the logo, and knowing what your legal rights
are when met with the situation of a competitor using
a similar, misleading name and logo.
This article looks at protection strategies
for names as business names, company names, domain names
and names and also logos as trade marks, before and
after a similar name or logo is noticed
BUSINESS NAME 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
Office of Consumer and Business Affairs (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 owner 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
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.
The symbol TM near a word or logo
means that it is claimed as trade mark and not necesssaily
a registered trade mark which would be indicated with
the symbol ®.
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 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.
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. Make an appointment now with Andrew Rogers
Lawyers to discuss your needs and how we might
help you.
|
Business
and product names are the brand names and logos the
badges of a business and its products. Considerable
thought goes into selecting a business name and creating
the logo. Often considerable money is spent promoting
the name and the logo. When a business discovers that
a competitor is using a similar name or logo, it is
a distressing experience and thoughts turn to protection.