Business names, company names, domain names and trade marks are all valuable assets of your business – sometimes even the most valuable. They can identify and differentiate your business from competitors and help create a connection with customers and clients, in other words, create your brand.
The differences between them can be a source of confusion for a lot of business owners but understanding their differences, how they operate and what to do to protect them could well be essential for the future of your business and brand. So read on…
The differences
Business names
A business name is the name or title under which a person or an entity conducts a business. You must register your business name in ASIC’s Business Names Register (BNR) if you are carrying on a business or trade in Australia unless you fall within one of the exceptions. These include:
- You are trading as an individual and your business name is exactly the same as your first name and surname
- You are an Australian registered company and your business name is exactly the same as your company name (see below)
- You are a partnership and your business name comprises the names of all current partners in the partnership
When choosing your business name, you need to make sure that the name is not already registered, identical or nearly identical to an already registered name, or includes offensive or restricted words or phrases. You also need to ensure that the name does not infringe on someone else’s trade mark.
Be aware that registration of a business name is a legal obligation – it does not provide exclusive ownership of the name. If you want to protect the intellectual property rights in your name or brand, registration of a business name will not on its own be enough. You will need to take separate steps such as registering a trade mark – see below. If you have only registered a business name, bear in mind that a competitor may register a name which is so similar to yours that it may lead to confusion in the minds of your customers and clients.
Company names
A company is a separate legal entity registered with ASIC under its own name. Generally speaking, the name must include ‘Limited’ or ‘Proprietary Limited’ (or their permitted abbreviations ‘Pty’ and ‘Ltd’) at the end. Importantly, however, if you want to use the company name without the ‘Pty Ltd’ or ‘Ltd’ at the end of the name you must also register that name as a business name, for example, if McGuinnLegal Pty Ltd wants to trade as McGuinnLegal, it must register McGuinnLegal as a business name in the BNR.
Be aware that, as with a business name, registering a company does not provide you with proprietary rights to the company name. To fully protect the name or brand, it is advisable to register a trade mark as well, as we discuss below.
More information in regard to the rules for choosing business and company names and where the names must be displayed can be found on the ASIC website at www.asic.gov.au. You will also find on the website a business and company name checking tool.
Domain names
A domain name is your unique electronic address on the internet. Most businesses and organisations choose a domain name which is the same name or word as the business or company name. This makes the internet address easier for customers and clients to remember. Your domain name can therefore be a powerful component of the branding of your business, particularly if you operate online.
A domain name can be licensed for two year periods at a time. If a license is not renewed, the domain name becomes available for other businesses or people to register so keeping abreast of renewals is important. When choosing a domain name, it is important to check that the name does not infringe on an already registered trade mark.
As with business and company names, a domain name does not provide you with any ownership rights over the name you choose. This right can only be obtained by registering a trade mark – see below. However, when you license a domain name you do get the exclusive right to use that name as a domain name for the period of the license.
As part of the steps taken to protect your name or brand, we strongly recommend that when registering your business name or company, you also license your desired domain name or names. Do this early on as we have seen clients try to register a domain name for their unique product/business only to find out that someone has beat them to it and the domain name is no longer available – or only available for a very high price!
Trade marks
A trade mark protects your identity in the market and distinguishes your unique product or service from someone else’s. It can arguably be a business’ most valuable marketing tool, for a small business in particular. A trade mark can consist of a letter, number, word, phrase, shape, logo, picture, aspect of packaging, or even a sound or a smell, or any combination of these.
You can register a trade mark with IP Australia. Before applying to register a trade mark, you should carry out a comprehensive search to make sure that the name you want to use is available. Even unregistered trade marks can be infringed under common law if they have been in use for a substantial time and are within the same category of goods or services as your intended trade mark.
The initial period of registration of a trade mark is 10 years but it can be renewed for successive periods of 10 years at a time. Again, it is important to keep abreast of renewals. Once a trade mark is registered you must use it in the course of your business otherwise it may be removed for non-use.
As opposed to business, company and domain names, a registered trade mark provides an exclusive right to use the trade mark as a brand name. It also gives you the right to sue others for infringement or use of the same name or mark for the same type of goods and/or services (classification). It gives you the exclusive right to let other people use the trade mark and the right to sell the trade mark. Once registered, you have the right to display the symbol ® right next to your trade mark to put others on notice to respect your rights as owner. This is an important tool in protecting your valuable intellectual property.
A trade mark does not have to be registered in order for you to use it and obtain rights in the trade mark. You can also display the TM symbol next to an unregistered mark. However, if you do not register your trade mark, it could be registered by a competitor and you would be forced to defend your rights at common law or you might even need to rebrand. When in doubt, we recommend registration of a trade name.
As you will see from the above, a registered trade mark provides the strongest legal protection for your name and brand compared to a business, company or domain name. If you want to establish a brand for your product or service, you should consider creating a trade mark which is inherently adapted to distinguish your product or service and then registering the mark.
More information in regard to trade marks and accessing the search system can be found on the IP Australia website at www.ipaustralia.gov.au
Importance of getting it right – now!
Business, company, and domain names and trade marks are valuable but often overlooked assets of a business. They each provide different levels of legal protection so it is important to make sure that you have the right protections in place for your name and brand. Taking the time to audit your current protections and assess your future requirements could help protect your name, reputation and brand from unwanted exploitation and abuse down the track. We recommend that you do this now as putting it off can be expensive to fix later on, particularly if you are forced to defend your rights through costly litigation or if you are forced to rebrand.
If you would like our assistance in conducting this audit, or need specific advice on any of these issues or issues concerning your other intellectual property, please contact us at McGuinnLegal.