Is the name of your business protected? You’ll probably say ‘yes’ if you have a business name registration or are a registered company, but here’s the thing: those kinds of registrations are simply not enough to protect the business.
Don’t take my word for it though, two of the “sharks” from Shark Tank, Janine Allis and Naomi Simson, were recently at pains to explain this to one of the hopeful start-up contestants during a pitch on the Channel 10 TV show.
There is so much confusion about protecting business names and it’s not just start-ups that can’t wrap their heads around it. I’ve seen well established businesses that are even operating internationally but haven’t understood how to protect their business name.
Registering the name of your business is only an administrative requirement that allows you to start doing business under that name. What it doesn’t give you, and this is very important to note, is the exclusive rights to use the name or something similar.
It doesn’t give you any rights to stop anyone else from trading under that name or something similar. And lastly, it doesn’t provide you with any protection from the legal implications of infringing on the rights of someone else if a similar name is already in use.
Is it really that serious? What could happen?
Not protecting the name of your business is problematic on many levels.
First off, investors will avoid you like the flu. The “sharks” have made it clear that they are not interested in a business without trade mark registrations in place or at least applications already filed. You can bet this is the same position most investors will take.
Secondly, failing to protect the name of your business can really hurt your pockets.
If the business is infringing the rights of someone else, court action, legal fees and an award of damages could very easily drain your coffers and bring the business to its knees. If a rebrand is required, it can be super expensive to implement, much more than the cost of any protection steps.
And lastly, if you ever decided to sell the business, the value of the business would be lower than if protection was in place as the purchaser would be fully aware that they wouldn’t acquire exclusive rights to the name and the freedom to operate the business under it without any legal risk.
So what is the way forward?
Get your business name registered as a trade mark. We have seen on Shark Tank that the “sharks” want trade mark registrations for every business that pitches before them.
We have seen the expectation that if the business aspires to grow overseas, that international trade mark applications must be filed to protect international commercialisation.
And finally, we have seen the awkward silence that follows when a start-up contestant responds in the negative about having trade mark protection in place. Only thing missing is tumbleweed…
Depending on your chosen name, the process of registering a trade mark can be straight forward. It is always good to conduct a search to see if your trade mark is already registered prior to filing an application. That way you know if there will be any obvious problems during the application process.
It is best that you get an application in as soon as possible because no matter how long it takes, once your trade mark is registered, your rights date back to the day the application was filed. You don’t want a competitor beating you to it, now do you?
A similar process applies to international trade mark protection. You need a registration in every country that your goods or services are offered or where you manufacture your goods.
Don’t wait until you are face to face with a potential investor and have to deal with that tumbleweed-worthy awkward silence just because you haven’t registered the name of your business as a trade mark.
If you are looking for a quick and easy way to find out if your business name is available for use and registration as a trade mark, there are a number of online tools that can support the demands of urgent branding decisions.
Michelle Dowdle is an intellectual property specialist with Sladen Legal