“A rose by any other name would smell as sweet,” the Bard of Avon wrote, memorably. But it is not a spirit that is widely imbibed in the world of business. The easier thing is to simply copy the name, or, shall we say, brand.
The recent launch of the National Business Name Register is a timely reminder, and an opportunity, to consider the importance of a business name. Almost every business must have one, but what does it actually get you?
Finding the answer to this question could save you time and money, not to mention a potential loss of business and the stress of legal battles. Consider the following real-life example to fully understand what the consequences could be.
Name is a name, not a trademark
Recently, a national business based in Brisbane found out that a U.S.-based company having exactly the same name and providing exactly the same services had set up shop in Sydney. The Brisbane firm discovered this after a phone call from a regular customer regarding a supposed order that was not in their system.
What had happened was this: The customer had placed his order with the U.S.-based company in Sydney, mistaking it for the Brisbane company. When challenged, the U.S. company simply denied any wrongdoing and, despite legal threats to cease using the name, continued to do so.
How is this possible? After all, the Brisbane business has been around for almost 30 years and has registered its business name in every Australian state, a requirement in previous years.
The answer is obvious but only if you understand the purpose of registering a business name. The aim is simply to allow others to search and discover the details of the person or company that trades under that name. It is a legal obligation only. In other words, do it or there will be penalties!
However, the simple act of registering a name for one’s business actually does not provide the registered owner with ownership of that name or exclusive rights to trade under that name.
To secure the exclusive right to use that name in business, and bar rivals from exploiting that name, owners need to do much more than simply register a name. This is usually done by registering a trademark. This requires a process through the government body IP Australia and assistance from a specialist business lawyer is beneficial, if not essential.
To get back to the Brisbane company, it was advised to quickly apply for a trademark for their business name and did so, only to find out that the U.S.-based company had done the same! So the stress, cost and loss of business and legal battle continues.
The lesson should be clear: Don’t simply register your business name. Go the whole way and secure a trademark. Only that will protect your business.
Joe Kafrouni is a recognised business lawyer based in Brisbane. He leads the business law firm Kafrouni Lawyers and frequently provides legal advice on his blog.