Australia: How to choose a new product name - The dilemma of descriptive or generic brands

Choosing a brand name for your new business or product line is not an easy task these days. From a legal perspective, you need to consider not only what you are able to register yourself and what you can legally protect but also, what brand names are already in use to avoid possible infringement. Research is the key - but you need to know what you are searching for.

All new businesses must either operate under the name of the individual, or company or register a business name. In addition, most people register a domain name to enable them to launch a website and maintain contact with their customers. Business, company and domain name registries are a good place to start searching but the results are only indicative of what registrations may already exist and these should lead you on to other enquiries.

You do not have to choose the same business name as the domain name. The domain name is more likely to be the new product brand name unless your business name will also be the same as the goods and services being provided in the business.

Domain name vendors or brokers often recommend that you choose a two word domain name which means you are more likely to receive "hits" from your target market undertaking internet searches. The key here may also be to use descriptive names for your products or brand but this may not be the best decision if you are wishing to achieve ownership rights of that brand name.

It is also often recommended by advertising agencies that, in managing your marketing strategy, you need to choose a name that has a descriptive element to it. Again, this encourages a potential customer who Googles that descriptive element to reach the link to your website thereby potentially increasing sales.

However, when you register a business or domain name, you do not acquire any proprietary rights in that name. That means that you have no exclusivity of use and you will not be able to prevent other traders from using that name. It is only when you have been able to register a trade mark under the Trade Marks Act 1995 ("Act") that you are able to prevent others from trading off your brand name under the Act. If you fail to register your trade mark you may still have rights arising from misleading and deceptive conduct under the Competition and Consumer Act 2010 or "passing off" under common law if competitors seek to unfairly use your brand name, but a registered trade mark provides greater protection.

This is the conundrum that faces a person opening up a new business today - choosing a brand name that satisfies marketing objectives, achieves an internet presence and also complies with intellectual property law. If you are going to be in the new product line for the long haul, you must choose a brand name that is capable of being registered as a trade mark and that means it must be distinctive and not descriptive or generic.

Choosing a name that is both distinctive and fulfils the other criteria is a difficult path.

When you make an application to register a trade mark under the Act, upon registration, you have the exclusive right to use the trade mark and to authorise other people to use the trade mark in the classes of goods or services for which you have registered the mark. Only you (and the people you authorise) are able to exploit that trade mark and use it to brand the goods and services that have been noted in the registration. Because of this, there are strict rules under the Act about what type of brand names will be allowed to be registered as a trade mark.

Trade marks that are descriptive of the goods and services the trader is branding will generally not be allowed to be registered. An example of a descriptive brand name would be if you tried to register the word mark "Glass Supply & Repairs" for a trader offering goods and services associated with supplying and repairing windows and other glass products. The Act prohibits the Registrar from registering such a trade mark because the name describes the nature of the goods and services being offered.

Only a trade mark or brand name that is "inherently adapted to distinguish" the designated goods and services is able to be registered. This means that it has to be able to distinguish the products branded with the trade mark from other products of a similar type likely to be sold in the same marketplace. The Registrar will reject the application for a trade mark that ordinarily indicates the kind, quality, quantity, intended purpose, value, geographical origin or the time of production or delivery of the goods and services.

However, there are exceptions to this general rule. If you have been trading for many years by using a descriptive trade mark in good faith and you have a body of evidence that proves that you have established a considerable amount of goodwill and reputation in the sale of the products or services branded with that trade mark, you may be able to register it. Nonetheless, it is prudent not to rely on these exceptions to obtain a registered trade mark and they are not available in the early days of trading.

So, in choosing a name for your new products or business, have a checklist for each different category of registration and find a brand name that is able to fit within the parameters of all classes of registration referred to above without affecting the rights of others already in the same market space.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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