It is a common misconception in Australia that company names, business names and trade marks are synonymous. They are distinct forms of protection, involve different mechanisms for protection, and give rise to quite different rights. Whilst company names and business names might be used as trade marks, they are certainly not equivalents.
There are three relevant areas of the law which deal with the use of names in trade and each ultimately has a different purpose. The three relevant legal regimes are:
- trade marks (the common law action for passing off and the Trade Marks Act 1995) (protection of proprietary rights);
- companies and business name legislation (Corporations Law and state and territory business names legislation) (identification of traders); and
- consumer protection legislation (Trade Practices Act 1974 and individual state and territory fair trading legislation).
Distinguishing between company and business names and trade marks
A company name is simply a name under which a company is incorporated and by which it is known. The registration of a company name fulfils the requirement that a corporate entity, in order to have some means of identification, is given a name. In Australia each company is also allocated its individual company number, the Australian Company Number (‘ACN’) or Australian Registered Business Number (‘ARBN’).
The business names legislation of the various states and territories in Australia provide that where one or more persons carry on business under a name other than their own, they are required to register that name under the business name legislation, that trading name being known as a business name.
As the registration of business names is on an individual state and territory basis, a business name may be registered in different states and territories by different entities with the result that different traders may operate in different states or territories under the same business name.
The mere registration of a company name or business name creates no legal rights whatsoever. Moreover, the mere fact that one obtains registration of a company name or business name does not give the registered proprietor legal title to the registered name, or a title indefeasible to litigation challenging its rights to that name. Once use of a company or business name begins, reputation is generated and that reputation may be protected by an action for passing off or by recourse to consumer protection statutes.
A trade mark is defined in the Trade Marks Act 1995 as ‘a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.’ A ‘sign’ includes any letter, word, name signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.
The sign indicates that products or services bearing the sign emanate from a particular trade source or have a connection in the course of trade with a particular source. Trade marks are personal property. At common law, a trade mark is the goodwill associated with a name or attribute of a business. Under the Trade Marks Act, specific and separate registered rights are created.
Under the Trade Marks Act registration of a trade mark will be granted if it is distinctive or capable of becoming distinctive.
Company and business names
The registration procedure in relation to company and business names is simple. Subject to some qualifications in respect of previously used company and business names, provided the name sought to be registered is not too similar to another currently registered name, the Business Names Office in each state and territory will register just about any name sought to be registered.
The Business Names Office clerks give no consideration to any reputation that might be associated with the name which it is registering. Further there is no search carried out of the Trade Marks Office database.
In order to register a trade mark in Australia, a trade mark must be used at the time of application for registration or, alternatively, the applicant must have a bona fide intent to use the trade mark in the future. If you are the first person to apply for registration of a trade mark, that claim to proprietorship or ownership of the trade mark can be defeated by a third party if they have been using the trade mark before you applied for registration of or commenced using that same trade mark.
Further, when you apply for registration of a trade mark, the application must be made in respect of particular goods or services or classes of goods or services. Therefore, when you apply to register a trade mark, registration does not enable you to prevent any person from using the same or a substantially identical or deceptively similar trade mark in respect of any goods or services. Rather, the protection under the Trade Marks Act 1995 is generally limited to those goods or services in respect of which you have claimed registration, as well as similar and related goods and services.
Company and business names
The fact that one has obtained registration of a company or business name does not allow any action to be taken to protect the company or business name registration. However, insofar as any company or business name constitutes a trade mark, then it may be protectable.
Unregistered trade marks
Trade marks, whether registered or unregistered, and whether or not constituting a company or business name, can be protected at law.
If a trade mark is not registered under the Trade Marks Act 1995 but has been used in Australia, then the following action might be brought to protect that trade mark:
an action for breaches of the Trade Practices Act 1974 by engaging in misleading or deceptive conduct and/or;
an action for passing-off.
While there are certainly differences between the two types of actions, in order to succeed in either of these actions it will be necessary for the plaintiff to establish that it has obtained a reputation in respect of a particular sign, name, mark, logo, style or device which has been copied or emulated so closely by the defendant that customers or likely customers of the plaintiff are misled into believing that the defendant’s goods or services are those of the plaintiff. However, it is integral to such an action that the plaintiff establish that there has been a reputation earned by it by its use of its sign.
A company or business name can therefore be protected immediately upon use, and once having obtained any degree of reputation recognisable by the courts. The name is therefore protectable like any trade mark, not simply from the act of registration, but rather due to the extent that the company or business name has obtained a reputation.
When a trade mark registration is sought, it is placed in a list of applications awaiting consideration and a fairly rigorous examination takes place to determine whether the trade mark is in fact registrable. The mere fact that an application has been lodged does not mean that the trade mark is registrable. Indeed, even if there are no similar trade marks already registered, there may well be numerous other problems that an applicant will encounter in trying to register the trade mark. The Trade Marks Examiner will carry out fairly detailed searches to determine whether use of the trade mark is likely to deceive or confuse. Not only will prior applications and registrations for trade marks be considered, but in some cases the Internet and Australian telephone directories will be considered.
Company and business names
In contrast, the examination procedure of the Business Names and Company Offices is quite rudimentary. It is a requirement of the legislation governing both business and company names that new names differ from existing names but quite minor variations between names will often be sufficient to secure official approval. Neither business nor company names are cross-referenced with the Register of Trade Marks before being registered. The availability of a company name for registration will be checked by a search conducted of all corporate names registered under the Corporations Law and all business names registered under individual state and territory legislation. In practice a company name will be accepted for registration provided it differs by at least one word from existing company and business names. However, in considering whether names differ by one word, singular and plural words are generally taken to be the same and words such as ‘the’ and ‘and’ are not considered. In addition, some abbreviations of words, such as the abbreviation of Corporation to Corp are regarded as being the same. Similarly, business names must differ from company names by one word in order to be registered. However, in contrast, they must differ from other business names in the same state or territory to such an extent that they will not be confused.
Finally, the Business Names Office searches are carried out on a state by state basis. Thus, if you apply for a business name in Victoria, the only considerations that will apply will be whether or not there is a similar company or business name registered in Victoria. In contrast, the Trade Marks Register is a national register and an application for the registration of a trade mark will not only obtain protection on an Australia-wide basis if successful, but more importantly, will provoke an Australia-wide search of the Register.
Company and business names have taken on increased importance in Australia because in order to be allocated a domain name in the .com.au domain, it is necessary to have a registered company or business name. Ownership of a trade mark by itself will not give rise to a right to a domain name.
This article provides a summary only of the subject matter covered, without the assumption of a duty of care by Freehill Hollingdale & Page. The summary is not intended to be nor should be relied on as a substitute for legal or other professional advice.
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