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It is a (very!) common misconception that the registration of a business name (under the Business Name Registration Act 2011 (Cth)), company name or a website domain name confers some form of ownership or exclusive rights to the use of that name in Australia. It doesn’t!
Only if the name is registered as a trade mark does it confer such rights. Having a registered trade mark can provide legal protection for your business, its brand(s) and goodwill and gives you statutory rights to prevent another business from using the same or similar trade mark in conjunction with the goods and services of the same description. A registered trade mark can also be your most valuable marketing tool, as well as quite often an appreciating asset on you balance sheet.
Choosing a business name, or a domain name that infringes (inadvertently or otherwise) an existing trade mark can be a costly exercise. It could mean drawn out disputes, legal costs and possibly being compelled to cease using your business name amongst other matters – see below.
The Business Names register is administered by the Australian Securities and Investments Commission (ASIC).
The purpose of registering a business name is to ensure that consumers and businesses that you deal with are able to identify or ascertain who the operator or actual legal owner of the business is. Accordingly, businesses must either trade under its own name or a registered business name.
Registration also ensures that every business complies with the Business Name Registration Act 2011 (Cth). Registration is mandatory (with some exceptions) and it must be done before the business starts trading. Businesses who fail to register their business name can be fined.
Be aware of the following that appears on ASIC’s website when you register a business name:
As a precaution, you should always check whether your business name may infringe a registered trade mark by conducting a trade mark search using the Australian Trade Mark Search function on IP Australia’s website, as well as an internet search for similar instances of the name. This is because the Business Names Register only alerts the registrant if the registrant is seeking to register a business name that is identical (an exact match) with another registered business name. It will not search the Australian Trade Marks Register for substantially identical or deceptively similar names.
If your registered business name is substantially identical with, or deceptively similar to a registered trade mark, it may be infringing that registered trade mark. Where an infringement has occurred, among the remedies available to the registered trade mark owner as we will briefly outline below, the registered trade mark owner may also apply to the courts to cancel your business name.
If the trade mark owner is successful, it will mean you have to trade under a new business name, change your marketing and advertising materials and signage, and lose the branding and the goodwill that you have built up under the old business name.
A domain name is your unique website address (or more specifically the Uniform Reference Locator (URL) on the internet (e.g. https://asic.gov.au, it is the online identity for your business. Modern technology and our increasing reliance on the internet means that domain names are important marketing tools to generate traffic for businesses.
A Domain Name is separated into various distinct components:
In Australia, the entity that is responsible for administering .au domains is .au Domain Administration Limited (ACN 079 009 340) (auDA). auDA has published a set of rules (.auDA Rules) under which a .au domain name can be granted. This includes, for example, that in order for an applicant to be granted a licence to use a .com.au or a .net.au domain name, the applicant must have, among others:
A third party cannot register a domain name that is an exact match of the domain name that you have already registered. However, a third party can still apply for a licence to a domain name that features the same 2LD but with a different gTLD.
Globally, the entity that is responsible for the administration of the Domain Name System (DNS) is the Internet Corporation for Assigned Names and Numbers (ICANN).
While outside of the scope of this article, briefly, it is important to note that if a dispute has arisen with the registrant of another .au domain name in relation to one or more of the .auDA Rules, using the .au Dispute Resolution Policy (auDRP) (which is intended to be a cheaper, speedier alternative to litigation with respect to a domain name) may be beneficial to resolving such a dispute. A panel of one or three members will arbitrate the matter and determine whether the domain name is to be “dropped” (in other words, made available on the open market), or transferred to another entity.
The auDRP is an adaptation of ICANN’s Uniform Dispute Resolution Policy (UDRP) which is also directed at resolution of disputes among domain name registrants internationally.
Similar to a business name, if your domain name infringes upon a registered trade mark, the trade mark owner may, among other remedies, issue a ‘cease and desist’ letter, demanding that you cease using the domain name. The trade mark owner can also commence proceedings against you for the tort of ‘passing off’ (briefly, where one party trades on the goodwill or reputation of another trader, causing that other trader loss or damage), or for infringing their registered trade mark; and may also initiate auDRP or UDRP proceedings against you.
Section 17 of the Trade Marks Act 1995 (Cth) defines a trade mark 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.
In simpler terms, a trade mark is a “badge of origin”. It distinguishes between the goods and services of one trader from those of another.
A trade mark can be a word, phrase or letter in English or a foreign language, or a number, shape, aspect of packaging, picture, logo, or even sounds, smells, and a particular colour. So long as it is:
a trade mark is likely to be registrable.
A registered trade mark under the Trade Marks Act gives you the exclusive legal right to use, license and sell your goods and services using that mark in Australia.
Once registered, it is a balance sheet item and is an appreciable asset. When you eventually sell the business, the registered trade mark may add value to the sale.
However, unlike a registered business name, which only requires the payment of fees to maintain the Business Name on the register, it is also important to maintain the registration of the trade mark. In addition to paying renewal fees every ten years, it is also necessary to continue using that mark as a trade mark in conjunction with the trade in the goods and services claimed under that registration. There are different means by which a trade mark can be removed from the register.
Most commonly (there are other, less common grounds by which a trade mark can be removed from the register), removal of a registered trade mark can be due to non-use, or because the trade mark has become generic (if it is generally accepted in the relevant trade as the sign that describes the relevant good or service).
It can also indicate financial control, for example, where the licensor is a parent company with more than 50% interest in the licensee, or where resources are shared between the licensor and licensee.
In many instances, businesses may ‘park’ their IP in a holding company and licence the same to a trading entity. It is therefore important that a licence is carefully drafted to ensure that the licensor maintains ‘control’ over the use of the trade mark, or it may be liable to be removed for non-use.
