Protection of Company and Business Names
Posted on January 28, 2015
The entitlement to and protection of company names and business names is an important, although often poorly understood, area of the law.
A company name can be registered if it is not identical to another registered company name or business name.
A business name can be registered if it is not identical or nearly identical to another company name or business name.
Australian Securities and Investments Commission (ASIC) is responsible for registering company and business names. ASIC generally will not register a business name that is too similar to another company or business name.
However, as noted above company names may only be refused if they are identical to another name. Thus, slightly better protection for a company name is available if the company also registers its name as a business name.
The reality is that registration of a trading name as a company name or a business name provides very little protection for that name. It does not give exclusive trading rights over that name. Registration does not give much protection, let alone ownership.
That is because the registration of the name is primarily a compliance matter rather than a name protection system. For example, the main policy of the business names registration law is to enable the public to ascertain who is behind a particular name.
Of course a trading name can be very valuable and have considerable goodwill associated with the name. Quite often, the name is distinctive or it is used with very distinctive stylised lettering and/or is associated with a distinctive logo (“brand”).
The best protection available for brands is registering them as a trade mark on the national trade marks register. Once lodged for registration, the owner can stop anyone else using that brand or one that is similar to it and can sue for damages for infringement.
The other side of the coin is that obtaining registration of a company or business name does not protect the registrant against legal action from someone with a similar name that is registered as a trade mark or who has prior use of that name.
Therefore, when applying to register a company or a business name, it is important to undertake searches of similar names to ensure that someone else’s rights and entitlements to a name are not going to be infringed.
Businesses with well-known valuable brands, particularly multi nationals, expend a lot of money and effort in protecting their brands with trade mark registration, surveillance and enforcement of breaches by legal action.
We have seen relatively small businesses in Australia who accidentally register a name that is considered too close to a major brand and have found themselves being sued by a multi national’s team of US attorneys.
Internet Domain names are also important but this is a topic for another time.
In summary, the take outs are:
- before registering any company or business name do thorough searches of any similar names;
- it is best to register a company name also as a business name;
- if you have or wish to develop a valuable “brand”, protect it by registering it as a trade mark.
