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Why your business name is worthless (when it comes to brand protection)
It is a common misconception that as the owner of a business name registration, you get some legal right to the name. To be crystal clear – you don’t.
When it comes to brand protection, business names are close to worthless.
What’s in a name?
Under the Business Names Registration Act 2011, a person who trades under a name that is not his or her own name must register that name as a business name.
So, if your name is John Smith and you trade under the name ‘John Smith’ you don’t need to register. If, however, you trade under the name ‘John Smith, Plumber’ or ‘Smith Plumbers’ or ‘Smith and Son’ or anything other than ‘John Smith’, you must register the business name.
The purpose of business name registration
The point of the business name registration system is to protect consumers.
It provides a register where people can identify who they are actually dealing with. It allows people to find out that ‘Smith and Son’ is a business operated by John Smith, the sole trader, or Smith Pty Ltd, the company, or Mr and Mrs Smith, the partnership.
Business name registration is not designed to protect a trader’s goodwill in his or her name. It’s designed to prevent businesses ‘hiding’ behind a different name.
So given the purpose of business name registration – consumer protection not trader protection – it is easy to understand why a business name doesn’t give you any actual rights.
Get the rights you need
The only way to get actual enforceable proprietary rights over a name is to register it as a trade mark.
A registered trade mark will give you the exclusive right to use it in relation to the specific goods and services set out in the registration.
With a registered trade mark, you can stop your competitors using the same or a similar name. With a business name, you can’t.
And once you have a registered trade mark, no one can tell you that you’re not allowed to use it. Despite a business name registration, you can still be accused of misleading conduct or trade mark infringement.
More than a name
The other limitation of business names is that you can only register a ‘name’.
That may sound obvious, but a business’ goodwill is often based on more than just its name. It may sell goods or services using unique brand names, product names, logos or artwork. It may use catchphrases, slogans and taglines that are memorable and have gained a reputation.
All those things can be protected by trade mark registration. Trade mark protection can also extend to sounds, jingles, aspects of packaging, shapes and even colours and smells.
So, think of your business name registration as a name tag that does no more than let people know who you are.
But if you want to have the exclusive use of your name and the ability to protect it and stop others from using it, then what you need is a registered trade mark.
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Markwell is a boutique intellectual property firm that provides no-nonsense, business-relevant, expert advice in trade marks, domain names and intellectual property law. Representing brand owners in Australia, Asia and Worldwide.
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