When starting a business, do I need a business name? What protection does a business name offer? And what’s the difference between a business name and a trademark?
A business name is the name a trader conducts their business under in Australia. So if it is a sole trader or a partnership, but they don’t want to trade under their own names, they can registered a business name. Billy and Bob run a butcher as a partnership, and they register the business name “Best Butcher In Town”, so that they can trade under that name.
Registering a business name is compulsory, if someone wants to trade under a name that is not their own.
A company name is created when a company is registered and incorporated. A company trade trade under its own name, just like an individual. Or a company can register a business name, or trade under a business name instead.
When choosing a business name or company name, avoid choosing a name that’s similar to an existing name or trademark, to avoid infringing anyone else’s rights.
A business name or company name doesn’t provide you with any protection over the rights or goodwill or brand that you create. ASIC does have some rules around names not being too similar, but if they allow a similar business name to be registered to yours, you generally don’t have the right to object or to any damages.
A trademark is almost synonymous with a brand these days, although a brand also has values, tone and dynamics attached to it as well. A trademark is a sign used in the course of trade, to indicate a commercial connection between goods and services and the owner of the trademark.
Businesses use trademarks so that purchasers and users of their goods or services can easily distinguish those goods and services from their competition. The purpose of a trademark is for a business to stand out, and be distinct from its competitors. Hence, a trademark can have value, like a brand, and is more than a business name which does not offer much protection.
Trademarks can either be registered or unregistered, but registration is encouraged. Registration allows searching to be easier, so that people can see what trademarks are available, and it also makes it easier to enforce your rights if your trademark is registered.
If your trademark is not registered, the trademark would have to be really well known and have a reputation for you to be able to protect it. Then, if someone else uses a name or image similar to your trademark, you can claim that they are trying to pass off their products as yours and ride along on your reputation. It’s misleading for someone to do that, and your reputation might be damaged, so you can force them to stop.
To register a trademark, an application needs to be made to IP Australia. Your application would select which ‘classes’ of goods or services that your trademark applies to. For example, if your business was about food, then you would register the trademark in relevant classes, and not in ‘furniture’ or ‘technology services’.
A trademark is usually more than just a name, or words. It usually involves a certain colour and font, and often an image. Often it has various combinations, and even a slogan too. So a trademark is far more than just a business name – it is the symbols of the brand.
The timing of your application and registration is important, as the owner is usually deemed to be the first person who applies, and then all other uses after registration are not allowed, except by the owner of the trademark.
An application can be opposed. There are certain reasons or grounds that someone can opposed a trademark application, including that the person applying is not the owner, or that the trademark already exists and isn’t registered, or some other technical grounds.
The timeframe for an application going through every stage can be months, and even years long, until the trademark is registered.
If you accidentally infringe a trademark, you do have a defence. But it’s still worthwhile checking the trademark register before registering a business name, company name, or adopting a logo.