legally fit: is one of your most
valuable assets at risk?
Simply registering your business name is not enough to stop other people from using your name, or attempting to stop you using it yourself.
The name of your business is one of your most valuable assets – it is your brand. It’s how existing clients recognise you, prospective clients may decide to contact you and your ‘raving fans’ refer other clients to you.
But, what if you had to stop using your name – after spending a lot of time and money on signage, advertising, setting up your website, Facebook page and other social media and marketing promotions – or someone else started using your name?
This is exactly what could happen if you don’t take appropriate steps to protect the name and brand of your business, and is the subject of this third instalment in Network’s ‘Legally fit’ series. To read previous articles in this series search ‘Legally fit’ here.
It is a common misconception that registering a business or company (or domain) name gives you proprietary rights to that name. This is simply not the case.
In fact, it is such a common misconception that many players in the industry (some well-known) have not fully and properly protected the names and brands used in their businesses, and they are potentially at risk of either having to stop using, or being unable to prevent others from using, their names and brands.
Business, company and domain names must be registered with the relevant bodies in order to be able to use them. That alone, however, does not prevent someone else from requiring you to stop using your name and brand, or to use your name and brand themselves. The easiest way to protect against this is to register a trade mark.
However, there are some important steps that should be taken before adopting, using and registering a company, business or domain name or trade mark. Before we look at these steps, here’s a brief summary of the registration requirements for company, business and domain names.
In order to establish a company, you must register your company and company name with the Australian Securities and Investments Commission (ASIC). For more information go to asic.gov.au/for-business/starting-a-company.
If you wish to carry on business under a name other than your own personal name or your company name (or certain other exceptions), you must register a business name with ASIC. For more information go to asic.gov.au/for-business/registering-a-business-name.
If you wish to use your own website, you need to register a domain name. For more information go to ausregistry.com.au.
A trade mark is a name, word, logo, brand or other sign which is used to distinguish your services (or goods) from those of other traders.
A trade mark does not have to be registered in order to provide you with rights to the trade mark, but in order to have and enforce (or defend) such ‘unregistered’ rights the owner of the trade mark must establish a reputation in the trade mark, which can be a very costly and uncertain exercise to prove.
Trade mark registration, however (subject to some exceptions), gives the owner the right to the exclusive use of that trade mark in relation to the goods or services for which the trade mark is registered. It also provides rights to stop others from using the same or a similar trade mark, as well as a ‘statutory defence’ against infringement of another registered trade mark (but not a defence that you have ‘passed off’ on someone else’s reputation.) For further information on trade marks go to ipaustralia.gov.au.
Do your homework
Considering the points above, it is therefore important before using a company, business or domain name, or trade mark, that proper searches are conducted to see if someone else is already using and has established a reputation in the name and/or has a registered trade mark for the same or similar name.
Just seeing if a business, company or domain name is available for registration is not sufficient to protect against potentially being required to stop using the name or to prevent someone else from using it.
This article has provided a general outline only of some of the issues to consider in using a name and trade mark in your business. However, before doing so, specific legal advice should be obtained in relation to the proposed use of a company, business or domain name or trade mark.
Leon Ponte, Juris Doctor (Law) is a founding principal of Ponte Earle – Business Lawyers for Business® and is in a select group of approximately only 110 lawyers accredited as specialists in business law by the Law Institute of Victoria. He has a strong personal interest in the fitness industry, holding Certificates III and IV, and has provided advice to fitness facilities, personal trainers and suppliers to the industry. ponteearle.com.au