By Xian Li-Davies and Law Central Legal

An important part of starting a new business is to create a brand (e.g. through a business name).  Given the popularity of social media, businesses are increasingly achieving this through having an online presence (e.g. through a website and domain name, Facebook or YouTube). 

There are important differences between a business name, a domain name and a trade mark (particularly with regards to proprietary rights) which this article explores below.

Business Names

A business name is a name under which a person, partnership or company trades. Under the Business Names Registration Act 2011 (Cth) (“Act”), all business names must be registered with the Australian Securities & Investments Commission unless an exemption applies.

The most common exemptions are if:

1. the business name owner is a person and the business name is that person’s name (e.g. Vera Wang trading as Vera Wang);

2. the entity is a company and the business name is the company’s name (e.g. Joe’s Electrical Pty Ltd trading as Joe’s Electrical); and

3. the entity is a partnership and the name consists of all of the partners' names (e.g. Jeremy Forsyth and Mary Blundell trading as Forsyth Blundell).

Under the Act, registering a business name:

1. does not stop another person from registering a similar business name;

2. does not give you exclusive rights to use all or part of the business name; and

3. will not prevent somebody who has registered it as a trade mark from using the business name.

Domain Names

A domain name is your website address on the internet.  It generally assists your customers in finding information about your business.

Each website has its own distinct domain name (e.g. www.joeselectrical.com.au) to distinguish it from other websites (e.g. joeselectrical.co.com).

Like business names, registering a domain name will not give you exclusive rights to use all or part of the domain name. 

In fact, most domain name providers place an obligation on you to indemnify them (i.e. reimburse them) for any loss they suffer as a result of your domain name breaching the intellectual property rights of third parties (e.g. the whole of a trade mark that has the same name as your domain name).

Trade Marks

Unlike business names and domain names, trade marks do confer proprietary rights on its owner.
A trade mark is a way of identifying your goods or service.  The most common form of a trade mark is a logo, but it can also include words, sounds and smells or any combination of these. 

Example of well-known registered trade marks:

Trade marks are registered with IP Australia and can take six to nine months to be examined and registered.  Once registered, a trade mark owner will have, among other things, the following proprietary rights:

1. an exclusive right to use their trade mark as a brand name for the goods or services specified in the registration;

2. an exclusive right to authorise other people to use their trade mark for the goods or services specified in the registration; and

3. a right to sell or transfer their trade mark to another person.

Notwithstanding the above, owners of unregistered trade marks are not without rights.  They may have a claim at common law (i.e. law made by the Courts) under the tort of “passing off”, or statutory rights under the Competition and Consumer Act 2010 (Cth) or equivalent State-based legislation.  The issues relating to “passing off” will be addressed in more detail in a subsequent Law Central Bulletin.

However, it can be expensive and time-consuming to commence such actions given you would have to collate and provide evidence to establish the existing goodwill in your business name, products or services.

Gold and Platinum members read on for how a Business Name registration can be overturned.

Summary

It is a common misconception that having a registered business name or domain name will provide a business owner with exclusive ownership of that name.  However, this can only be provided by registering a trade mark with IP Australia.

If you wish to have exclusive rights with regards to your brand, you should seek legal advice on whether you can register a trade mark.  In this regard, please do not hesitate to contact:

Xian-Li Davies
(08) 9218 7700
xdavies@hotchkinhanly.com.au

Related documents:

• Build a Company (ELodgement)
• Confidentiality Agreement
• Family Trust
• Partnership Deed
• Webinar recording - Know thy Business Structures

Disclaimer: The content of this Bulletin is general information only. It is not legal advice. Law Central recommends you seek professional advice before taking any action based on the content of the Bulletin.