I was flicking through the TV stations on Sunday night and stopped on “Shark Tank” just as the contestant arrived on stage to try to sell her business idea to the investors. When asked if she had a trade mark registration and was told that a registration was pending for a similar name we saw a look of confusion. This morphed into worry when she was told that a business name was not the same as a trade mark,  that she may lose her name and may even be sued. Unfortunately, I have seen this before.

Only a trade mark gives ownership

Too many business owners; start -ups and established businesses, do not fully understand the differences between a trade mark and a business or company name. The consequences of this confusion can be very serious.

Generally speaking, if another person owns a trade mark registered for goods or services that are the same or similar to your business name, company name or unregistered trade mark that person can stop you using your name or unregistered trade mark. This can mean:

• having to rebrand, probably withdrawing product to do so;
• changing your advertising, packaging, labels, website;
• registering a new business name; and
• starting again to build a reputation in your new name.

At worst, the registered trade mark owner can sue you for the damages they have suffered from your use of a similar name or for the profits you made from trading under the name.

“But I have a registered business name”

The function of a business name is not to give the owner rights to a name, but is a legal requirement to enable consumers to know who they are dealing with.

To rely on a business name to give your business any degree of exclusivity over its brand requires you to be able to prove that when consumers see or hear your name or unregistered trade mark they associate it with your business or products. You will also has to prove that the other name is, or is likely to be confused with your business name and that because of these factors you will suffer damage to the business. This is a very expensive exercise. Any rights you acquire will be limited to where you can prove a reputation.

A trade mark registration, on the other hand, gives the owner the right to take action anywhere in Australia against someone using the same or a deceptively similar trade mark or name in relation to the same or similar goods or services,  without the need to prove a reputation.

The first steps to choosing a brand or name

One of the first things a new business, or one that is adding new products, must do when deciding on a name for the business, company or products is to make sure that the name is available. This means as a legal name AND as a trade mark. This should be done before going too far down the brand development and marketing pathways.

The second step is to register the name as a trade mark so that YOU own it, can use it anywhere in Australia (or overseas if you register it there) and can stop other businesses taking advantage of your goodwill and reputation and from using a similar name and causing confusion in the marketplace.

It’s hard enough choosing a name in the first place without having to do so under pressure and hurriedly because your product is waiting on a new name before it can be offered for sale.