Our startup lawyers have assisted countless startups in setting up their business. An important consideration early on is your business name, however there is a lot of overlap between the various registrations available to businesses. Between business names, company names, trading names and trademarks, it isn’t always clear what steps you should be taking. In particular, its not always clear what protections are available for your business name. Our startup lawyers have simplified it for you in this article.
What’s the difference?
Business names, company names and trading names serve different purposes to trademarks, but only trademarks provide exclusive ownership of the name:
| Concept | Application | Exclusive Ownership? |
| Business Name | Used to register the name of any type of business, such as companies, partnerships, sole traders and trusts, on the ASIC business name register. The ASIC business name register exists to enable consumers to properly identify businesses. It prevents entering the market anonymously. |
No. |
| Company Name | The name given to a company when it is incorporated through ASIC. A company is a distinct type of business structure. A company is considered a person at law, and it requires a name and ACN to operate. A company’s name is also its business name, unless the company registers a separate business name. |
No. Company names and business names are treated equally in terms of ownership rights. |
| Trading Name | If a company registers a business name that is different to its company name, this name will be referred to as its trading name. | No. |
| Trademark | A trademark is a mark that is owned by an entity for specific purposes. If you register a trademark, you can prevent other entities from using the same or a similar trademark. | Yes. Only trademarks provide exclusive ownership rights over a business name. |
What’s the Point?
Contrary to common belief, registering a business name doesn’t provide legal protection for the name. In fact, just registering a business name does nothing to stop a competitor using the same name in their own branding and marketing. The same can be said for your company name. As set out in the table above, the purpose of these names is to identify the business or company, not protect it.
Trademarks, on the other hand, provide exclusive ownership of that trademark, and that ownership is protected by legislation. If you trademark your business name, you can prevent another entity from using that name, and this protection is automatic: once it is trademarked, you don’t need to demonstrate anything else to stop other entities from it.
In contrast, if you don’t have a trademark registered, and a competitor is going to market with a same or similar name as your business, to stop them you will need to prove that they are “passing off” as your business. Passing off is a common law protection. This means that, unlike trademarks, it does not come from legislation but from case law. To prove passing off, you need to demonstrate to a court that the following applies:
- Goodwill – your business name has a reputation in your market, and that that reputation is linked to your product or service.
- Misrepresentation – by using a same or similar name as your business, the other business has misled customers into thinking it is related to you.
- Damage or potential damage – your business has suffered actual losses, or is likely to suffer actual losses, as a result of the above two limbs.
Proving the above can be difficult, and certainly more difficult than relying on trademark protections.
Priority of Registration
Not only do trademarks provide better protections than business names, a trademark will trump a registered business name regardless of when they were registered. This means that if you register a business name today, and someone else trademarks the exact same name in a year, they can stop you from using your business name. While this may seem unfair, its important to remember the purpose of business names and trademarks. Business names exist to identify businesses. This is to protect the consumer, not the business, and therefore a business name does not create any intellectual property rights for the business. Trademarks exist specifically to protect ownership of intellectual property, and therefore you can enforce exclusive ownership of that name or mark.
Need Help?
If you are setting up a business with a unique name, you should consider trademarking it as soon as possible. The trademark registration process can take 6 months or longer, but having a commercial lawyer on your side will make the process easier. You can contact one of our startup lawyers on 03 8691 3111 or send us an email at hello@alliedlegal.com.au.
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