Why Business Names and Trademarks Don’t Always Align?

Many business owners find themselves in a perplexing situation where their business name is successfully registered, but their trade mark application is rejected by IP Australia. This can be frustrating, especially after investing significant time and resources into building a brand around that name and the core issue often lies in understanding the difference between registering a business name and a trade mark. Both serve different purposes and offer varying degrees of protection.

The Difference Between Business Names and Trade marks

Business Names:

A business name is simply the name under which you conduct business, and it is used to identify your company to consumers and other businesses. Registering a business name, however, does not grant you exclusive rights to use the name for goods or services in the marketplace. Its major function is to help clients recognize your company, but it does not prevent others from using the same name for various purposes.

Key features of a business name:

1. Business names are registered with the Australian Securities & Investments Commission (ASIC) and such process is relatively easy and inexpensive.

2. Registration with ASIC only prevents others from registering the exact same name as a business name, but does not provide legal protection or exclusive rights.

3. Registering a business name does not stop others from using a similar name in their branding or marketing unless you also secure a trade mark.

Trade marks:

A trade mark, on the other hand, is a sign that distinguishes your products or services from those of other businesses. It grants you legal rights and protection for your brand identity, which includes names, logos, symbols, and other distinguishing characteristics linked with your products or services.

Key features of a trade mark:

1. The primary purpose of a trade mark is to differentiate the goods or services of one business from those of others, thereby preventing consumer confusion and maintaining a unique identity in the marketplace.

2. Trade marks can take various forms, including words, phrases, symbols, sounds, shapes, images, or a combination of these and unlike business names, trade marks offer nationwide exclusive rights to use the mark for the specific classes of goods or services for which they are registered.

3. Trade mark registration involves a detailed examination by IP Australia, and it is more expensive than registering a business name but provides comprehensive protection and exclusive rights.

4. Trade marks provide legal protection nationwide and give you the right to take action against businesses using a similar or confusingly identical mark.

Trade mark Application Rejected After Business Name Registration?

It’s a common misconception that registering a business name gives you the right to use that name as a trade mark. In reality, business name registration and trademark protection are separate processes. Your trade mark application may be rejected for several reasons, even if your business name is registered:

1. Similarity to Existing Trade marks:

One of the most prevalent causes for trade mark rejection is that the proposed trade mark is identical or excessively similar to an already registered trade mark. For example, if you register a business name such as “EcoWonders” but there is already a trade mark for “EcoWonder” by another applicant that covers similar goods or services, IP Australia may issue you an “Adverse Examination Report”.

2. Lack of Distinctiveness:

Trade marks need to be distinctive to qualify for registration. If your business name is generic or descriptive (e.g., “Bread Store” for a bakery), it may not meet IP Australia’s requirements for distinctiveness, even if it is registered as a business name.

3. Misunderstanding of Rights:

It’s possible that business owners are unaware that registering a name with ASIC does not provide them with the sole right to use that name in relation to particular goods or services and it is required to register a trade mark in order to obtain exclusive rights. The ASIC website additionally makes clear that registering a business name does not grant proprietary rights to the name alone.

4. Use of Prohibited Terms:

Laws forbid or restrict the use of specific keywords or phrases. For instance, IP Australia may reject trademarks that use derogatory language or phrases that are misleading or deceptive.

How to Avoid Trade mark Rejection

To avoid having your trade mark application rejected, consider the following steps:

1. Conduct a Thorough Search: .

Before registering a business name or applying for a trade mark, use IP Australia’s Trade mark Checker to search for similar or existing trade marks. This can help you identify potential conflicts early and avoid rejection later.

2. Choose a Distinctive Name:

Opt for a name that is unique and creative. The more distinctive your trade mark is, the higher the likelihood it will be approved. Avoid generic or descriptive names that simply describe the products or services you offer. .

3. Understand the Legal Implications:

Be aware that registering a business name does not provide exclusive rights to use that name in the marketplace and if you intend to build a strong brand identity, applying for a trade mark is essential.

Trademark Renewal and Maintenance

Once your trade mark is registered, it doesn’t mean your work is done. Trade marks need to be renewed every 10 years to maintain their protection. Failure to renew your trade mark can leave your brand vulnerable to infringement or misuse by others.

Common Law Rights and Passing Off

Even if you don’t register your trade mark, you may still have some protection under common law. If you’ve used your brand extensively in the marketplace, you might have established unregistered trade mark rights, which could allow you to take action against others using a similar name. However, common law protection is limited and often more difficult to enforce than a registered trade mark.

Conclusion

Registering a business name and registering a trade mark serve distinct functions and offer varying levels of protection. A company name registration is required to identify your business to customers, whereas a trade mark provides greater protection by granting exclusive rights to use the name or brand for specific goods or services throughout Australia and to ensure comprehensive brand protection, consider registering both your business name with ASIC and your trade mark with IP Australia. Understanding the distinction between these two registrations allows business owners to make informed decisions and avoid potential legal issues in safeguarding their brand.

Why Choose LexGeneris?

At LexGeneris, our patent and trade mark attorneys have backgrounds in engineering, science, and law. We specialize in creating, registering, and protecting intellectual property across various technologies. Our expertise includes comprehensive services surrounding patents, trade marks, and designs. With offices in Perth, Australia, and Bangalore, India, we are well-equipped to meet with clients worldwide.