Important considerations when choosing a name for your business

When it comes to choosing the name of your business, there are various key legal factors that you should consider. Existing registered and unregistered rights may already exist in similar names.

The mere registration of a business or company name with the Australian Securities & Investments Commission (ASIC) does not avoid any of the following issues, and you should consider these key points before registration of any business, company, or domain name:

1. Existing registered trade marks under the Trade Marks Act 1995 (Cth)

A trade mark is, in summary, a sign (e.g. a letter, word, name, number, brand, logo, aspect of packaging, shape, colour, sound or scent) that is used to distinguish the goods or services of a trader from those of others.

Words that describe the goods or services (e.g. lawyers in relation to a law firm) are difficult to protect because they are words which various traders in the ordinary course of their business would use in connection with their goods or services. As such they are not therefore distinctive. Make sure your name / sign is distinctive if you want more protection.

Trade marks can be registered with the Australian Trade Marks Office (ATMO). Registration of the trade mark gives the trader a monopoly right over that trade mark in relation to the goods or services, or similar goods or services, in respect of which the trade mark is registered. Importantly, this protection extends to trade marks which are substantially identical or deceptively similar to the registered trade mark. Therefore, if your chosen name / logo / sign is substantially identical or deceptively similar to an existing trade mark, and you use your sign in relation to the same or similar goods or services, you run the risk of infringement and a claim for damages (unless a defence applies).

A search of the Australian Trade Marks Office Online Search System should be conducted by a professional.

2. Passing off

In addition, even if a trade mark has not been registered with the ATMO, business reputation is protected under the common law tort of passing off.

Passing off involves the misappropriation by deception of a trader’s reputation and goodwill. Any deceptive conduct (for example a representation or name that falsely suggests some connection with another person’s product or business) where there is at least the threat of damage to a trader’s reputation and goodwill could constitute passing off. A trader’s reputation may attach to various means by which the public recognise their product or services from those of others such as their name, get-up / packaging, colour schemes, etc. You may be required to account for your profits in an action for passing off.

Again, words that describe the product or service or other indicia such as packaging which are purely functional are much harder to protect.

You should conduct a search of the marketplace to ascertain whether any existing businesses have reputation in your proposed name or sign.

3. Misleading and deceptive conduct under the Australian Consumer Law

The Australian Consumer Law is found in Schedule 2 of the Competition and Consumer Act 2010 (Cth). Most relevantly, a person (which includes a corporation) must not engage in conduct that is misleading or deceptive or which is likely to mislead or deceive.

Once you have decided upon a name that is available and which will not offend any of the above principles, you should register it as a trade mark with the ATMO in respect of your goods and services and also with ASIC without delay.

Contact our Sydney business lawyers for assistance in relation to the above.  Our commercial lawyers, business lawyers, and disputes lawyers provide expertise in corporate and commercial advisory services as well as litigation and dispute resolution.  Take a look also at a sample selection of our more basic fixed fee legal services.

The information provided in this article is provided by way of general information only. It does not constitute legal advice, and should not be relied upon as such. Specific independent legal advice should be obtained before deciding to act, or not to act, upon the views expressed or information contained in this article.

Copyright of Heathfield Grosvenor 2016. All rights reserved.

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