IP – An Important Consideration For All Business Owners
The difference between trade marks, business, company and domain names often causes significant confusion for the public and traders alike. Hicks Oakley Chessell Williams explain these differences and the importance of protecting the most valuable assets of your business.
What is Intellectual Property? In broad terms, intellectual property – commonly referred to as IP – represents the intangible and physical property resulting from creative undertakings. Types of IP include patents, trade marks, designs, confidential information/trade secrets, copyright, circuit layout rights, and plant breeder’s rights. IP rights are very precious assets that can be used to differentiate your business from your competitors, resulting in your products and service being recognisable and appealing to the public.
I’ve registered a business name so I don’t need to register anything else. Right? Not quite. When you select a new name for your business or company or even when you choose a domain name you are in effect creating an identity for your business. It is this identity which differentiates your products and services from other traders. It is fundamental that it is distinctive and that you are aware of the differences between business names, company names, domain names and trade marks.
What are the differences? Business name is the name under which a business operates. Registration identifies the owners of the business. Registration is required if a person or company trades under a name other than their own name. The business name must be registered in every state and territory in which a business operates prior to the commencement of trading. The purpose of registration is for consumer protection and business names do not necessarily provide proprietary rights for the use of the trading name.
Company name is a name given to a corporate entity and must be registered with the Australian Securities and Investment Commission (ASIC). Should the company wish to trade using a different name – as is commonly the case – then that trading name must be registered as a business name. Company names, as with business names, do not necessarily provide proprietary rights for the use of the trading name.
Domain name is the unique address for a location on the internet. A domain name should be easy to remember.
How can I protect my business name, company name and domain name? The best way to protect your business name, company name and domain names are to apply to register them as trade marks. Trade marks are registered in classes depending on the type of goods and services involved.
A trade mark may be a letter, number, word, phrase, sound, smell, shape, logo, picture, aspect of packaging or any combination used to distinguish your goods and/or services from others. Once you register a trade mark in Australia, you have exclusive legal right to use, license or sell it for the goods and services for which it is registered. The law affords certain protection to unregistered trade marks as well. Trade practices and fair trading legislation and the common law protect against unauthorised use of your trade mark. Despite this, it is prudent to register your trade mark to avoid costly and time consuming common law litigation. An invented word may also be easier to register than plain English words.
A word of warning – the story of luckless Bob While one trader may register a word or phrase as a business name, another trader may register the same word or phrase as a trade mark. In this circumstance, the owner of the registered trade mark owner can sue the business name owner for infringing the trade mark if the business name owner uses it on goods or services similar to those covered by the trade mark registration.
Many business operators make this fundamental mistake and register a business name without doing their homework. One such business owner is Bob. Imagine Bob’s despair upon discovering, after investing time and money fitting out his new shop, registering a business name, and advertising, that someone has already registered a trade mark for the same name in a similar industry. The first Bob knew of this was when he received a letter from a lawyer threatening to sue Bob if he did not stop infringing the registered trade mark. He was also asked to account for profits immediately. Bob should have asked his lawyers to:
- Search the business names and company names registers which determine whether the name selected is already being used. It is also sensible to conduct a white and yellow pages search and a search of any industry directories.
- Search the trade marks register and consider applying to register a trade mark. Warning – if your name is identical or similar to a registered trade mark, you could be sued for infringement of that mark. Even if you do not wish to register a trade mark, you should search the trade marks register to make certain you are not infringing someone else’s trade mark.
- Check the domain names registers.IP protection is only necessary for big business and IP rights are too expensive and out of reach for my small business.
Think again. It is a commonly held view amongst the small business community that IP laws work in favour of big business only. IP laws operate to protect businesses equally, regardless of size. Businesses of all sizes can and have used the law to protect their IP from much larger competitors, particularly in the field of trade marks. Expenses involved with IP protection are generally associated with the infringement procedure or the research and development procedures, not in the actual acquisition of IP rights themselves.
Tony Oakley is an Accredited Business Law Specialist with over 35 years experience in corporate practice. Tony has completed the World Intellectual Property Organisation course for Mediation in Intellectual Property Disputes and Intellectual Patent Protection. Call Tony on (03) 9550 4600 or email email@example.com for more information.
Disclaimer: This information is provided as a guide only. A properly qualified professional should always be consulted.