An essential part of establishing any business is what brand to use. Consideration should be given to ensuring that that name closely aligns with the desired image or brand that the company wishes to present.

Consider registering trade marks as well as domain names

A common misconception is thinking that registering a website domain gives you exclusive rights to that name. When you register a domain name, you secure an internet address (website URL) for customers to visit. A URL won’t stop others from using your business name or trading in a similar name.

You must register a trademark to obtain proprietary or ownership rights in a company name. Once a trade mark is registered, you can take legal action to prevent any third party from using a name that is substantially identical or deceptively similar to your trade mark.

A trade mark is a distinctive sign or indicator used by an individual, business organisation or other legal entity to uniquely identify the origin or source of its products and services to consumers and to distinguish its products or services from those of other entities. A trade mark typically consists of either a word or a logo. A trade mark is said to operate as a “badge of origin”; that is, a trade mark is something that, to a consumer, indicates who is offering the goods or services.

Be aware of trade mark registration requirements

To obtain a registered trade mark, you must apply for registration with IP Australia (the trade marks office). You must identify the goods or services the mark will refer to in your application. IP Australia examines the trade mark to ensure it is eligible for registration. The two main criteria upon which they examine a trade mark are whether it is inherently “distinctive” and substantially identical or deceptively similar to an earlier filed trade mark.

Broadly speaking, IP Australia will reject a trade mark application because it is not distinctive. A mark is not distinctive where it is so common that other people would want to use the words to describe their own goods in the ordinary course of trade such that it would be unfair to allow only one person to have a monopoly right to that word. For example, an application to register the word “Apple” in respect of fruit (and, as a consequence, deny other persons who sell fruit the right to use the word “apple” in connection with their goods) would be considered not “distinctive” and hence ineligible for registration.

By contrast, there is a valid trade mark registration for the word “Apple” regarding computers. In that case, the trade mark office held the mark to be distinctive – no computer seller would reasonably need to use the word “Apple” to describe their product. The distinctiveness of the mark depends upon the types of goods/services you intend to offer. Additionally, IP Australia will reject a trade mark application if it considers that a mark is “substantially identical” or “deceptively similar” to another mark already registered. A trade mark is generally considered deceptively similar to another mark if, upon comparing the two marks, a person would be “caused to wonder” if the two marks belong to the same source.

Remember the difference between trade marks and company names

The critical aspect to remember is that a party that registers a company name does not own that name. Neither ASIC nor the Domain name registrants examine an application for a company name or domain name to see if any other entity has a prior reputation in the name. They do not ensure that no trade marks are registered that might conflict with the company name or brand being sought.

It is possible (and in fact, happens quite often) that one entity will own a trade mark in a particular name and another entity will have a company name registration for the same name. As discussed above, the entity which owns the trade mark has a legally enforceable right to use the name and, more importantly, generally has a legally enforceable right to stop the entity with the company registration from trading under that name.

Obtain advice from an expert

Before deciding upon a brand name, we recommended that you should engage with us to conduct thorough searches to determine the following:

• whether the trade mark applied for is substantially identical or deceptively similar to a registered or pending trade mark; and
• whether the proposed mark is substantially identical or deceptively similar to any unregistered marks.

If the proposed brand is too similar, it is possible that the use of the proposed mark would infringe on other marks; and that upon application, the existence of such trade marks would constitute grounds for objection by IP Australia. You may also be exposed to a passing-off action or an action for misleading or deceptive conduct under the ACL if you cut it too close to an existing brand.