What is the difference between a Business Name and a Trademark?
Did you know that registering a business name alone does not grant you any exclusive rights of use or ownership?
Our article discusses the difference between a business name and a trademark and explains why registering a trademark for your brand name is crucial to protecting your business identity.
What is a Business Name?
A business name is the name used to identify your business to your customers and other businesses. The law requires you to register your business name on ASIC’s National Business Names Register before you start operating. A business name that is identical or too similar to the registered name of an existing Australian business or company cannot be registered.
A business name is only required if the legal entity that owns a business wants to identify the business with a different name. For example, a company registered as ABC Pty Ltd would not need to register a business name if it operated as ABC, but would need to register a business name if it was trading as ‘Sunny Burgers’.
A business name will necessarily consist of text, such as a word, series of letters, name, number, phrase, etc.
The purpose of registration is to identify the legal entity that owns the business. It does not grant exclusive rights or ownership over your business name.
Registering a business name also does not stop others from using the same or a similar business name without registration.
What is a Trademark?
Rather than identifying your business, a trademark identifies the unique goods and services you offer in the marketplace and distinguishes it from the goods or services offered by other traders.
A trademark can be registered for words, letters, names, numbers and phrases as well as images, shapes, colours, logos, sounds, movements or a combination of these.
Because the purpose of the trademark is to distinguish your goods and services from those of other traders, a trademark must be distinctive. So while your business name can be a simple description of your business (for example: ‘Sydney Burgers’), it would not be registrable as a trademark.
Unlike business names, there is no legal obligation to register a trademark. The process of registering a trademark is administered by IP Australia and involves five stages: filing an application, examination, acceptance, publication, and registration.
Registration provides exclusive rights to use, license, and sell the trademark in the classes of goods and services in which the trademark is registered.
What is the relationship between a Business Name and a Trademark?
Although business name registration is a separate process from trademark registration, it is important to consider how the two might interact when deciding how to secure all aspects of your brand.
Registering your business name as a trademark is a valuable way to help protect your brand. This includes registering both the business name itself as well as any logos displayed in connection with your goods or services incorporating your business name, even where the logo is just a stylised version of your business name.
Trademark registration will ensure you have exclusive rights of use and ownership over both your business name and logos and makes it easier for you to take legal action preventing others from using it.
Because a registered trademark (indicated by the ® symbol) offers exclusive rights over the business name, the name must be distinctive, which means that it should not just be a description of your products or services.
It is also important to search IP Australia’s Australian Trade Mark Search to identify potentially conflicting trademarks before registering your business name. If your business name infringes on somebody else’s registered trademark that was registered before your business began trading, the owner of the registered trademark may be able to demand you cease trading under your business name. This will likely involve significant re-branding costs and loss of goodwill in the marketplace.
A business name and a trademark are both valuable assets that can help build brand recognition and develop the goodwill of your business. However, because registering a business name does not grant you any legal protection, it is important to register this as a trademark to adequately protect your brand from being used by your competitors.
If you are interested in registering your business name as a trademark, please do not hesitate to contact us.