Trademark vs. Business Name Australia: Understanding the Legal Differences
For many Australian business owners, navigating the world of brand protection can be complex and confusing. One of the most common areas of misunderstanding is the difference between a business name and a trademark in Australia. Although they’re both crucial to building a brand, they serve very different legal and practical purposes. Here, we will examine the differences and help you understand how each can play a role in protecting your brand.
What is a Business Name in Australia?
A business name is the name under which a business operates and is legally required to be registered with the Australian Securities and Investments Commission (ASIC). Registering a business name is straightforward, and it’s a requirement if you’re running a business under a name other than your own. Think of it as a formality that makes your business identifiable to the public and regulatory bodies, but it doesn’t give you exclusive rights to that name.
Business Name Registration: The Basics
When you register a business name in Australia, it’s listed on the public business register so that customers and government bodies can identify your business easily. However, this registration, in and of itself, does not prevent others from using a similar or even the same name elsewhere, especially if they’re in a different state or territory. The registration fee is low, and you’ll need to renew it periodically, but beyond that, it doesn’t offer brand protection. A common misconception is that a registered business name is “protected” from others using it, but this is simply not the case.
There are many instances of Australian businesses excitedly registering their business names thinking they are free to trade under that name, only to have to rebrand later because it turns out that someone already registered the same or a similar name as a trademark.
What is a Trademark in Australia?
A trademark is a legal tool that gives you exclusive rights to use a certain name, logo, slogan, or other branding elements associated with your goods or services. Once you register a trademark with IP Australia, you gain exclusive rights to use that trademark in connection with the goods and services designated by your registration. This means no one else can legally use a substantially identical or deceptively similar mark in Australia.
The Trademark Registration Process
The trademark registration process is more involved than simply registering a business name. You’ll need to make sure your mark is unique and not too descriptive, as it needs to stand out as a brand identifier. The registration process often involves at least a brief trademark search to confirm that no one else holds a similar trademark in your industry, followed by filing a trademark application with IP Australia. A trademarks examiner of IP Australia will then examine your trademark application and may raise objections against your application and you will have opportunities to respond to those objections.
This process may sound intimidating, but the benefits of having an enforceable right are well worth it. Many Australian businesses consider trademarking only when they’re ready to expand or enter a competitive market. But the truth is, the earlier you secure your brand, the better protected you’ll be in the long run.
Key Differences Between a Business Name and a Trademark
Here we will break down some of the main differences so you can get a clearer picture of how a business name and trademark serve different purposes.
Legal Protection
Business Name: Registering a business name is a regulatory requirement, but it does not provide any proprietary rights. You’re simply registering the name under which your business is intended to operate.
Trademark: Registering a trademark gives you enforceable rights and exclusivity in the use of that mark across the goods and/or services in respect of which your trademark is registered. This is critical to protect your brand identity from being misused or diluted by competitors.
Scope of Use
Business Name: A business name is often state-specific and doesn’t prevent others from using a similar name across different states or territories.
Trademark: A registered trademark provides national protection throughout Australia.
Brand Recognition and Value
Business Name: While a business name establishes your identity for customers, it doesn’t provide exclusive branding rights.
Trademark: A trademark is a valuable brand asset. It legally solidifies your brand, adding recognition and market value. You can even license or sell your trademark as an intellectual property asset.
Longevity and Renewal Requirements
Business Name: Business name registrations require regular renewals with ASIC, and your business name may lapse if not maintained.
Trademark: An Australian trademark registration lasts for 10 years at a time with the option for renewal for another ten years. In effect, a trademark registration can last indefinitely (hence the existence of 100+ year old brands).
Why You Should Consider Registering a Trademark in Addition to Your Business Name
Many business owners believe that registering a business name is all they need for brand protection, but that is a risky and incorrect assumption. Securing a trademark early on offers several benefits, including exclusive rights, brand security, and long-term value for your business.
Brand Exclusivity
A trademark gives you the ability to prevent others from using an identical or confusingly similar mark in your area of business. This means that if a competitor tries to enter the market with a similar name or logo, you can enforce your registered trademark rights against them to protect your brand.
Legal Security
A registered trademark can act as a strong deterrent against potential infringement. With a registered trademark, you can take legal action against third parties who try to use your mark (or something like it) without permission. There are countless Australian businesses who regret not trademarking their branding earlier, especially after copycat brands pop up and start siphoning off customers.
Commercial Value
A registered trademark becomes a valuable asset that adds to your business’s overall value. It can be licensed, franchised, or sold, providing additional revenue streams and future flexibility for expansion.
Common Misconceptions About Trademarks and Business Names
There are some common myths about trademarks and business names, and it’s worth clearing up a few here:
Myth: “A Registered Business Name is Sufficient for Protection”
This is one of the most prevalent misconceptions. A business name is an administrative requirement but offers no legal protection or exclusivity for your brand. To protect your name from competitors, a trademark is essential.
Myth: “Trademarks Are Only for Large Companies”
Trademarks are valuable for businesses of all sizes, including small and medium-sized enterprises. Securing your trademark early on can help you establish a strong brand foundation and protect your competitive edge.
Myth: “My Domain Name Provides Trademark Protection”
A domain name registration does not offer trademark protection. While it’s important to secure a domain, it doesn’t prevent others from using a similar name or brand. Only a registered trademark provides exclusive rights to protect your brand.
Case Study: The Risks of Not Registering a Trademark
Here, we will consider a real-life example (with details omitted for privacy) to illustrate the importance of trademarks.
An Australian client started a niche business with a distinctive name and successfully grew her business and brand quite rapidly. However, she had only registered her business name and did not conduct a trademark search or seek to register her trademark. Had she done so, the examination process would have revealed that a competitor had already registered a similar trademark before she started her business.
Not long thereafter, the competitor found out about her business and they sent her a cease and desist letter, asserting that she was infringing their registered trademark. Unfortunately, she had little recourse and had to destroy inventory and rebrand. The lesson was clearly extremely costly. If she had done a trademark search and/or gone through with the trademark registration process, she would have uncovered the competitor’s earlier-registered trademark and thus avoided the pain and cost of rebranding later on when her business was beginning to thrive.
A business name is not a trademark
In Australia, business owners often confuse the terms “business name” and “trademark.” While a business name in Australia can be necessary to operate, it doesn’t provide the brand protection most business owners expect. A registered trademark in Australia, on the other hand, offers that essential exclusivity and enforceable rights that protect your brand identity and add to its value.
For any business owner committed to building a lasting brand, registering a trademark is a worthwhile and relatively low-cost investment. It offers security, market exclusivity, and the potential to build commercial value over time. For more information about trademarks, check out our trademark FAQ.
