One misconception frequently arises: registering a business name or domain name grants a business owner exclusive ownership of the name, which is not necessarily true in business valuations.
There are essential differences between a business name, a domain name and a trade mark. You should know these differences to determine which best suits your needs.
A business name is a name under which a person or entity trades. Under the Business Names Registration Act 2011 (Cth), all business names must be registered with the Australian Securities & Investments Commission unless an exemption applies. These exceptions include the following:
- The business name is a person’s name (e.g. Fred Smith trading as Fred Smith)
- The business name is a company’s name (e.g. Fred Smith Plumbing Pty Ltd trading as Fred Smith Plumbing).
- The business name is all the partners’ names (e.g. Fred Smith and Joe Brown trading as Smith & Brown).
Under the Act, registering a business name:
- does not stop another person from registering a similar business name;
- does not give you exclusive rights to use all or part of the business name; and
- It will not prevent somebody registering it as a trademark from using the business name.
A domain name is your company’s URL or Internet address.
Like business names, registering a domain name will not give you exclusive rights to use all or part of the domain name as a business name.
Most domain name providers place an obligation on their customers to indemnify them for any loss they suffer as a result of a domain name breaching the intellectual property rights of third parties (e.g. where a trade mark exists that has the same name as your domain name).
Unlike business and domain names, a trade mark confers proprietary ownership rights.
The most common form of a trade mark is a logo, but it can also include words, sounds and smells.
Trademarks are registered with IP Australia. Once registered, a trade mark owner will have the proprietary ownership right to:
- use their trade mark as a brand name for the goods or services specified in the registration;
- authorise other people to use their trade mark for the goods and services specified in the registration; and
- sell or transfer their trade mark to another person.
A trade mark can be unregistered, and the owner can still have some rights in common law (i.e. via the Courts) or some statutory rights under the Competition and Consumer Act. However, it can be expensive and time-consuming to commence such actions, as it can be challenging to establish the amount of goodwill within your business name or brand.
In summary, if you have any doubt about which of the above names you should use or have any questions, don’t hesitate to contact your client manager to discuss.
Kreston Stanley Williamson Team
*Correct as of March 2016
Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.