The name under which you trade may be a business name, a trademark or both. So, what are the main differences and what do they mean for your business?
In some ways, a business name and a trademark can be the same thing – simply the name of your business.
However, there are very different registration regimes in Australia for business names and trademarks and it is important that these differences are understood.
Most trading names will need to be registered as business names. The Business Names Act 2011 specifies that a party carrying on a business under a particular name must register that name unless it is the party’s individual name, a registered company name or the full name of a partnership. Failure to register a business name will expose the owner of the business to significant penalties (presently $6300 per offence).
Some examples of where a trading name would need to be registered as a business name are provided below.
- If Sam Taylor is conducting a plumbing business under the name ‘Taylor’s Plumbing Services’, ‘S. Taylor Plumbing’ or ‘Taylor The Plumber’, the name would need to be registered as a business name.
- If the company, Bluesky Advertising Group Pty Ltd, is trading as ‘Bluesky’ or ‘Bluesky Advertising’, this name would need to be registered as a business name.
It is not necessary to register one’s trading name as a trademark and, therefore, trademark registration is optional. Nevertheless, trademark registration has very significant benefits. The main benefit is that registration confers strong, clear, legally enforceable rights (under the Trade Marks Act 1995) which are effective Australia-wide.
These legal rights can be relied upon to stop another person using the same or a similar trademark in relation to any goods or services which are similar to those of interest to the owner of the registration. In fact, the rights provided by a trademark registration function as a deterrent to competitors who might otherwise consider adopting the same or a similar name – so the need to enforce one’s rights does not even arise.
Further differences between business name registrations and trademark registrations are summarised below.
- When registering a trademark, it is necessary to specify the goods and/or services on which the mark will be used. No goods or services are specified when registering a business name.
- The fee for a trademark application will depend upon the number of classes of goods or services included in the application (all goods and services being classified into 45 classes). The fee for a business name application is a single, set fee.
- Trademark registration is generally not allowed for any trade mark which consists of a term which is descriptive of the relevant goods or services or which is a common surname or a geographical name. No such restriction applies to the registration of a business name.
- The term of registration of a business name is 1 year or 3 years (optional). The term of a trademark registration is 10 years.
- Both types of registrations are renewal indefinitely upon payment of the renewal fees.
The name of a business is an important asset of the business and the registration of this name – as a business name or a trademark (or both) – is a very important consideration. These types of registration are very different, having very different purposes and effects. It is important that your name is registered correctly.
Philip Macken, Principal, Brand Haven Legal
