Why relying solely on business or company names for protection is a ticking time bomb

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So you think that simply having a business name or company name means your brand name is protected? Think again…

A recurring issue in the area of trademarks is the wrong assumption that simply registering your business name, or having a company name, will give you rights over that name. Time and time again clients have come to us to finally register a trade mark that they have been using for many years, only to find that someone else has gotten in first.

The reality is that if someone else has already registered a trade mark similar to yours, for the similar sorts of goods/services you deal in, one of 3 things will happen:

1. You may be prevented from registering your mark, therefore leaving you with a company name or brand name that can’t be protected
2. You may have to go through a difficult process of proving that you had used the mark first, or for a sufficient period of time
3. You may have to try to negotiate a deal with your competitor so that they will allow you to keep using your name

Simply having a business name, company name or domain name registration is not enough.

What are the benefits of trademark registration?
    • Protection from competitors using your name.

When you have a trademark registration, it is far easier and cheaper to stop other people using that name. If you don’t have a registration, you first have to prove your rights to that name, which can be a difficult and expensive process.

    • Protecting your business from being accused of infringing another company’s mark.

When you have a trademark registration, you have written proof of your registered rights in a name, and this alone is quite often enough to stop any issues before they start.

    • “Insurance” for your marketing spend.

If you are spending money on marketing your company, you are essentially creating market recognition of that name. It is important then that you have taken the small steps needed to protect that name from others in the marketplace using it to their advantage

    • Recording your asset in the balance sheet.

Your name/trademark is generally so closely attached to the goodwill of the business, that in fact it is quite often one of the most valuable assets that your business has. By registering your trademark you are creating it as a separate asset that can be reflected in the accounts of the company. Which is great news if you are looking to sell or get finance.

    • Open your business up to the opportunities of licensing.

Once your trademark is registered, many new doors are open in relation to how you can now deal with your mark. You can licence it to others and make licence fees/royalties, you can hold it separately in an asset holding entity, you can do many other great things.

But really, the simple things are often the best, and the best thing that a trademark registration brings is peace of mind that you have protected that important business asset.

Timing

The earlier you get your trademark registration, the better. Trademark registrations are awarded on a first come, first served basis. And once your competitor has a trademark registration that they shouldn’t have had, it’s a tough job to get it off them. In fact, the only way to strip them of that ownership is to take your matter to the Federal Court, which is likely to cost somewhere near 6 figures, if not more.

Costs

Trademark registrations on the other hand are surprisingly inexpensive – particularly in comparison to the peace of mind that they provide. In fact, many businesses’ trademark costs are less than the cost of insurance for their company car (albeit trademark registrations last for 10 years, and then can be renewed indefinitely – car insurance needs to be paid of course every year!). Most of us don’t think twice about insuring our car every year, yet many business owners just don’t take the same caution with their brand and goodwill. Sobering thought isn’t it!
Perhaps the real question for businesses considering trademark protection is not whether they should register their brand, but can they afford not to…

Trademark protection services

If you would like advice about registering your trademark, send us an email enquiry to trademarks@aspectlegal.com.au and we will organise a time to talk with you about your mark to answer all of the questions you might have.

Want to know more about the process?

Check out our “Trademarks 101” podcast to get a quick overview of the basics trademark protection, and how it works: https://www.aspectlegal.com.au/ep-005-trademarks-101-basics/

Aspect Legal Director Joanna Oakey image

Aspect Legal is an innovative, proactive and value-driven legal practice, that specialises in helping businesses grow while protecting them from the storms of business.

Check out our two podcasts, that are now among the top legal podcasts in Australia – Talking Law where we cover the top legal issues of the moment, that business owners need to be across, and The Deal Room – where we talk about everything related to business mergers and acquisitions!”

 

Disclaimer: Chan & Naylor take no responsibility for the accuracy of any research material of contributors to our newsletter. Contributions to our newsletter like this article, “Why relying solely on business or company names for protection is a ticking time bomb”, are meant to be educational only and Chan & Naylor does not endorse any promotional material promoted in their articles. Readers should do their own research to determine the accuracy of their material.

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