Often business owners are dealing with problems that they perceive to be important and urgent. They are trying to get a commercial deal done with a third party, they are acquiring a new business, or they are dealing with internal employment matters.
Seemingly smaller but potentially more critical issues can get swept under the rug until the business owner has the time or patience to deal with them. Securing business and domain names often falls into the ‘too hard’ category.
The case study below may help to explain how this could play out for an unsuspecting business owner that thinks they’ve dotted all their i’s and crossed their t’s.
Case study
You are a thriving and well-known small family-owned business in your local area. One day you notice that another business that operates in the same industry as you, is opening just down the road – they’ll be a direct competitor to you.
The new competing business has chosen a business name that is almost identical to yours. The new business has sent out new advertising and promotional material and their domain name is almost identical to yours too. Existing customers are complaining of trying to contact you and finding the wrong contact details online. You can only imagine how much new business is getting diverted away from your front door.
You immediately contact your solicitor who informs you that your competitor has successfully registered its business name with ASIC. You are assured that your business name is also registered, but unfortunately this hasn’t been enough to stop the competing business from opening with an almost identical trading name to yours. To do that you needed to protect your business name as a trademark and register your domain name.
You vaguely remember your solicitor recommending trademarks and domain name registration, but you were too busy at the time to think about it. You thought that having the business name registered with ASIC was sufficient anyway. You’ve been in business for years and the name has always been the same. Just ask any of your customers! Isn’t that enough?
When you ask your solicitor what your options are, it’s not looking good. You can write to the other business, to see if they are willing to transfer the trademark for the business name and domain name over to you. Your solicitor warns you there will probably be a sum of money you have to pay to the other business to make the change – even if they are willing to entertain your request.
If that fails, you’ll be forced to battle it out in Court where you will have to make a case for prior use and establish a ‘passing off’ claim. Essentially, you will have to show that the new competing business is benefiting from the branding and reputation of your business. Of course, this is an expensive and time-consuming process.
It’s more common than you think
You are probably feeling relieved if you have not found yourself in this situation. Many business owners underestimate the value attached to their business and domain names until it is far too late. Unfortunately, the example above is based on a real-life scenario, where we acted for a client whose established business was adversely affected by a new competitor with an almost identical business name.
So, what can you do to protect your business and domain names? Below we summarise our top tips to keep you in control of your business and domain names.
1. Register your business name with ASIC
When you start a business in Australia, unless you are trading under your own name, you are required to register your business name (the name you ‘trade’ under) with ASIC. This is so third parties (customers and other businesses) know who they are dealing with.
Simply registering a business name does not give you exclusive ownership rights to that name. Someone who has registered the name as a trademark will also be able to use it – so make sure that someone is you.
2. Learn what a trademark is – and then register one
A trademark can be a logo, image, word, phrase, letter, sound, movement, shape or scent that distinguishes your business from other the providers of products and services in a particular market. Trademarks are essential to protect your business name and activities because registering a trademark for your business name with IP Australia grants you the exclusive right to your business name in Australia for an initial period of 10 years.
This means you can prevent others from using your business name and take legal action against anyone who does. In the scenario above, if the business owners had registered a trademark for their business name that would have been enough to put a stop to the competing business with an almost identical name down the road.
By registering a trademark you protect your brand, a valuable asset of your business. If you one day wish to sell your business and you have not protected your brand by registering a trademark you really don’t have anything to sell.
3. Don’t rely on reputation or use
Registering a trademark is the gold standard to prevent others from exploiting your business name. However, in some circumstances, you may also be able to rely upon a common law (or ‘unregistered’) trademark. This is what the business owners in the example above had to try to rely upon.
A common law trademark exists where an unregistered trade mark (such as a business name) has been used for a sufficiently long period of time to develop a substantial reputation for the person using the name – so they have become linked in the minds of consumers.
Unfortunately, the process of proving and relying upon a common law trademark can be costly and time consuming. Instead of being able to rely on the registration of your trademark with IP Australia, you will find yourself engaging a solicitor to make legal arguments about prior use, ‘passing off’ and to substantiate your loss. This is a much more difficult way to go about protecting the blood sweat and tears you put in to building up the value of your business name.
Common law trademarks don’t get the automatic protection that a registered trademark affords in this situation – so don’t miss out on your chance to come out on top. Register a trademark, even if you believe that you may have a common law trademark.
4. Protect your domain name
A website is a ‘must-have’ for most businesses these days so registering a domain name or internet address for your business is a no-brainer.
There are a number of different domain name providers. In Australia, the Australian Domain Name Authority (auDa) facilitates the registration of a domain name.
A domain name helps people find you on the internet and gives the owner exclusive right to direct visitors to their website. In addition to registering a business name and a trademark, you should also ensure your domain name is registered in the name of your business and you stay on top of renewal dates and fees to avoid losing your domain name to someone else.
With more and more business these days being generated through the internet and web searches and the prevalence of social media, targeted advertising and SEO (search engine optimisation), failing to register a domain name (or keep the domain name registered) can be a fatal error for a business owner. Unscrupulous individuals have been known to swoop on popular domain names upon their expiry and charge exorbitant fees to have the names released. Don’t let yourself fall prey to one of these traps.
If someone has licensed a domain name the same or similar to your trademark, you need to lodge a complaint with auDa.
Key takeaways
History and reputation will not be enough to save you when a competitor opens down the road with a scarily similar business or domain name to you. This will be the case no matter how loyal your customers are, or how long you have been in business.
Keep in mind that registering a domain name is no substitute for a registered business name and trademark and vice-versa - having a trademark application or registration does not automatically entitle you to a particular domain name.
To ensure that what is rightfully yours remains in your control take these positive steps and give yourself some peace of mind:
- Register your business name with ASIC;
- Register your trademark with IP Australia;
- Register your domain name with auDa; and
- Listen to your advisor when they recommend these registrations!
Make sure you protect your business with registered trademarks and domain names.
