When starting a new business, one of the most important things to do is tradebmark your business name.
That might sound like an exaggeration – but it’s not.
Imagine this conversation – a customer rings you and says: “Funny story, I was Googling your business, and found this other business. You’ve got basically the same business name! I even called them, thinking they were you.”
So, what can you do if you find a copycat business which is benefiting from your goodwill? Well, that depends on whether you have a trade mark.
It’s a relatively simple and inexpensive step that will save you money, time, and tears in the long run, as well add value to your business.
In this article, we’ll be answering four questions.
- What is a trademark?
- How can a trade mark improve your business’ value and security?
- Why do you need to register a business name AND a trade mark?
- How do you register a trade mark?
After reading this we hope that you register your business name as a trade mark (or feel a nice smug feeling if you’ve already done this).
1. What is a trademark™ ?
A trade mark is a legal right to use a certain name or logo within a specific industry (though you can also trade mark colours, smells and sounds).
For example, “McDonalds” is a registered trade mark, as is the “Double Arches” logo.
Trade marks need to be registered to enforce them. IP Australia is the government agency which reviews trade mark applications and regulates registration.
2. How can a trade mark improve your business’ value and security?
Enforcement against copycats
First, having a registered trade mark gives you enforcement powers to stop copycats from using your trade mark and taking advantage of your hard work and reputation.
For example:
- You can legally stop other businesses from using similar business names within your industry – whether or not they knew your trade mark existed. If they’ve already started trading, you can force them to rebrand so that they are no longer similar to you.
- If another business has used your trade mark (or a similar one) without your permission, you can legally sue them and recover the profits they’ve made from this unauthorised use.
Trademarks are an asset
Second, trade marks are verifiable (and often valuable) assets that give you more commercial opportunities.
For example:
- You can use the trade mark, with security that no one else can use the same one.
- You can sell the trade mark at the same time you sell your business – which can often increase the business’ attractiveness and value for the buyer.
- You can license the use of your trade mark for a fee.
3. Why do you need to register a business name AND a trademark?
Business names and trademarks are totally different things.
All businesses need to set up a business name with the Australian Securities and Investments Commission (or ASIC).
ASIC now offers online registration, and once you’re done, you’ll be allowed to trade under your new business name.
Setting up a business name does not automatically give you a trade mark, and does not give you the amazing rights that come with a trademark.
It also doesn’t stop other traders from applying for a similar trade mark, before you.
How trademarks save you time, money and tears
If a copycat business is using your business name, it will be much easier to enforce your rights against them if you have a registered trademark.
If you have a trademark, you can email the other business with a copy of your trade mark registration, asking them to stop infringing your trademark and rebrand.
If you don’t have a trademark, and especially if the competitor has been using the similar business name for a while, then the process can be excruciating and expensive.
- You’ll need immediate legal advice – you’re relying on complicated and uncertain legal concepts so will require advice.
- You’ll need to lodge an urgent trade mark application for your business name.
- If the other business has already applied for (or registered) a trademark before you, it is both expensive, uncertain (and sometimes impossible) to remove that application.
- This is more likely to resolve in a dispute with the other party. They may also want a payment to cover the costs to rebrand.
- If the dispute escalates (and after more letters, threats and tears)
a. you might give up, and let the other business use your valuable business name;
b. the other business might give up, and rebrand;
c. you might agree on a payment to make the other business rebrand; or
d.you might go to court, which will incur additional cost, and either win, lose or compromise.
As you see above, many businesses only realise the value of having a trade mark when it’s too late.
4. How do you register a trade mark?
Trade marks registrations are managed through IP Australia, which has an online and user-friendly application process. You’ll also need to pay IP Australia’s processing fee, which is currently between $250 to $400 per “class” selected (depending on what classes you choose and how quickly you want IP Australia to review your application).
What if you want further assistance?
We suggest engaging a lawyer to submit an application for a few reasons:
- A lawyer can give you advice on whether there are already similar trade marks registered, and your chances of the application being approved.
- When making your application, you’ll need to choose one or more “classes” (or industries) of goods and services for your trade mark. There are 45 main classes to choose from – and each one has thousands of sub-classes. A lawyer can help you maximise your protection by selecting the most appropriate “classes” for your trade mark.
- A lawyer can help you manage and understand the trade mark application process – which takes a minimum of 7.5 months and involves correspondence from IP Australia.
The Legalite team has extensive trademark experience and would be more than happy to assist. You can book in a free discovery call here.