If you have established a start-up then no doubt you put a lot of thought into your business’s name. Equally, if you purchased a business from someone else then you probably paid good money for rights to use the business name. You don’t want to let anybody free ride off your creativity, or dilute the value of the intellectual property that you have paid for.
This article will give a brief rundown of the ways in which you can protect your business name. First, we’ll take a look at how you can be pro-active in protecting your business name. We’ll also give you some tips on choosing a business name that will not land you in hot water with another trader.
What protection is available for a business name?
Registration under the Companies Act 1993 affords limited protection of your business name, although the registrar will refuse registration of a name that is identical or almost identical or another company name. You may also want to use a different type of business structure.
The best protection for your business name is a registered trade mark. There are two main types of trade mark, being word marks and device marks (logos). If your business has a logo then you would certainly consider trademarking that. However, to prevent someone else copying your business name, then you really need to register the name itself as a word mark. A trade mark registration enables the holder of the trademark to take action against someone using an identical or similar name in relation to the same or similar industry.
However, it’s important to be aware that not all business names will be registrable under the Trademarks Act 2002. You will not be able to register a trademark that is the same or similar as another registered trademark in relation to the same class of goods and services.
But probably a lesser known fact is the requirement for distinctiveness. Broadly speaking, this requirement prohibits registration of business names that are too descriptive of the goods or services being offered by that business. For example, if you are starting a car hire company in Invercargill, you may think it is a good idea to call your company “Invercargill Car Hire” so that your company will be the first that customers searching for a car to hire in Invercargill come across. However, you may well find that such a trademark is unregisterable. So this is an important consideration in choosing a business name in the first place. Choose a unique, distinctive name.
The Copyright Act 1994 affords protection to artistic works. Normally, this won’t include your business name but will cover any original artwork used in your business logo, if you have one. The protection afforded by the Act is automatic, meaning you don’t need to register your logo anywhere. It can be helpful to use the © symbol to show that you are claiming copyright in the work, but this is not essential.
The Fair Trading Act 1986, which prohibits misleading and deceptive conduct in trade, can also afford some protection to your business name. If a trade competitor is using the same or similar name for their business and customers are at risk of being misled, that competitor may well be in breach of the Act. Again, it is important to bear in mind that the law affords less protection to descriptive names, because doing so would essentially grant one trader an unfair monopoly on these words. This highlights the importance of choosing a unique name for your business.
You may also have heard of “passing off”. This cause of action prevents someone from freeriding on the goodwill of another business, generally by representing in some way that their goods and services are those of another trader. Obvious examples are attempts to copy the packaging of another brand. Because passing off is a little more difficult to prove (you must show that you have suffered a loss as a result of the other trader’s conduct) it is not relied on as often as the Fair Trading Act. However, it can still offer a remedy in many cases.
What steps should I take when choosing a business name?
Now, let’s look at the other side of the coin. Naturally you don’t want to find yourself in the position where you have put a lot of time and effort in coming up with a brand for your start-up, only to receive a threatening letter a few months after you are up and running demanding that you “cease and desist” infringing someone else’s intellectual property. Not only could you be forced to stop using your business name but you could also be liable for damages or to account to the other party for profits you have made as a result of using their business name or a name that is too similar.
There are some steps you can, and should, take when selecting a business name.
First, you should check the companies office to see if there are any companies (or other registered entities) with a similar business name. But be careful, just because registration of your company name is granted does not mean that it does not infringe another trader’s intellectual property. The Registrar does not consider whether a name could breach any other enactments such as the Trade Marks Act or the Fair Trading Act. There are also many other business structures which you won’t find on the companies office. And, a business might have a different trading name to its company name.
You should also search IPONZ’s trademark register and carry out some general internet searches to see if your proposed name is already in use. Remember, just because someone else is using that name does not always mean that you cannot. It will depend on a number of factors, including the type of goods and services being offered by that business. For example, the brand “Dove” is used by different companies for cosmetics and confectionary. For overseas brands, it will depend whether the mark is registered in New Zealand, or if it is a “well-known” mark.
If your searches do reveal a name that is the same or similar to your business name, we recommend seeking legal advice from a lawyer or patent attorney about whether you should go ahead and use the name.
Of course, if it is too late and you have already received the threatening letter, we suggest you consult your lawyer straight away for advice on how to respond. Sometimes, big brands use bullying tactics in circumstances where your use of the name may not actually be in breach of the law and you may have a defence to their claim.
AWS Legal has considerable experience in advising in such matters. We can also assist with registering your trademark, including providing advice if your application has been refused or if someone else has opposed registration of your trademark.