New rules for determining availability of a business name

Registration of a company or business name satisfies the legal obligations of carrying on business under that name. On the other hand, a trade mark is a “brand”, and registration of a trade mark provides strong, enforceable rights.

Registration of a business name is managed under the Business Names Registration Act 2011. The rules for determining whether a business name is available were amended on 20 July 2015 by the Business Names Registration (Availability of Names) Determination 2015 (2015 Determination), which sets out the criteria for assessing whether the business name sought to be registered:

• is the same as a prior registration
• is undesirable, or
• contains restricted words or expressions.

This amendment adds to the list of words and expressions which are considered equivalent or the same, for the purpose of assessing business name availability. It takes into account common business usage of certain words and terms when vetting new business name applications, the aim being to protect existing businesses against imitation.

Criteria to assess if names are the same or similar

Disregarded matters

The following matters are disregarded when assessing if a proposed business name is the same or similar to a prior registered name:

1. the use of the definite or indefinite article (a, an, the ) unless it is the whole name
2. the use of ‘Association’, ‘Co-operative’, ‘Incorporated’, ‘Limited’, ‘Ltd’, ‘No Liability’, ‘NL’, ‘Proprietary’ or ‘Pty’ in one or both names
3. whether a word is in the plural or singular number in one or both names
4. the size of characters, and the type and case of letters, any accents, spaces between characters and punctuation marks, used in one or both names
5. the order of words in the names (word is defined as a character, or group of characters separated by spaces, an abbreviation or an acronym, for example XYZ123 and XYZ 123 are words), and
6. whether one or both names includes a host name such as ‘www’ or a domain extension such as ‘net’, ‘org’ or ‘com’.

Relevant matters

The following matters are relevant when assessing if a proposed business name is the same or similar to a prior registered name:

1. a word or expression in Schedule 1 as updated by the 2015 Determination. This schedule lists those words which are taken to be the same as each other word or expression in the item, and examples of these are given below
2. a business name is identical or nearly identical to another name if, despite the characters used in the name, it may be pronounced the same as the other name, for example:

• Creative@Work is the same as Kre8tive at Work
• 100% Cats is the same as 100 percent Kats, and
• Dollar Shop is the same as $ Shop.

As may be seen from the examples of words or expressions taken to be the same in Schedule 1, many of these are obvious, such as:

• accom, accommodation, holiday accommodation
• B&B, bed and breakfast, or
• Australian, Australia, Aussie, Aus, and Aust.

However some variants taken to be the same despite phonetic and visual differences and differences in meaning, are more surprising, for example:

• body care, skincare, skin therapy
• art, art gallery, artworks, fine art, gallery, art centre, art service, art solution
• ceramics, ceramic tiling, tiles, tiling, tiling services, tiling solution
• farm, farming, farm services
• holidays, travels, trips, travel service, travel centre, and
• film productions, films, pictures.

Restricted words and expressions

The inclusion of certain words and expressions in business names are restricted as a matter of public policy, to prevent the public being misled into believing they are dealing with a certain type of organisation such as an incorporated company, or a charitable, not for profit or consumer advocacy organisation. Examples include:

• charity
• co-operative
• executor
• fiduciary
• Aboriginal Council
• no liability, and
• trustee.

Restricted words and expressions unless Ministerial or other consent is given

There are other words which may be used as names, but only if permission is given by the appropriate minister or APRA (Australia Prudential Regulation Authority) for example:

• ANZAC
• Red Cross
• university
• bank, and
• credit union.

Requirements for business name registration

Where a business name application meets the necessary formalities – the registering entity has an ABN, the fee is paid, the name is available and the entity is not disqualified, a business name can be registered within a day. The regulatory burden is minimal and the process is quick; a good outcome for business owners.

Trade mark or business name?

Selection and registration of a company name or business name is often the first step in the start-up phase for businesses. Whilst this step is necessary, it is critical to recognize that a company or business name registration does not protect that name or provide rights in the name.

It is a common misconception that business and company names are “the same thing” as trade marks. They are quite different. Registration of a company or business name satisfies the legal obligations of carrying on business under that name. On the other hand, a trade mark is a “brand”, and registration of a trade mark provides strong, enforceable rights.

It is not uncommon that the same name will be both a trade mark and a business name and it is necessary to ensure the availability of the name for use and registration both as a business name and a trade mark. So while it remains very important to perform an ASIC business name clearance search, a search of the trade marks register is also important as a clear search provides assurance that use of the name will not infringe pre-existing rights of another trader.

If registrable, there are many reasons to seek protection of the name as a trade mark:

• a trade mark application reserves the mark while setting up the business or preparing for product launch
• trade mark registration gives exclusive right to use the trade mark throughout Australia and stops others from using it or a similar trade mark in the same field of business
• it is an easily enforceable right against misuse by competitors, and
• a trade mark registration is an asset and property right which may be licensed or sold.

For assistance in choosing, clearing and registering business names and trade marks, it is a good idea to give a trade marks attorney a call; we would be happy to discuss your options with you.