Business owner locks horns with ASIC over calling his cafe Eggslut
Tuesday, September 18, 2018/
A Brisbane business owner will display the term Eggslut across the shop front of his new cafe, despite failing to get the term approved as his official business name.
Operator Peter Costa, who answers the phone as “Peter from Eggslut”, has big plans to carve out a niche in Queensland’s cafe market with an egg-focused business.
He says he came up with the idea after seeing a gap in the market for high-quality egg dishes in cafes and hopes to make a go of things with an attention-grabbing title.
But the budding shop owner has locked horns with ASIC over the proposed name, resulting in an extraordinary case before the Administrative Appeals Tribunal (AAT) last month.
While ASIC argued the name would likely offend members of the public, Costa maintains the term ‘slut’ does not necessarily have a sexual meaning. The Macquarie Dictionary defines the term as “a person who is indiscriminate and voracious in their consumption of a specified commodity”, so Costa suggests Eggslut refers to a voracious consumption of eggs.
The name was designed as a play on words for Lutwyche, the suburb in Brisbane the cafe is based in, as in ‘egg Lutwyche’.
Unfortunately for Costa, AAT deputy president Bernard J McCabe upheld ASIC’s decision, denying him access to Eggslut as an official business name.
But, undeterred by what he described as an “incredibly disappointing” decision, Costa says he will use the name when marketing and branding his business anyway.
“We’re reliably informed there’s nothing stopping us from trading,” he tells SmartCompany.
Costa holds the Australian trademark for the term, which enables him to trade the name, although he must also display the official name of the business, Cavalry Investments Pty. Ltd. on-site, within receipts and on other official business documentation.
It’s a fine line Costa says he’s prepared to toe in order to use the name, which has already garnered him a fair bit of attention.
“We’ve had an influx of investor inquiries,” he explains. “We’re looking to partner with some industry partners to provide a bit of background and experience in the back end.”
The first Eggslut cafe will open in Queensland within the next 12-24 months, but there are hopes to expand the business into other states.
In his decision, McCabe said the case had something to offend “almost everyone”.
“Conservatives will be aghast at the coarsening of public discourse if the applicant succeeds in registering a business name that incorporates the word ‘slut’. Many liberals of a classical bent will be troubled by the attempt to regulate unseemly or ugly expression,” he said.
“Progressive types might see the attempted use of a misogynistic slur in a business name as evidence of the need for more stringent regulation of business practices that tend to excess, insensitivity and oppression.”
But Costa argues that as participants in a free market economy, Australians will decide for themselves whether the name is offensive.
“In a free market economy consumers should be able to vote with their feet. If it’s as repugnant to good taste as the regulator claims it wouldn’t be a problem they’d have to deal with for long,” he contends.
ASIC have broad discretion
Speaking to SmartCompany, commercial lawyer Richard Prangell explains the corporate regulator has broad discretion when it comes to approving business names.
“The test is effectively whether, in the opinion of ASIC, it is likely to be offensive,” he says.
“As long as they make that decision in good faith, they can effectively make whatever decision they want.”
Prangell advises businesses not to begin trading or purchasing marketing materials before having their name approved, but says there’s little other recourse for testing the waters with the regulator before submitting an application.
However, as was the case with Costa, IP Australia may take a different view than ASIC, providing those with contentious names an avenue to market.
“IP Australia has similar rules but may take a different approach,” Prangell says.
EggSlut is the name of a cafe in the United States, but Costa says he came up with his name independently.