Business name danger
Monday, May 11, 2009/
In theory the content and suggestions in James Omond’s article sound great. And he’s correct, that this approach certainly provides you with legal protection. But note clearly, it does not provide you with a fail-safe; nor does it provide you with an easy means to recoup your costs of monitoring and enforcing compliance.
Let me explain with a personal example.
We had noted over the years a number of businesses registering business names using our trading name “Party Plus”. We assumed these were genuine and honest mistakes rather than deliberate attempts to defraud us. We already had in place two registered trademarks – one with the words “Party Plus” and the other a logo with the words “Party Plus” included. Based upon advice from our lawyers and ASIC, we changed the name of our company holding IP to Party Plus Pty Ltd. In theory, and by law, that meant that no-one could register any company or business name in Australia using the “Party Plus”/”Parties Plus” words without our permission.
So you can imagine my surprise when we then found … a mere three months later …that two separate businesses in two different states were permitted to register business names with the words “Party Plus” or “Parties Plus” in their names. These were not companies, but business names registered through the relevant state department responsible for business name registration. What the …?
I duly wrote to the businesses and the matters were resolved amicably. But I had a most distressed phone call from a nice chap in another state who asked “why did the state department recommend that I use that name, allow me to register it, and charge me for the privilege?”. I could see his point, and shared his deapair – although at least I was only out of pocket by four hours work and $440 for an hour’s legal consultation – he had placed Yellow Pages and other print media ads, registered domain names, and needed to completely pulp his entire stationery, and scrap his vehicle livery and shop signage at (I’m guessing) a cost of at least $5000. Not fun for a start up.
A subsequent letter from me to the relevant state and federal ministers and my local Mmember produced the response “Yes, yes … shame … disgraceful … tut, tut … we’re looking to create a national names register”. (I paraphrase – you get the drift.)
Has anything changed yet? Not as far as I can see. My guess is that they’re still “looking into it”.
SO BE WARNED. In theory, I believe James Omond is 100% correct and provides good counsel on the matter.
But in practice, this still requires you to be diligent and to carry out your own compliance and testing. And even if you have all these safeguards in place, YOU will be the one who needs to instigate legal action … at YOUR cost, time, effort and emotional capital.
And no, you won’t get a letter of apology or refund of your IP or company registration fees!