Is a Company Name a Trademark?
A company name is not a trademark. A company name is a legal identity for a corporation which can separate legal personality, can own property, sue and be sued in its’ own name, has office bearers, members and enjoys perpetual succession. A company may choose to trade under a registered business name, or in some cases it may not conduct trade at all.
Every company is allocated a registration number and has certain ongoing filing and compliance requirements depending on the laws of the jurisdiction it operates in. The registration of a company name does not confer any proprietary rights upon the holder of a company name. Companies can frequently be involved in many trade activities which change over time.
As stated above, a company may register a business name which it trades under. Registration of a business name, like a company name, is a legal obligation and does not automatically grant a company, or a company doing business under a fictitious name, a right to use that particular business or company name as a trademark.
The relationship between these different identifiers, namely trademarks, company and business names has generated a lot of confusion. Many businesses have misconceived the nature of the rights which attach to each identifier and have failed to comprehend the interface between them. This is because many traders don’t fully comprehend the inherent legal nature and purpose of each identifier and the differences between them. This can lead to unanticipated litigation and commercial uncertainty. A business name cannot be registered if it is identical to a registered company name, or is a name which is identical to, or closely resembles an existing registered business name, where the public would be likely to be mislead if business were carried on under both names.
Automated software is sometimes employed by some jurisdictions to apply the above criteria however there is still a large reliance upon human skill and judgement in interrogating databases to detect potentially conflicting names.
It is essential that traders understand that business names are registered out of a sense of legal obligation, their purpose being to provide a mechanism to ensure consumers and traders are able to identify the entity behind a trading name or firm. This promotes accountability. However, a business name is also capable of functioning as a trademark under certain circumstances. It can function as a trademark where it serves as more than just a business or company name and informs consumers of the origin or source of a product or service.
Registered businesses can also be registered as registered trademarks provided they meet the normal criteria for registration. The only assurance that can be gained by a properly executed search of a business names register is that a registrant is apprised that there are no prior or subsequently registered business names in the jurisdiction in which the search was conducted with a confusingly similar trading name.
However this won’t afford the registered business owner protection against similar prior registered trademarks, similar subsequently registered company names, and common law rights to similar names such as trademarks or unregistered trading names.
There has been a widespread misconception that a registered business name or a company name confers a proprietary right upon the owner. This had led businesses to assume, erroneously, that a registered business or company name will confer both immunity upon them from trademark infringement proceedings and exclusivity in respect of rights to a particular name. This is not the function or purpose of a business and/or company name.
This has resulted in business and company name registrants (including company registrants doing business under registered business names) becoming aware that their business name infringes either a pre-existing common law or registered trademark only after making a significant investment in their business. The legal and marketing costs in terms of re-branding their identity are significant. There is also the possibility of a business or company being sued and having to pay compensation to either a domestic or foreign trademark owner.
Across the world there are a wide range of systems in different jurisdictions for the registration of business, company and trademark rights. Some countries offer greater safeguards against the possibility of a company and/or business name being registered which could potentially conflict with an existing trademark. Business and company names should only be registered where searches of the trademarks register reveal there is no conflict with either a pending or existing trademark in the same or similar field of business activity. Ideally searches should be undertaken beyond official trademark, business and company registration databases.
Where a business name registration is in existence at the time of the registration of a trademark this creates a presumption, which can be rebutted, that the name was in prior use for the purpose of establishing a defence to a later trademark infringement action. Owners who subsequently acquire trademarks bear the onus of establishing that a business name which appears to infringe a trademark hasn’t been used continuously in the course of trade on similar goods or services before the date of registration or first use, whichever date is earliest.
The misconceptions that a company name will give rise to a right of exclusivity over that name and confer immunity from a lawsuit against a trademark holder gives rise to a false sense of security by the owner of a company name. A person who registers a company name does so as they have elected to organise their business by incorporating it, which requires them to conform to various requirements under corporations law.
As stated above, often a company will choose to do business under a registered business name rather than adopt their company name. On other occasions a company may decide to use their company name as their trading name. The real problem however arises due to a lack of understanding of the purpose and function of company and business names compared with trademarks.
As with company and business names, many domain name registrants are under the misapprehension that they have property rights in a domain name registration. What traders fail to appreciate is that domain names are issued on a first come first served basis and that their domain name may be either identical or confusingly similar to a trademark owned by a third party. This could likewise expose them to potential trademark infringement actions either in the Courts or through the arbitration system for the resolution of domain name disputes where the trademark owner claiming rights in the domain name takes legal action.
A Domain Name only confers a revocable licence upon a person to use the name, not a property right. A Trademark on the other hand confers upon the owner an exclusive property right which can be used, assigned, licensed, mortgaged or bequeathed. There is also an assumption made by a domain name holder that the domain name registrar checks the name they register. In many cases domain name registrants, just like company and business name registrants, are unaware of the risks of trademark infringement and the need to conduct comprehensive searches before choosing a name.
The strongest misconceptions exist in the area of business and company names due to not understanding that these four distinct identifiers serve completely different purposes.
Only a Trademark will confer upon the owner a property right and exclusive rights to the use of a name. On the other hand the registration of a company name and a business name arises out of a legal obligation and doesn’t confer any entitlement as such. Registrants must comply with business name and company name legislation in order to lawfully conduct business. As a registrant is allocated the right to use a business name or company name after a search of the register is conducted, it is possible that they automatically assume that this confers ownership rights upon them and nobody can either use or take their name away from them.
Some countries with federal systems of Government have registration systems which are more fragmented than others which compounds the confusion. State business names are registered in Australia by states and territories, whilst company names are registered pursuant to federal law. In the US company names are registered through various State registries. This was also the case in Australia prior to the introduction of a national system of registration of company names in 1991. However, after the adoption of a national system in Australia in 1991 there was a lot of confusion as there were a number of companies in different state jurisdictions which had identical names.
For traders to understand the distinctions between company and/or business names, domain names and trade marks they must comprehend the nature and function of a trademark. A trademark is a sign which is used to.distinguish one traders goods and/or services from those of another trader. A trademark serves as a badge of origin or source identifier and informs the consumer of the origin of goods and/or services. There are two types of trademarks; common law and registered trademarks.
Both serve the purpose both of fostering goodwill associated with a business’ products and/or services, and protecting a consumer by informing them of the origin of goods and/or services. The advantage of owning a registered trademark for a trader is an evidentiary one. A registration gives the owner a right to enforce their trademark without having to prove reputation in the market in respect of the goods and/or services associated with the mark.
To be registered a trademark must be capable of distinguishing a trader’s goods and/or services from those of others in a particular field. It cannot be substantially identical with or deceptively similar to a trademark either registered or applied for by another person in respect of similar goods and/or services.
A company name is not a trademark, and a trader who registers a company name or a business name must conduct a search for trademark applications and registrations prior to registration. These kinds of searches have their limitations as they won’t uncover common law trademarks. However there are professional trademark clearance services which yield more comprehensive results.
As a company name and/or business name is not a registered trademark a person contemplating the registration of a name should conduct a thorough endeavour to search for all prior common law and registered trademarks both domestically and internationally.
As pointed out above just because a company name is not technically a Trademark this does not mean that either a company name and/or business name cannot eventually perform the function of a trademark. There is no one single place where a person can search for all conflicting business, company names, commercial names, brands and unregistered common law trademarks.
There is no guarantee a name has not already been adopted in trade or commerce by another business as a trademark without being registered. In most countries trademark law recognises the existence of rights in a name acquired through prior use. If there is some evidence that a trademark is in existence, whether by registration or prior use, extensive enquiries should be undertaken prior to bearing the risk of filing a trademark. Your enquiries may include whether the business is in the same industry, the same geographical location, has the same or similar marketing channels, sells the same or closely related products or services and sells to the same customer base. The critical thing you should be trying to establish is whether customers are likely to confuse your business with another business’ goods or services. If there is any overlap, you should be very cautious, as you are risking potential legal action, and devoting a lot of money, time and effort to building a brand, only to risk being sued and having to rebuild your business by starting all over again with a new name.
Another business within your industry which is already using the same name in the same geographic region as you will be likely to have superior rights to a name if it is using the name publicly even if it hasn’t officially applied for trademark registration. You may believe a business will be indifferent to what another business is doing in a remote region of the world. However since the advent of the internet, the concept of location has assumed a completely new meaning and trademarks are increasingly colliding with domain names. Instead of being linked to specific territories, businesses are now competing for a presence on a global stage. Vast numbers of businesses, even local enterprises have put up their own websites, creating a potential for competition, confusion and conflict in the marketplace.
There is a doctrine called honest concurrent use in some jurisdictions where two trademarks operating in the same sphere will be allowed to co-exist harmoniously, however this is a rare occurrence.
International trademark owners have also proven to have been quite aggressive in hauling companies into foreign courts particularly where their trademark is well known or famous, even where there is little likelihood of confusion arising from the use of their mark.
Because so much business is now being done online, most businesses will want to be able to use their proposed mark as a domain name so that their customers can easily find them on the Web.
A company name, in and of itself, cannot be trademarked, as it first needs to be associated with a specific product or service before it becomes a trademark. Upon registration a company can become a registered trademark in one or more of a number of internationally agreed upon classes of goods and/or services recognised under the Nice Classification system. Equally a Company may acquire common law trademark status by gaining a reputation in the minds of the consuming public with the provision of a particular product and/or service, so that it operates as more than just a company name.