We’re issuing this important warning due to the number of issues that we’ve seen coming up regularly. In this episode, we’re talking about the risks for accountants and advisors in business name and company registrations.
- Why are we talking about this?
- The art of trade mark searches
- Infringement risks and the risk of rebranding
- Action steps moving forward
Joanna: Hi, it’s Joanna Oakey here and welcome back to talking law brought to you by the commercial legal practice aspect legal. Today we are changing gears a little bit and issuing a really important warning due to a number of issues that we’ve seen quite a bit in the past but also that we’re seeing quite a bit regularly and so today we are talking about risks for accountants and advisors in business name and company registrations.
In order to talk about this topic, I’ve brought back our resident expert in Intellectual Property, Grace Yi. Grace, thank you for coming back today.
Grace: Thanks for having me Jo.
Why are we talking about this?
Joanna: Fabulous okay. Why are we talking about this topic, Grace? Let’s talk about the issues.
Grace: We are talking about this because of the heartache that clients feel when they are faced with having to rebrand.
Joanna: And particularly so when they’ve had someone or even they themselves but particularly if they’ve had someone set up a business name for them so register a business name for them or set up a company for them where the name that has been chosen hasn’t undergone the proper searches both from a trade marks and general use perspective and they then end up in the situation where either A) they try to register a trade mark or B) they receive a Cease and Desist notice. They suddenly realise that business name registration and company name registration is not the same thing as trade mark registration and that just because you can register a business name or company name doesn’t mean you won’t be at risk of an infringement action if you do.
Grace: That’s right and I guess the really simple takeaway which we may as well just say right here is when you go to register a business name or a company name you must check the trade marks register first.
The art of trade mark searches
Joanna: And that’s an interesting point because we we’ve actually had a number of instances as well of people contacting us after they say they’ve done their own searches. And I think the thing with trade marks is sometimes it can look really easy, deceptively easy to do searches and we’ve certainly had quite a few instances of us doing searches afterwards and saying you know what you just didn’t search properly. You didn’t pick up these other elements that are likely to cause a massive issue potentially even infringement action against you.
So I guess it’s about being aware that when you’re registering business and company names that it’s not just whether you can get them registered it’s also whether or not there is an infringement issue and whether or not there’s an opportunity to register this as a protected as a trade mark in the future, but it’s also about doing the right searching.
Grace: Yes, doing the right searching because trade mark searching is an art not a science.
Joanna: That’s a really good point, Grace. I haven’t thought of that before. I think it’s right. I think it’s absolutely right it is like an art. Professionals spend decades and certainly we have spent decades honing the art. Whilst it might look simple just some warnings there.
So let’s talk about the issues that we’re seeing. How do they appear? What are some of the recent things that we’ve seen Grace that made you say to me we really need to remind people about this issue?
Infringement risks and the risk of rebranding
Grace: What happens is that we get clients coming twice saying oh we’ve just started it up. It’s early days for us but we’ve been around for a few years now so we’re now at the stage where we’re thinking oh we should start getting serious about our brand and then they’d like to do the search. Unfortunately, the search comes back with something that is obviously going to be an issue. And then with further investigation it appears that this other trade mark owner has been around the business earlier than our client. Then we’ve got a straight out infringement risk and the unfortunate situation is that you either go into this process of having a trade mark dispute, which is inherently lengthy and costly and stressful or you face the heartbreaking decision of having to rebrand.
Joanna: Absolutely. And the instances you’re talking about here of having used a brand for a couple of years sometimes this can also happen in the rebranding phase, so we were talking about accountants just because that’s where we’d identified some issues that had come up recently because they’re quite often the people at the coalface who are registering company names and business names for their clients, but also marketing companies and graphic designers and branding companies. We’ve also seen a lot of issues come from clients of those types of organisations where they’ve had someone come up with a new brand for them and then they’ve paid a whole bucket load for marketing and rebranding expenses and only then after all of that have realised that actually they’re really exposed to an infringement action by using these new marks.
So I think that’s you know it’s worth pointing out that’s also where we sometimes see issues and I think the real I think the real risk for whether it’s accountants who have registered these companies and business names or whether or not it’s a branding or marketing firm is that the clients sometimes view them as responsible for not picking up the issue. To be fair it’s actually a really difficult thing to do. Obviously as an accountant or as a as a brander or marketer, your specialty is not in trade marks searching. But clients do feel aggrieved quite often in these situations, don’t they?
Grace: Yes, and understandably. I guess it’s important to note that the ASIC register and the trade marks register aren’t linked in any way. When an accountant or a creative person, if they’re actually doing this step, if they go to the ASIC register and check the availability of a business name it may very well be available as a business name and I guess that’s the that’s the point. The client has given them a list of names that they’re considering. They’re checking if it’s available at ASIC and it is, so they just go ahead and register it.
But I think ASIC does issue a note on its registration page that you should consider the IP rights that another business might have. There is a trigger there to remind you to think about this issue and really it’s the trade marks register which contains the information of trade mark owners and their rights in similar business name and that’s the issue.
With the ASIC register, it’s very easy to get a business name or company name registration for something as soon as you’ve got enough of a differentiation in a word like group or Australia or something very descriptive at the end of the name. And that wouldn’t be enough to get around a trade mark infringement issue when it comes to trade marks.
Action steps moving forward
Joanna: What are the action steps here then Grace? Let’s say we’re talking here to either a business that’s coming up with a new brand or rebranding or indeed hasn’t had their own brand protected that they’ve been using for a while or advisers working with business like accountants and branders or marketers. What can they do?
Grace: There are a few things to keep in mind. One is does somebody else already own the trade mark rights in this name? It involves doing a trade mark search. It’s important that someone who knows how to do a search is doing the search to be absolutely sure that you’re minimizing the risk of trade mark infringement.
Other issues are – is this name able to be registered as a trade mark? If you’re picking a name that is really generic. It may inherently have difficulty getting registered as a trade mark and indeed it’s actually a weaker mark when it comes to enforcing trade mark rights against other people in the future. So really accountants and creative people they’re very important to businesses because they have so much influence I guess or ability to affect a business because they’re really helping them to create these important assets for the business moving forward.
Joanna: And so then as an accountant or as a creative in having a part playing a part in this brand process, I think it’s really important that you’re at least alerting your clients to the risks and giving them ways that they can minimise those risks. And of course, these are services that we can help you with but we’re also just happy to have a quick chat for free if you want to speak to one of our lawyers, Grace or any of the other team aspect legal who are specialists in this area. They’ll happily have a quick chat to you about understanding what the risks are in a particular situation and how these risks can be avoided. It’s not hard it’s just about being aware and getting the right advice at the right point. I think that’s the answer.
Grace: That’s right. It’s not hard. If you addressed it early, it can be simple.
Joanna: Well look thank you so much Grace for coming to talk about this issue. I think it’s a super important issue to be discussing.
As we said it’s an area that can hold high risk unwittingly for the people who are involved. But it’s also very easy to protect against the risk just by you know by adopting the right methodology rather than just going willy nilly and registering a mark without really thinking about it or getting the right advice.
Grace: We’ll keep talking about it over and over.
Joanna: Well we have to because we’ve seen these issues come up for decades. But we’ll continue talking about them because we know how easy it is to avoid the issues and we know how costly it can be for organisations if they allow these issues to occur. I mean look just a few weeks ago we saw a matter where a client had thrown away around about $60,000 in a marketing spend just because they hadn’t gotten onto this early enough.
Joanna: So look, rebrands aren’t cheap and it’s better to deal with the issue by way of prevention rather than cure.
Joanna: Thanks so much Grace and thanks to you, for the listener, for tuning in to our latest quick tips session on risk for accountants advisors and marketers in business name and company name registrations.
If you’d like to find out more about this topic head over to our website at talkinglaw.com.au where we’ll have a transcript of this episode and some notes, so you can see the notes along the way of everything that Grace and I have discussed today. There you’ll also be able to contact our lawyers over at aspect legal like Grace and our other specialist legal eagles if you’d like to help with any of the items we covered today.
Well thanks again for listening in. You’ve been listening to talking law brought to you by the commercial legal practice aspect legal. See you next time.
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