Benefits of Registering a Trade Mark for Your Trade Name

George Raptis

• 5 August 2021
• 18 January 2022
• 6 min read

Once you have registered your business’ name and begin operating, you should begin to consider other ways to protect your business’ intellectual property. As a business owner, you can prevent others from misusing your trade name by further protecting your business’ trade name. This article outlines the key differences between registering a business name and registering a trade mark, as well as four benefits of obtaining a trade mark for your trade name.  

Key Differences 

The process of registering your business’ trade name is completely separate from the process of registering a trade mark for your trade name. It is a legal obligation for any business operating in Australia to register your trade name with the Australian Securities and Investments Commission (ASIC) via their Australian Business Registration Services. You will receive then receive an Australian Business Number (ABN) alongside your registered business name. If you are a sole trader, in a business partnership or are establishing a company, and you want to call your business something other than your own name, you must register your business name. ASIC and consumers use trade names to identify businesses. This is especially in the instance when businesses are operating under names that are not the owners.

On the other hand, registering a trade mark for a trade name is not a legal obligation. Still, it is an added protection business owners can apply for to prevent others from copying their business’ name. A trade mark owner has the exclusive right to use, licence and sell their trade marks. In the instance where someone infringes on these exclusive rights by misusing their mark or adopting an identical or similar trade mark of their own, trade mark owners can enforce their legal rights and prevent the misuse from continuing. You can apply for a registered trade mark via IP Australia. 

1. Protection Against Misuse 

When you register your trade name, it cannot be identical to an already registered business. Once someone has registered a trade name, another business cannot then operate under the same name. However, registration alone does not:

• give you the exclusive right to use the name; or
• prevent other businesses from registering a similar name. 

Instead, trade marks can provide you with the exclusive right to use your trade name and prevent other businesses from using your trade name. If a business copies your trade mark, you can enforce your exclusive rights by preventing the business from continuing to misuse your trade name. 

2. Competitive Advantage 

Given the consumer market is flooded with different options, your business must stand out from its competitors. A trade name is an important part of any business’ brand and is worth protecting. Put simply, trade marks protect the features of your business that make it unique. The products or services sold by your business are closely associated with your business’ name. Therefore, protecting this name from being used by competitors is essential to establishing your brand’s identity. In this sense, you can better achieve a competitive advantage by registering a trade mark for your business’ trade name. 

Some instantly recognisable examples include McDonald’s and Apple. They have both registered their trade names as operating businesses in Australia and have registered trade marks in Australia. 

3. Avoid Infringement Claims 

Registering a trade mark for your trade name can also reduce the risk of you infringing on another business’ intellectual property rights. There are instances where a business might not register a trade name with ASIC but protect it with a trade mark. For example, an entrepreneur who has an idea for a business name can register the name as a trade mark but does not necessarily need to begin operating their business under that name. 

If you register your trade name as a trade mark, this will reduce the risk of you infringing on a trade mark owner’s exclusive rights. This is particularly beneficial given committing trade mark infringement can lead to unwanted legal proceedings against you that are both costly and time-consuming. 

4. Commercialising Your Trade Mark 

Trade mark owners also have the exclusive right to sell or licence their trade mark. Suppose you decide to trade under a different name or sell your business. In that case, your trade mark can be a valuable stake in the sale transaction. Your trade mark will represent the value and reputation of your business’ products. So, the greater consumer recognition your business has, the greater the value of your trade mark. Ultimately, your business’ trade mark can attract buyers who are likely to pay a greater price for the security that comes with a registered trade mark.

You also have the option of licensing your trade mark. Licensing is where a trade mark owner agrees to let a third party use their trade mark. Licensing agreements function over a specified period for an agreed price. Depending on the licensing agreement, the trade mark owner will not be able to use their trade mark during the licensing period. However, they can begin using their trade mark once the licensing period has ended. 

Key Takeaways

The legal obligation of registering a trade name is separate from the option of registering a trade mark for your business name. Registering a trade mark for a trade name will give you the exclusive right to use the name during the course of your business’ operation. A trade mark can also help your business gain a competitive advantage, avoid potential trade mark infringements and ultimately become a valuable asset to your business. If you need help registering a trade mark for your trade name, our experienced trade mark lawyers can assist. Call us on 1300 657 423 or complete the form on this page. 

Frequently Asked Questions