Key Differences Between Trade Marks and Trade Names

George Raptis

• 9 January 2023
• 17 February 2023
• 5 min read

Despite the similarities, the words’ trade mark’ and ‘trade name’ have different meanings in a business context. For instance, unlike registering a trade mark, registering your trade name is a requirement by law. This article can help you understand the main differences between trademarks and trade names.

Trade Marks vs Trade Name

A trade mark differentiates your business’s goods and services from others in the market. Moreover, a trade mark can include your company: 

• logo; 
• slogan; 
• distinctive colour; and 
• even your trade name.

On the other hand, a trade name is what you and your customers use to identify your business. Therefore, a trade name is critical when you operate the business under a name that is not yours.

Registration

You must register your trade name if you conduct business under a name other than your own. Therefore, you must register your business name with the Australian Securities and Investments Commission (ASIC).

However, registering your trade name with ASIC does not necessarily give you the exclusive right to use the name. For example, ASIC is unlikely to register two businesses with the same name. However, you may want to use your trade name when marketing your goods and services. For this reason, many business owners consider registering their trade name as a trade mark.

If you register a trade mark that protects your trade name, you gain the exclusive right to use, license and sell goods and services using the name. In this sense, trade mark registration can:

• prevent competitors from using your trade name without your permission;
• allow you to develop your brand identity to the exclusion of others; and
• open additional income streams for your business if you decide to license or sell your trade mark.

However, you should note that trade mark registration is not a legal requirement. Instead, it is an option business owners choose to take to protect their intellectual property.

Should I Register My Trade Name As A Trade Mark?

Several benefits are associated with registering a trade mark over your trade name. As a business owner, you must consider these benefits in light of your business’s short-term and long-term goals. We explore these benefits further below.

1. Protection Against Trade Mark Infringement  

Registering your business name with ASIC does not give you the exclusive right to use the name. Instead, a registered trade mark can give you this right. It is crucial to gain this level of protection, particularly where someone commits trade mark infringement.

Under the Trade Marks Act 1995, trade mark infringement occurs when a trader uses a sign that is substantially identical or deceptively similar to your registered trade mark concerning the same, or closely related, goods or services for which you registered your trade mark.

Consequently, taking action for trade mark infringement provides a good avenue for protecting your intellectual property.

2. Competitive Advantage 

The consumer market has many different options. Therefore, your business must stand out from others. Since a trade name is an identifiable feature of your business, you must protect it by registering a trade mark. Furthermore, since you gain the exclusive right to use a registered trade mark, you can achieve a competitive advantage by using and developing your brand identity to the exclusion of all others. After all, instantly recognisable trade names like McDonald’s and Apple enjoy trade mark protection in Australia!

3. Commercialising Your Trade Mark 

A registered trade mark also gives you the exclusive right to license and sell your mark. If you later decide to trade under a different name or sell your business, your trade mark can be a valuable stake in the sale transaction.

The value of a registered trade mark is typically associated with your business’s goodwill. In this sense, the greater consumer recognition your business has, the greater the value of your trade mark.

As a trade mark owner, you also have the option of licensing your trade mark. Licensing is where you agree to let a third party use your trade mark under certain conditions. A licencing agreement will typically include royalties or licensing fees. When you license your trade mark, you do not lose ownership of the trade mark. However, depending on the licencing agreement, you may not be able to use the trade mark during the licence period.

Key Takeaways

A trade mark is a sign you use to distinguish your business’s goods and services from others. On the other hand, a trade name is how you and your customers identify your business. Unlike registering a trade mark, registering your trade name is a requirement by law. However, registering your business name as a trade mark can give you the exclusive right to use, license and sell your trade mark. 

If you wish to register your trade name as a trade mark, our experienced trade mark lawyers would be happy to assist. Call us on 1300 657 423 or complete the form on this page. 

Frequently Asked Questions