Not Applying for a Trademark Spells Disaster for Your Business

Category: Trademark Information

This story might be familiar to you. An aspiring businessman sets up his own venture. He spends hours deciding on a business name, which he registers at the Australian Securities and Investments Commission and puts it on all his products. All seems to go well but a few months later, a lawyer reaches out to him and tells him he has no right to use his business name. Turns out, the business name is trademarked by another business. The mishap led them to court, and the man lost the business he’s worked so hard for.

A lot of people are like this businessman. They believe that once they’ve registered their business name, everything would sail smoothly. But there’s a world of difference between a business name and a trademark. This is what Pinnacle TMS strives to educate our clients about —applying for a trademark could mean either success and shut down for your business.

Business Name vs. Trademark

Business names are required in running a venture in Australia if you are not using your own name, but registering one doesn’t give you exclusive rights to use it.

A trademark, on the other hand, is a legally protected word, phrase, shape, logo, and more, which helps people identify your product or service. It gives you the exclusive rights to use and sell the mark.

There are two possible consequences if you do not apply for a trademark for your business name. First, the party that owns the trademark of your business name can take legal action against you. Second, you have no legal power to stop anyone from using your business name.

Legal Actions Against the Use of a Trademark

When you use a business’ trademark without authorisation, you are infringing on another’s rights. It could be deemed as an unlawful act.

In some cases, the aggrieved party sends you a cease and desist letter. This is a legally enforceable order that directs you to stop using the trademarked name and remove it from your products and services. You need to change your name and start from square one.

If you ignore this, the aggrieved party could commence legal proceedings whch could mean you could end up in Court.  If they win, not only would you have to stop using the trademark, but the aggrieved party could also seek compensation in the form of damages. If the infringement is determined to be a crime, the court could order a six figure fine or jail sentences.

This is graver when small businesses are involved. Huge and established brands have the money and resources to defend themselves from allegations and go for a quiet settlement. Small enterprises might not be as fortunate.

Businesses with Similar Names

Without a trademark, it is difficult and expensive to stop a competitor from using your business name. This is detrimental to your business. Not only can businesses with the same name compete with you, but customers could also think they’re affiliated with your brand.

There are ways to protect an unregistered trademark, though. If your business name (an unregistered trademark) has built a significant reputational value, the businesses who use it might be accused of passing off as your business.

These accusations may be difficult to prove, however. The best way to protect your intellectual property and save yourself from the significant defence is to apply for a trademark registration.

Register Your Trademark

With so much at stake, it’s imperative that you register your trademark as soon as possible.  The cost to register your trade mark vs the amount you would need to spend in legal and possibly court fees  is significantly less.     The protection trade mark registration guarantees security for your business in the long run. It’s a business asset and a worthy investment.

Contact our experts to help you apply for a trademark.