Case Study 1 – the importance of trademark protection and searches before registering a business name, company name or website name

Company X traded for 10 years in Queensland without registering a trademark to protect their business name and website. They distributed software and hardware, mainly through a website, to many wholesalers and private buyers.

Five years after Company X started their business, an interstate company registered Company X’s name as a trademark, and then waited 5 years before issuing a “cease and desist letter” through their lawyers. They threatened to take Company X to Court unless Company X changed their name and handed over their website. As Company X could not afford to defend this in Court, they were forced to hand over their website name, which was earning $60,000 plus a month, and adopt a different name for their business. Unfortunately, they had many wholesalers and regular purchasers who had bookmarked the website, and therefore lost a lot of business to the competitor.

Solution: Had Company X checked to see if their name was covered by trademark rights and registered the name as a trademark, then the interstate company never would have been able to register the trademark and threaten Company X with Court action.

Case Study 2 – the importance of searching before using or marketing a name

Company Y chose a name for their business, and engaged a graphic designer to spend $5,000 on developing logos and brochures.
Once the work was complete, Company Y’s director registered the company (at a cost of $1500) through ASIC to start the business. The director had heard of trademarks, but wasn’t sure of how relevant they were.

She then contacted our firm and was astonished when we advised that no legal rights to a name are provided by registering a company name, business name or domain name. By way of contrast, a registered trademark provides Australia-wide legal rights to the name or any deceptively similar version, for the goods and services, and also for closely related goods and services.

On hearing this, Company Y’s director was justifiably concerned, and asked us to conduct an immediate trademark search. Unfortunately, we identified that a very similar trademark had been registered in Australia by Company Z, and that use of the Company Y name would breach Company Z’s rights.

Our advice was not to commence trading, to change the name and to have our firm conduct a thorough trademark search to ensure that the new name was clear for use and registration as a trademark. We identified that the next name was clear for use and registration by Company Y. However, Company Y’s overall costs were far greater than if they had properly investigated the trademark situation before committing to the name for their business.

Solution: Had Company Y carried out proper investigations into the availability of the proposed name for their business and applied for trademark registration, their overall costs would have been far less as they would not have wasted expenditure on an inappropriate name.