AJPark

However, there are some issues to consider.  We recently had a client approach us who had wrongly assumed that their Australian trade mark stopped others from trading under the same business name.  As a result, they were forced to consider what lengths they were prepared to go to defend their rights.   In this article, we discuss how you can avoid a similar situation here and over the Tasman.

The situation

For this example, we will call the client “Ted’s Tractors”.  The company believed that they were business savvy.  They had:

• Incorporated a company under the name Ted’s Tractors Limited in New Zealand
• Registered the trade mark TED’S TRACTORS  in New Zealand and Australia
• Bought the ‘.com’ domain names for ‘Ted’s Tractors’ including several varied spellings
• Planned to register the trade mark TED’S TRACTORS in the United Kingdom, United States and Japan.

Ted’s Tractors Limited made and distributed tractors under the name TED’S TRACTORS, and always had their tractors photographed with a blue heeler dog sitting in the driver’s seat.

Always interested about know where they were ranked on Google, Ted’s Tractors Limited did their usual quarterly Google search.  The results showed that they had moved up slightly, but also on the list was the name ‘Tedd’s Tractors’, with a ‘.com.au’ domain extension.  This site, (though a poor imitation), was selling tractors in the Australian market, and even had pictures of a blue heeler dog sitting in the driver’s seat of the tractor displayed.

Ted Tractors Limited undertook a ‘whois’ name search to find out who owned the .com.au site, and tracked it to a small owner-operator in South Australia.  The client was astounded that teddstractors.com .au could be registered as a domain name, in the face of their trade mark for TED’S TRACTORS and contacted us for help.

The Australian bodies

In Australia, there are two ways people generally conduct business.  The Australian Securities and Investments Commission (like the Companies Office in New Zealand) look after the incorporation of companies.  However, because costs in Australia are high to set up and maintain a company (AUD$400 set-up plus between AUD$212 to AUD$1,000 yearly), many businesses do not choose this alternative.

Many people instead take the opportunity to register a business name and trade under it without setting up a company.  While this does not give them the ‘limited liability’ protection of a company, it does enough for a business to trade under a business name. 

However, when you register a company or business name in Australia, neither of the authorities check with IP Australia (the body that looks after trade marks) to see if there are any issues with existing trade mark rights. 

How does New Zealand compare?

The situation in New Zealand is not dissimilar.

In New Zealand, when you incorporate a company with the Companies Office with a particular name, it is done quite independently from any trade mark registration, or domain name registration.  There are no cross-reference checks made—you register all three separately—and registering a trade mark is the only way to ensure that you have protection in a name.

Incorporating a company with a particular name means that no other company can be registered with the identical name on the companies’ register. However, other companies can register quite similar names, often differing by only a single word or sometimes a single letter. The Companies Office will allow you to incorporate a company under a name provided the proposed company name is not “identical” to an existing company name. If your name is similar to an existing company name, you may be able to register it. The Companies Office compares the proposed company name with existing company names, but no other checks are made.

The registration of domain names is even less rigorous. Provided the identical domain name of interest to you has not been registered by anyone else, you’re within your rights to register it.

Neither the company name, nor the domain name registration system thinks about whether use of the new name infringes another party’s rights. Nor does either of these registration systems provide a mechanism for the company name or domain name owner to take action if another party starts using the same or a similar name.

Whether you can stop another party using a company or domain name either the same or similar to your name depends on whether the name is registered as a trade mark and on the reputation connected with the name. Having your trade mark registered is best form of protection.   If a reputation is established, this may enable an aggrieved party to object to the adoption of the same or a similar name relying on the common law action of ‘passing off’ or under the Fair Trading Act. Establishing a reputation can, however, be difficult and is often narrowly defined as specific to a particular industry or geographic location.

Fixing the problem

So how did we help our client?  We first wrote to Tedd’s Tractors and advised them of our client’s rights to the trade mark, TED’S TRACTORS.  We asked that they stop operating in a manner that we considered was breaching our client’s trade mark.  Sending a letter such as this always gives the offending party the opportunity to address the situation should they wish to do, and so without possibly needing to take further legal action.  We asked for a response within seven days, but we did not get one.

There were then two possibilities we looked at, both of which focused on trying to challenge Tedd’s Tractors’ ability to legitimately use the domain name teddstractors.com.au.

We tried to remove their ability to use the business name, which would mean that they could not legitimately continue business under the ‘com.au’ domain name.  This was, we thought, the most straightforward course of action.

We wrote to the South Australian Business Names office, pointing out that this name was in breach of our client’s trade mark and asked that they deregister it.  We were advised that they were not able to deregister the business name on these grounds, and suggested that we begin proceedings to force the business owner to stop using the name.

The second action involved making a request under the .au Dispute Resolution Policy (auDRP).  This meant filling out a complaint to be heard by a one-to three member panel. To file this complaint costs between AUD$2,000 to $4,500.  Even if successful, these costs cannot be claimed against the party who has breached the trade mark. This alternative proved successful.

Lessons learnt

While the costs of enforcing your trade mark can be significant, without a trade mark registration your ability to stop another business using the same or a similar name as a business name, company name or domain name, may be more difficult.  

To protect yourself from a similar situation happening to you, we recommend that you:

• ensure your trade mark is registered in all countries you trade in and for the goods and/or services you offer.
• are vigilant and look to monitor potential breaches of your trade mark.
• keep a watch on the companies office, business name and domain name registers for other businesses adopting the same and similar names to yours.
• defend your trade mark where there is clear evidence that someone is causing damage or there is potential loss of income to your business.
• get legal advice immediately if you see any potential breach.
• think about what lengths (and costs) that you will go to defend your
  trade mark.
• look to register specific country domains, such as ‘.au’ and ‘.nz’ in countries where you have registered trade mark  and where you trade.
• should consider if there are other ways to resolve the situation.

An edited version of this article was published in NZ Retail, November 2009.

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  Corinne Blumsky

  Partner