Monday, 2nd September, 2013
Your shop name - cleared for use?
Having taken the time and invested significant resources to set up your own retail business, you want to be sure that your competitors cannot piggyback on your efforts and divert your customers. In this article, Corinne Blumsky looks at choosing and clearing your name for use. An edited version of this article was published in the September 2013 edition of NZ Retail magazine.
Today's shoppers are tricky. They're not just buying products and services, they're buying brand names and experiences - whether it's the quality of products, the 'wow' or 'cool' factors, the price or service. They want the best of all worlds. As a retailer, you have to meet a customer's needs to stay in business.
Having taken the time and invested significant resources to set up your own retail business, you want to be sure that your competitors cannot piggyback on your efforts and divert your customers.
In this article we look at choosing and clearing your name for use.
An important aspect of any business, particularly in the retail sector, is the name of your shop or shops. And this includes your online presence.
Your name is how customers differentiate your business and products from your competition. Your name will prompt customers to visit you again when looking for a repeat purchase. We call this name your brand.
Choosing a unique and memorable name is important because it will set you apart from your competition - even if you are selling the same products. Too often, little thought is given to this unique marketing opportunity.
Retailers sometimes simply choose names that directly describe their business and their geographic location such as 'Kapiti Shoes'. Choosing such a non-descriptive name makes it very difficult to object to another shoe shop opening up in Kapiti with a very similar name like 'Kapiti Footwear'. And it's quite likely customers will confuse the two.
So, think carefully about the name you choose. The more creative and abstract it is, the better able you will be to distinguish your business from competitors and the better you will be remembered by your customers.
There are also legal, cultural and commercial considerations to be aware of when choosing a name. A key factor to consider is that there should be no immediate connection between the name of your shop and the products or services you will sell.
Also you should not choose a name that has the potential to mislead your customers about the services or products you are offering.
Once you have chosen a unique and memorable name, you need to make sure you can use it. If another retailer has registered or is already using the same or a similar name, you may not be able to use it - even if your business is in a different place.
If you adopt the same name as another retailer, there is a real risk that you will face legal action. Be prudent and have a trade mark specialist make the necessary searches before you commit to a new name. If there are any issues, you might be better off choosing another name that is clear for use rather than spending funds on trying to use that problematic name.
A comprehensive search of relevant registers and the marketplace is a good investment.
Once your chosen name is cleared, you can start using it. But it would also be wise to consider registering your name or brand as a trade mark. It's a common misconception that incorporating a company under a particular name or registering a domain name gives you the exclusive right to use that name.
This is incorrect.
Only cursory checks are made to see if another party already uses the same or a similar name are made before a company name is approved or a domain name registered. Neither the company name nor the domain name registration system contemplates whether use of the new name infringes another's rights. Nor do either of these registration systems provide a mechanism for the company name or domain name owner to take action if someone else starts using the same, or a similar, name.
It is up to you to ensure there are no issues with using your name.
Trade mark protection
Whether you can stop another party using a company or domain name similar or identical to yours depends on whether the name is registered as a trade mark. The reputation connected with the name will also be considered.
Registered trade mark rights provide the owner with the strongest protection possible.
As we move closer to a world without borders, trade mark registration will have even greater importance in protecting rights in a name.An edited version of this article was published in the September edition of NZ Retail magazine.