Name Your New Business with Caution
Choosing a name for your business is one of the most important decisions you will ever make. As a business owner you need to give careful consideration to all future legal and branding ramifications.
In this article BINH REY covers the points you should take into account before deciding on a name for your business.
Many business owners love the idea of giving their brand a descriptive name because they feel it tells potential customers exactly what they do. Unfortunately, descriptive names are not ideal when considering trademarks. A trademark is granted on the basis that it is unique and distinctive enough to distinguish one brand from another within an industry. A trademark cannot be granted if the name is descriptive but does not distinguish it from products or services used by other traders.
Often if it’s descriptive, for example a logo with descriptive words within it, the logo will be passed by the examiner and the visual aspect of the logo will be granted protection, but not the exclusive use of the words themselves. Creating a logo for a descriptive trademark is the only way to provide protection for descriptive words that would otherwise not be granted a trademark on their own.
Without the logo, the domain name, carsales.com.au, would have been too descriptive to be registered as a trademark. With the logo trademark protection, carsales.com.au can stop another competitor from using a slight variation of the name within the relevant industry, in this case selling cars online. e.g. Carsales8.com.au could not operate as an online car sales search business.
Using carsales.com.au as a further example, the word ‘carsales’ is deemed too descriptive to trademark in word form within these two classes: Automotive printed publication and Automotive website.
However, carsales.com.au have been able to obtain the trademark for the logo, ensuring that their visual brand cannot be copied by competitors. The carsales.com.au logo is now a registered trademark of Carsales.com Limited.
“Carsales” in word form could be trademarked however by other companies in the following non-conflicting classes, as it does not relate to the carsales.com.au main business purpose, which is to advertise cars for sale:
- Computer software; manuals and instruction materials provided with computer software; CD ROM; DVDs; magnets
- Instructional and training materials; pens.
- Clothing including T-shirts, sweat tops and headgear including beanies and baseball caps.
The owners of the carsales.com.au logo would need to be very diligent to prosecute trademark infringements and they also need deep pockets to be able to defend their descriptive name which they don’t own as a trademark for in such classes.
A descriptive name might be good because it tells the customer exactly what you do, however there can be a lot of expense and stress involved in protecting the brand as many owners of descriptive trademarks will tell you. Why not be brave and give your brand a distinctive name instead.
In Sydney and Perth, you see cars with the “no birds…” logo driving around the city. This company is in the rental car company business, and there is nothing in their “name” that describes what they do. However, their customers know them as the ‘No Birds rental car company’, when in fact their registered business name is Bayswater Car Hire which started in Perth in 1958 and opened its Sydney offices in 1988.
The phrase “no birds” arose when the business started in 1958. Back then it was standard for delivery girls to drive the cars to the customer’s location as part of the full service when clients booked a rental car.
When Bayswater Rental Hire entered the rental car market, they decided to cut costs by eliminating the delivery girl service. They came up with a fun way to convey this by using the logo ‘No Birds…’ meaning no delivery of cars by girls. This logo was painted onto the cars, invoices, advertising, business cars and store signage, and over time clients started to refer to them as “No birds rental car company”. Bayswater Car Rental Pty Ltd owns the word trademark for, ‘no birds’. This means that even if they change their logo, they are still protected as they own the exclusive rights to use these words within the car rental industry.
That’s the advantage of giving your business a non-descriptive name. Only a copycat would dare to call their rental business, “no birds”.
No Birds is a registered trademark of Bayswater Car Rental Pty Ltd. Carsales.com.au , word and logo form, are registered trademarks of Carsales.com Limited.
