Australia considers second-tier trademark system

The Advisory Council on Intellectual Property (ACIP), which advises the Australian Federal Government on intellectual property (IP) matters, has published an issues paper reviewing the relationship between trademarks, business names, company names and domain names. This review, which is certainly not the first on this subject in Australia, focused on the confusion within the business community relating to the rights and protection given by trademarks, business names, company names and domain names. At the present time, there is great uncertainty in the business community as to whether registration of a business or company name or domain name creates any legal rights and how such names interact with pre-existing rights, whether or not registered.

The issues paper raises a series of questions such as whether:

• present educative measures are adequate to counter misconceptions about the legal nature of business and company names and domain names;
  
  
• there should be a national business and companies names register;
  
  
• a trademark search should be a precondition to business or company name registration;
  
  
• business names should be abolished entirely;
  
  
• company and business names should be automatically registered (without examination) as trademarks with a second-tier level of protection; and
  
  
• legislation should be enacted to allow business or company name registrations to be challenged and, if so, on what basis.

The ACIP called for comments by March 15.

The issues certainly deserve close attention, not simply because of the business community misconceptions, but particularly because of the piracy issues that impose practical difficulties for IP rights owners in dealing with business and company names, and domain names. At the present time, there is no legislative process that allows for an IP rights owner to challenge the registration by a third party of a company or business name that incorporates or is substantially identical with or deceptively similar to the IP rights owner's trademark.

While raising their own particular administrative and other problems, the suggestions that (i) trademark searches must be carried out as a precondition to company or business name registration, and (ii) IP rights owners be given by legislation the specific right to challenge company or business name registrations, are particularly attractive options. Although previously canvassed, neither of these suggestions has been tried, and each would go a long way, in the author's opinion, to reducing both the levels of piracy and the extent of business ignorance about the rights granted by company or business name registrations.

On the other hand, the concept of a second-tier trademark system is, in the author's view, one that should be strenuously resisted as creating a second class of trademark rights. The lack of examination system would be likely to lead to the registration of many trademarks that would be unenforceable and liable to expungement at the suit of the IP rights owner. This would in fact create even greater uncertainty in the business community.

Indeed, it becomes clear that the suggestion is inappropriate when considering that the raison d'être of company and business names is to allow consumers to identify from a public register who they are dealing with, whereas the system of trademark registration was established to facilitate the protection of trademarks. The two goals are entirely different and the creation of a second-tier trademark registration system linking the two goals is not likely to serve either well.

Stephen Stern, Corrs Chambers Westgarth, Melbourne