Government launches initiative to raise awareness of trademark rights

Owners of Australian trademarks are very aware of the problems which arise because of the common misunderstanding that a business name registration provides a form of IP right. Under a new initiative announced by the Australian federal government, traders will be able to apply for an Australian Business Number (ABN) as well as state and territory business names via an integrated online registration system. The initiative also aims to increase awareness of and education about trademark rights by allowing traders to conduct trademark searches as part of the business name registration process.

The initiative is a response by the Australian government to the report "Rethinking Regulation: Report on the Taskforce on Reducing Regulatory Burdens on Business (Banks Report)". The report recommended, among other things, that the Australian government work with the states and territories to develop a national, streamlined registration process for Australian businesses. (Recommendation 6.4).

At present, business owners must apply for a business name from state and territory governments and an ABN from the Australian federal government. By contrast, the initiative will create an online one-stop-shop for registration processes, reducing the compliance burden on small business and allowing common data to be captured with ease. The project will be developed by the Small Business Ministerial Council at a cost of A$89.2 million over 10 years.

A prime objective of the initiative is to increase the profile of IP rights among small business owners. Indeed, the initiative takes on special significance when viewed in light of the 2006 report prepared by the Australian Advisory Council on Intellectual Property (AIPC) - "Review of the Relationship between Trademarks, Business Names and Domain Names". The report found that a significant proportion of traders do not understand the differences between, and rights associated with, trademarks and business names. The report also found that the confusion surrounding these identifiers has the potential to result in commercial uncertainty and costly legal disputes.

Business names ensure that consumers and other businesses can identify the person or entity with whom they are trading. However, evidence gathered by the AIPC found that many traders do not understand the purpose and function of registering business names. In particular, the AIPC found that traders had little comprehension of the objective behind business name registration, or mistakenly believed that registration conferred a proprietary right or interest in the name, similar to that conferred by a trademark.

According to the AIPC, this lack of understanding has several consequences. Traders tend to believe that registration confers an exclusive right to the business name, and thus immunity from claims brought by trademark owners in relation to the same name. In addition, traders are less likely to conduct thorough searches of common law and registered trademarks before they embark on their business venture. The result: some traders are faced with infringement claims from existing common law and registered trademark owners. The trader may then incur significant legal and re-branding costs, as well as having to pay compensation to the party whose IP rights have been infringed.

By allowing business owners to conduct trademark searches on the same system, which allows for ABN and business name registration, the above problems will hopefully be addressed or, at least, reduced. Business owners should welcome this initiative - one which will surely save them both time and money.

Lisa Ritson and Leonardo Pedavoli, Blake Dawson Waldron, Sydney