Contrary to what many business owners believe, registering a business or company name with the Australian Securities and Investments Commission (ASIC) does not provide exclusive ownership of that name.
So, what is the difference?:
- A business/company name registration simply allows a company to operate under that name. It does not prevent other businesses from using a similar name.
- Trade mark registration, however, is different. When a trade mark is registered through IP Australia, the owner gains exclusive rights to use the mark for specific goods or services.
How trade mark classes work
Trade mark registrations are organised into 45 classes, each covering different categories of goods or services.
For example:
- Class 25: Clothing
- Class 35: Advertising and marketing services
- Class 41: Education and training services
Two businesses may use the same or similar name if their trade marks exist in different classes and markets. Ultimately, the test is whether there is a likelihood of confusion between the brands. If there is no likelihood of confusion between them, then it is likely they can co-exist in the marketplace.
Real-World Example
A common illustration is the name “Delta.”
- Delta Airlines operates in the aviation industry.
- Delta Faucet manufactures plumbing fixtures.
Although they share the same word, they operate in completely different industries, so consumers are unlikely to believe the companies are related.
When Similar Names Are Allowed
Two businesses may legally use the same name if:
They operate in unrelated industries – Consumers are unlikely to associate the businesses with each other.
There is no risk of consumer confusion – The brands target different markets or audiences.
The trade marks are registered in different classes – Trade mark rights are limited to the goods and services specified in the application.
When Similar Names Can Lead to Legal Problems
Even if businesses operate in different industries, conflicts can arise when there is potential consumer confusion.
Situations that can create legal issues include:
Closely related industries – For example, a fitness brand and a sportswear brand using the same name.
Strong or famous trade marks – Well-known brands often receive broader protection.
Expansion into overlapping markets – If one business expands into the other’s industry, conflicts may occur.
The Risk of Brand Expansion
One major consideration is future growth. A business might initially operate in one industry but later expand into related services.
For example:
A company named “Summit Tech” operating as an IT consultancy might later develop software products. If another business already owns the trade mark in software categories, conflicts could arise.
This is why trade mark strategies are key at an early stage of the brand development process and can often include filing in multiple relevant classes to protect future growth.
Why Trade Mark Searches Are Essential
Before choosing a business name, it is always a good idea to conduct a comprehensive trade mark search. This will help identify whether there are existing trade marks that are the same or similar to your trade mark, whether there are potential conflicts in related industries or risks of further expansion conflicts.
Without proper searches, businesses may unknowingly adopt a name that exposes them to legal disputes or rebranding costs.
How Businesses Can Protect Their Brand Name
To secure stronger brand protection, businesses should take the following steps:
Register a trade mark early – Trade mark rights are generally granted to the first applicant.
Choose a distinctive brand name – Unique names are easier to protect and enforce.
Register in relevant trade mark classes – Consider both current services and potential future expansion.
Watch for new trade mark applications that are the same/similar to your trade mark – Businesses can oppose applications that are confusingly similar to their brand.
FAQs
Can two companies have the same name in Australia?
Yes, if they operate in different industries and there is no likelihood of consumer confusion.
Does registering a business name stop others from using it?
No. Only a registered trade mark provides exclusive legal rights to a brand name.
Can I trade mark a name already used by another business?
Possibly, if the existing business operates in an unrelated industry and there is no risk of confusion.
What happens if two trade marks conflict?
The earlier trade mark owner may oppose the application or take legal action to protect their rights.