The name under which a business is conducted is often the best known or most visible symbol used by consumers to identify the products or services of the business. It’s therefore very important to the successful marketing of a product or service to protect the valuable asset of a trading name.
Such protection may ordinarily be obtained by means of a company name and/or trade mark registration. This makes it worthwhile for business people to understand the key differences between the two.
If a business wants to use a company as its trading vehicle, the name under which it is to be registered must comply with the criteria in the Companies Act, 71 of 2008. The most important requirement is that the proposed company name must not be the same as or confusingly similar to the name of another company or close corporation, or a trade mark belonging to another person.
Historically, the test has been whether the proposed company name was ‘undesirable’ or ‘calculated to cause damage’. If a name was deemed likely to cause confusion it was considered to be calculated to cause damage, and was therefore undesirable.
A company name registration results in relatively restricted rights. It only serves as a bar to registration of any other confusingly similar company name. It does not allow the owner of the company name registration to object to the use of a similar name, say, as a label for products or as a trading style. This is generally where trade marks come in.
Strengthen your name
A trade mark is defined as ‘a mark serving the purpose of distinguishing products from the same kinds of products offered by any other person’. Registration of a trade mark allows the proprietor to stop / control unauthorised use of a mark which is confusingly similar or identical to the registered trade mark in relation to the same or similar products.
Unlike a company name registration, a registered trade mark is particularly designed to enable the registered owner to prevent others from using a similar trade mark in the course of trade, provided that there is a likelihood of confusion.
This is in addition to the capacity of a registered trade mark to block a later (proposed) entry on the Trade Marks Register where there is a likelihood of confusion. In this sense registered trade mark rights are stronger and wider than the rights in a company name registration.
Understand the limits
There are, however, limits to registered trade mark protection. For instance, a registered trade mark is not infringed by –
- any bona fide use by a person of his own name or the name of his place of business;
- the use by any person of a bona fide description of his goods or services;
- bona fide use of the trade mark to identify spare parts;
- importation into or distribution or sale in the RSA of genuine goods; or
- use of any identical or confusingly similar trade mark which is already registered.
An application for a company name registration requires lodging a prescribed form at the Companies and Intellectual Property Commission. An applicant is entitled to list up to four alternative names which are considered for availability in their listed order.
Only the first available name is registered. A trade mark registration, on the other hand, generally first involves a conducting a registrability search on the Trade Marks Register to determine if there are any prior marks which may conflict with the proposed trade mark. The proposed trade mark is then applied for registration if the search does not reveal any conflicts.