Published: Mon, Oct 20th, 2014 by Mike Newdick
The reputation of your business may be its most valuable asset. You have worked hard to develop your brand, so it makes sense that you also know how to protect it.
In New Zealand you can call your business anything you like. That name is known as a Trading Name. Trading Names are not registered, meaning it is quite possible that other businesses can use the same name, which may cost you customers. So, what can you do to prevent another business from using your Trading Name?
Companies Act 1993
Many people incorporate a company to own their business. A company name cannot be identical or nearly identical to another, however, this does not prevent someone from using a Trading Name similar to your own.
Registered Trade Mark
Your Trading Name can often be registered as a Trade Mark with the Intellectual Property Office of New Zealand (IPONZ). IPONZ runs a central register, providing you with clear evidence that you own that Trade Mark and an effective deterrent to others seeking to use that name. To register as a Trade Mark, your Trading Name needs to be capable of being represented graphically and must distinguish your goods or services from anyone else’s. This can mean if your name is too generic (i.e. ‘Wellington Lawyers’) your application will probably be declined. A registered Trade Mark provides you with all the remedies of the Trade Marks Act 2002. This can potentially allow you to recover damages, lost profits and litigation costs where someone is infringing on your Trade Mark.
Fair Trading Act
The Fair Trading Act 1986 (‘FTA’) provides you with some protection, relying on the provision that “No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.” By way of example, Airport Rentals Limited, trading as ‘Airport Rentals’ were able to rely on the FTA and obtain an injunction to prevent a competitor from using the name ‘Airport Car Rentals’ within 50 km of Christchurch Airport, as it was likely to mislead customers. However, it is not always this simple. Courts are not willing to grant injunctions that restrict conduct without sound evidence. While it seems like a simple question - how do you demonstrate that a business Trading Name similar to your own is actually likely to deceive? In a similar case to ‘Airport Rentals’ discussed above, Diesel and Turbo Service Centre Limited were unsuccessful in their application for an injunction to stop a competitor down the road trading as ‘Diesel and Turbo Auckland’.
Passing Off is a common law remedy that can be used where a competitor’s goods or services are wrongly represented as being yours. For example, Coca-Cola recently brought an action of Passing Off (amongst other things) against the New Zealand distributor of Pepsi for using a similar shaped bottle, claiming that it was a misrepresentation that damaged the Coca-Cola brand and was likely to deceive customers. The claim failed, with the Court finding that Coca-Cola was such a well-known brand in New Zealand there was little chance of customer confusion.
The best approach may be to rely on all of the above methods to protect your Trading Name. Registering a Company and a Trade Mark can act as an effective deterrent, but it may still be necessary in some circumstances to seek enforcement using the above remedies to protect your brand.