Why Conduct Brand Clearance Searches? Having a Company, Business or Domain Name is Not Enough
Many people operate on the misconception that, because they have registered a company name or a business name (or even a domain name), they have the unfettered right to use that name in trade. This misconception is understandable. Afterall, if the New Zealand Companies Office or the Australian Securities & Investements Commission (ASIC), for example, decides that your company or business name is sufficiently different to an existing company or business name registration, why shouldn't you be able to use that name?
Unfortunately, neither the New Zealand Companies Office nor ASIC review the Trade Marks Register for prior rights before granting a company name or business name registration. In any event, the test for whether a company or business name is too similar to an existing company or business name is far more lenient than the test as to whether two trade marks are too similar. For company and business name registrations, minor differences can be enough to distinguish one company or business name from another. However, the same cannot be said for trade marks.
Further, existing, unregistered rights (not registered as a trade mark) in a particular name are not taken into account by the New Zealand Companies Office and ASIC in the company and business name registration process.
All this means that it is entirely possible (and this happens frequently) that a company or business name is registered in the face of pre-existing trade mark rights that, when enforced by the owner, can and do prevent the holder of the company or business name from using the company or business name in trade. If the holder of the company or business name registration only finds out about these other, pre-existing rights late in the piece, the holder is unexpectantly faced with:
rebranding, and re-educating consumers about the new brand (meaning extra, significant costs);
paying the trade mark owner a settlement figure; or
worse, facing infringement proceedings and having to pay the trade mark owner damages (not to mention significant legal fees).
So, it is best to conduct brand clearance searches prior to commencing use of a brand in trade. This helps to identify existing trade marks that may have been an issue had you commenced use of a particular brand without conducting searches. Identifying those potential issues at the outset can help to save on the cost of a rebrand at a later point in time or, worse, having to engage in expensive and time consuming litigation.