The game changer: This is why you should register your business trading name as a trade mark…ASAP!
22 Feb 2021
What is a registered company name?
A registered company name is the name which has been reserved, registered and been afforded a registration number by the Companies and Intellectual Property Commission (“the CIPC”).
In terms of section 11 of the Companies Act, the name of a company may comprise of words in any language together with any words or letters, numbers, symbols and/or punctuation marks.
However, the name of a company may not be:
- the same as another company;
- a name registered for the use of a person as a business name in terms of the Business Names Act;
- a registered trade mark belonging to a person other than the company; or
- a mark in respect of which an application has been filed in the Republic for registration as a trade mark or a well-known trade mark as contemplated in section 35 of the Trade Marks Act.
The Companies Act also prohibits the registration of a company name that falsely implies or suggests, or would reasonably mislead a person to believe incorrectly, that the company is part of, or associated with, any other person or entity.
What is a trading name?
It is common practice for entrepreneurs to trade under a different name to their registered company name and there is often a risk that their trading name infringes on various other trading names and/or trade mark registrations and applications, without them even knowing.
For this reason the Consumer Protection Act (“the CPA”) in sections 79 to 80, introduced changes to the way in which entrepreneurs may use “trading as” names or “business names”.
Sections 79 provides that a person must not carry on business, advertise, promote, or offer to supply any goods or services, or enter into a transaction or agreement with a consumer under any name except:
(a) the person’s full name as—
(i) recorded in an identity document or any other recognised identification document, in the case of an individual; or
(ii) registered in terms of a public regulation, in the case of a juristic person; or
(b) a business name registered to, and for the use of, that person in terms of section 80, or any other public regulation.
Section 80 sets out the procedure in registering the business name of a company. However, the business names registry and the registration process in terms of the CPA have not yet been established.
What would the effect be when sections 79 to 80 become operational?
These sections will only come into effect on a date to be determined by the Minister of Trade and Industry and published in the Gazette. When the provisions come into force, a person may not use a trading name unless recorded on the business names register as maintained by the CIPC.
Does “any other public regulation include” the trade marks Act?
Yes, it absolutely does. In order for you to ensure your trading name or business name stays enforceable, it is recommended that a trading name or business name be registered as a trade mark. By doing this you will ensure statutory protection for your business name and will avoid having to change your name or register your name as a business name when the above sections of the CPA come into force because you can use your trade mark as a means to adhere to section 79 of the CPA.
Note that a trade mark registration provides a far stronger right than an ordinary company or business registration, as a trade mark registration can be relied upon to prevent the unauthorised use or registration of an identical or confusingly similar trading name, trade mark, business name or domain name simply by adducing evidence of the trade mark registration, as opposed to having to rely on common law trade mark rights which require proof of, for example, a substantial reputation in the relevant market, which is far more onerous to prove.
See also:(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)