Trademark clashes reveal a costly misconception: business name registration does not equal trademark rights. Excel V. Dyquiangco explains how this mistake fuels disputes and how companies can avoid it.

On August 4, 2016, Kirloskar Proprietary Limited, a company known for its engineering products, filed a case against Kirloskar Green Pvt. Ltd. in India for using the name “Kirloskar.” Although the latter later changed its name to Indra Trade Links, authorities ruled that using the trademark earlier without approval was still an infringement because it could mislead the public into thinking the businesses were connected. As a result, the company was ordered not to use the word “Kirloskar” in any of its business activities and to operate only under its new name.

In another case, in Nepal, hotel conglomerate Hilton Worldwide Manage Limited filed a complaint against Hilton Academy Pvt. Ltd. for using “Hilton” in its company name, which could confuse people and make them think the academy was connected to the hotel brand. Because of this, the company was ordered to stop using “Hilton” in its name and business operations and to follow the necessary changes required by the authorities.

In Singapore, the dispute between Singapore Professional Golfers’ Association and Singapore Senior PGA LLP resulted in the Singapore Court of Appeal ruling that the names were too similar and likely to confuse the public. It said the word “Senior” could make people think the new group was a branch for older golfers, while “LLP” might suggest it was formally connected. The court therefore found the name misleading and ruled that it amounted to passing off.

“Taken together, these decisions reaffirm a consistent legal principle: registration of a company name does not override prior trademark rights,” said RC Subedi, founder and managing partner at Apex Law Chamber in Kathmandu. “Where a registered trademark is incorporated into a later business name without authorization, and such use creates a likelihood of confusion or false association, the department will intervene to protect the exclusive rights of the trademark proprietor and restrain overlapping use.”

Different business names

In Nepal, a business name is the official legal name registered with the Office of Company Registrar (OCR) under the Companies Act 2063. It establishes the company’s legal identity for contracts, taxes and compliance but does not protect the brand in the marketplace. A trademark, under the Patent, Design and Trade Mark Act, 2022, identifies and distinguishes goods or services, granting exclusive rights against infringement.

In short, registration is essential for legal recognition and protection of both business names and trademarks.

“While the business name secures legal existence, a trademark protects brand identity, reputation and market exclusivity, making it essential for safeguarding products or services in Nepal,” said Subedi.

For Ruby Tham, a director at Drew & Napier in Singapore, registration of a company or business name allows the registrant to legally trade in Singapore.

“Registration will only block a later registration of a company or business name that is identical to the registered name. It does not prevent registration of a ‘similar’ business or company name. For example, a registration for ‘XYZ Hospitality Pte Ltd’ will be permitted even if the name ‘XYZ Hotel Developments Pte Ltd’ is already registered,” she said.

She added: “Importantly, registration of a company or business name does not confer trademark rights in the company or business name. Thus, the registrant may not rely on the registration of a company or business name to prevent the use or registration of the identical or similar name as a trademark by another party or to defend against a claim of trademark rights infringement.”

“A trademark registration gives the owner exclusive rights to use the registered trademark and provides a defence to trademark infringement. A proprietor of a registered trademark also enjoys the right to prevent the use or registration of the identical or similar name as a trademark by another party,” she said.

In Australia, a business name must be registered with the Australian Securities and Investment Commission, or ASIC, if a business trades under a name other than an individual’s personal name or a company’s exact legal name.

“Registration allows the business to legally trade under that name but does not confer any proprietary or exclusive rights or prevent others from using or registering similar or identical names,” said Jonathan Feder, a partner at K&L Gates in Melbourne.

He added: “Trademarks, unlike business names and trade names, function as a badge of origin, distinguishing the goods or services of one trader from those of other traders. Unlike business and trade names, a registered trademark provides the owner with exclusive rights to use the mark in relation to the specific goods and services for which the owner is claiming. The difference is that a registered trademark can be enforced to prevent other traders from using the same or similar mark in connection with the same or closely related goods or services.”

Overlapping business names

“Overlapping business names in Nepal can cause confusion among customers, suppliers and regulators, affecting reputation and commercial goodwill. Since business name rights only protect the legal entity, disputes may arise if similar names are used for products or services. Resolution typically involves checking registrations with the OCR, negotiating name changes, or filing objections. In such cases, registered trademarks usually prevail in the marketplace, as they grant exclusive rights for specific goods or services, even over similar business names,” said Subedi.

He noted that a common mistake growing companies make in Nepal is failing to check existing trademarks before registering a business name. “For example, a local company registered ‘Mor Surf Udhyog,’ while ‘Surf’ is a registered and well-known trademark in India and Nepal. The proprietor is wrongly attempting to use ‘Surf’ as a generic term for detergent. To avoid such issues, companies should conduct thorough OCR and trademark searches, select distinctive names, and seek expert legal advice to ensure compliance and protect their brand.”

Tham, meanwhile, said: “A registration of a company or business name does not provide a defence to a trademark infringement or passing off claim. Thus, in some cases, use of a company or business name that is identical or similar to a registered trademark may give rise to liability for trademark infringement or the tort of passing off.”

She added that a frequent misconception is that registration of a name as a company or business name in one jurisdiction automatically grants the right to use that name as a trademark either in that jurisdiction or internationally.

“In reality, company or business name registrations and trademark registrations are separate regimes,” she said. “Securing a company or business name registration in one jurisdiction does not mean that the name is available to use as a trademark in the same jurisdiction, much less internationally. This misconception can expose the company to unexpected infringement claims and lead to wasted costs and effort.”

She said: “To mitigate such risks, companies should – before launching, marketing or selling a product or service – conduct trademark clearance searches in the target jurisdictions and where the name is available, apply to register it as a trademark as early as possible to secure priority and protection for the name.”

According to Feder, a common challenge is businesses thinking they are in “the clear,” simply because a competitor in the same or similar industry has not registered their trademark. “Even without registering a trademark, a business may still take action under the Australian consumer law for misleading and deceptive conduct and via the tort of passing off under the common law,” he said.

Another challenge is when there are overlapping business names, with one business registering its mark and the other not. “In these situations, the registered trademark owner typically will allege trademark infringement, often leading to costly disputes that could have been avoided had appropriate trademark searches been done and registered trademarks obtained,” he said.

“While some may assume a registered mark will always prevail,” he noted, “Australian trademark law recognizes ‘first use’ as an exception to trademark infringement, allowing a party to establish superior rights where it can prove prior and continuous use of a mark, even if another party registers the mark first. This means a registered business will be able to resist an infringement claim and assert superior rights through prior use, even where another business has registered their mark.”

Rectifying the misconceptions

While companies often make avoidable errors when registering their business names, particularly as they grow, expand, restructure, or decide to invest more heavily in their brand, it is important to point out some mistakes they make. According to Feder, the first is confusing business name registration with brand protection.

“A common misconception is that upon registration, the business name holder acquires ownership and exclusive rights in that name.  To avoid these issues, companies should familiarize themselves with the different forms of IP brand protection, particularly the nuances between registering a business name and registering a trademark, before deciding to register a business and should file a trademark as early as possible. In Australia, filing for registration takes a minimum of seven to eight months, so it is best to file as early as possible,” he said.

Next is its failure to conduct trademark searches before choosing a business name. “This can possibly result in inadvertent trademark infringement, force a business to rebrand or, at worst, forfeit their brand entirely, incur significant costs as a result and have potential infringement proceedings issued against them,” he said. “This all can be avoided by performing trademark clearance searches and taking other due diligence steps prior to registration.”

Third is delaying trademark registration until the business becomes profitable. “This increases the risk that another party may register the business name as a trademark first and acquire exclusive rights for that brand. While the registrar takes the value that the person applying for registration to be the owner of the trademark, this can be displaced by proving first use,” said Feder. “However, the evidentiary requirement for proving when someone first used a mark can be burdensome for businesses, requiring extensive evidence of how the mark has been used over time and adding cost to the registration process. This can be avoided by filing for registration as early as possible.”

Fourth is registering the trademark in the name of the wrong person. “This is quite common, particularly as corporate structures change and evolve over time. It is important that a person or company intending to use the trademark or who has used the trademark files the trademark.  It is not possible to rectify this later.  If a trademark is not filed in the name of the true owner, it is not possible to fix this later, and the mark may be subject to successful opposition or cancellation,” he said.