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15 May 2017 Are you entitled to trade under your own name?

By Eric Ziehlke, Partner

You sometimes hear people say that they have a fundamental right to trade under their own personal name.  There is some truth in this belief but there are important restrictions to such an alleged right.

There is a qualified common law defence of "use of one's own name" against an action for passing off and related statutory breaches.  However, in Parker-Knoll Limited v Knoll International Limited (1962) RPC 265 it was generally established that notwithstanding the above common law defence:

            "No man is entitled to describe his goods so as to represent them as the goods of 
             another."

In trade mark law that is a specific defence against a trade mark infringement action under Section 122(1)(a) of the Trade Marks Act which permits:

            "use in good faith of the defendant's own name..."

A defendant would be acting "in good faith" if the defendant "honestly believes that no confusion will arise and is not intending to wrongfully divert business".  Mantra Group Pty Limited v Tully Pty Limited 86 IPR 19.

It is therefore clear from common law and trade mark law that an individual is not entitled to trade under his/her personal name if in doing so he/she is thereby misappropriating the reputation of or diverting business from another trader.  This legal situation has particular significance for individuals who trade under their own personal name as professionals such as lawyers, accountants, architects etc. Issues of ownership of that trading name can arise if a professional allows others to take up equity in an entity trading under that professional's personal name.  Unless there are legal provisions to the contrary, that entity may become the "true owner" of that name for the relevant services which the entity provides, rather than ownership vesting in the individual whose personal name the entity carries.

Prominent individuals such as sporting identities should also be careful where they set up foundations or engage in sponsorships which may involve an assignment of their personal name in some format to another party.  It is wise for such individuals to non-exclusively license their personal name to the other party for set periods, rather than irrevocably assign to that party any rights in their personal name.

Your good name can constitute valuable commercial property, so ensure that you use it carefully.

Eric Ziehlke, Partner  |  Phone: +61 2 9233 5544  |  Email: ejz@swaab.com.au

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This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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