If you own a cafe, you have likely spent a significant amount of time thinking about how best to market and grow your business. One question you may have asked is whether or not you should register your cafe name as a trade mark.
Whether you should trade mark your business name and/or logo depends on a number of factors, including what stage of development your business has reached and how competitive your industry is.
This article sets out the differences between the protections a trade mark and business name affords. We also look at what situations a cafe owner would benefit from registering their mark.
A business name is, quite simply, the name under which your business trades. If your business operates under a different name to the legal entity that owns the business, then you are legally obligated to register the name under which you trade. For example, if the legal entity that owns your cafe is called ‘Bob Coffee Owner Pty Ltd’, but customers know your store as ‘Bob’s Java Place’ then you would need to register the name ‘Bob’s Java Place’.
What is a Trade Mark?
A trade mark is a ‘badge of origin’. Customers can identify your business in the marketplace through your unique brand. Trade marks are often logos, but can also be business names, catchphrases, scents, etc. You are likely familiar with well-known trade marks such as:
- McDonalds’ golden arches,
- Nike’s tick, and
- Brand names Cadbury and Starbucks.
Just by using a business name and/or logo you can obtain common law trade mark rights as well as some statutory protection under the Australian Consumer Law, but this will depend on the extent/duration of the use and how well-known you are in the market.
What’s the Difference?
A registered trade mark provides the owner with exclusive rights to:
- use the mark, and
- authorise others to use the mark.
This means that, unlike those who have merely registered their business name, a cafe owner with a registered mark can stop someone from registering a similar name or logo. Imagine that ‘Bob’s Coffee Owner Pty Ltd’ has registered the name ‘Bob’s Java Place’ as a business name, but not as a trade mark. Another cafe owner then begins using the name ‘Bob’s Java Place’ and registers the cafe name as a trade mark. That cafe owner could likely prevent Bob from using the name, despite the fact that Bob had been using it first.
It’s important to note that the business that has registered the trade mark, ‘Bob’s Java Place’ may only be able to exclude competitors operating in a similar market to themselves from using the name. If, for instance, a software programming business decided to use the name ‘Bob’s Java Place’ it is unlikely that the cafe owner with the registered trade mark could prevent them from doing so.
This is because trade marks are registered and operate in relation to relevant classes of goods or services. There are 45 classes of goods or services for registered trade marks. A cafe is likely to be registered under Class 43 which includes, ‘services for providing food and drink’.
When Should You Register a Cafe Name as a Trade Mark?
Given the above, it might seem sensible to register your cafe name as a trade mark as soon as possible. After all, what if someone else registers your trade mark and then excludes you from using it? However, you need to consider a number of factors.
How Developed is Your Cafe?
If your cafe is in the early stages of development – for instance, you haven’t yet found a premises from which to operate – then it might not be worthwhile for you to trade mark your business name just yet. This is because you may have other legal needs (such as leasing advice) you need to prioritise.
Alternatively, if your cafe is well-established, has been around for years and has received write-ups in major lifestyle publications, then it’s likely that your business’ name is extremely valuable. Your name will have an established reputation with customers and rebranding could result in a significant loss of goodwill. It would be prudent for you to safeguard yourself by registering your cafe’s business/trading name as a trade mark.
How Competitive is Your Market?
The other thing to consider is the nature of the market in which your cafe operates. Is it a highly competitive market, with new cafes regularly cropping up? Or is it a quieter market, where new business openings are rare? If you answered yes to the first question, it would be worthwhile to consider registering your cafe’s name as a trade mark.
If you are operating in a smaller, slower-paced market, it is less likely that a competitor will, intentionally or unintentionally, use your name and trade mark registration may seem less important.
Whether or not you should apply to register your cafe name as a trade mark depends on both your business and the nature of the market. If your cafe is in its early stages and/or you are operating in a less competitive market, you may choose to delay trade mark registration as you focus on growing your client base.
If, however, your business is well-established and your name sparks positive recognition among customers, you should consider trade mark registration. Similarly, if you operate in a competitive market, applying for a trade mark is more important as a safety precaution, as competitors are more likely to copy your name.