Are you enti­tled to trade under your own name?

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.