2008-06-28
What’s In A Name? Company Names, Business Name, Domain Names and Trade Marks

Choosing the right name for your new business or company is vital to creating a niche in a congested marketplace and to distinguish your goods and services from your competitors. In effect, you are creating an identity - something both memorable and meaningful. In the market place, names can be both trade marks and business names, company names or domain names. This can be confusing, so it is important to understand the differences.

If your company name, business name or domain name is identical or similar to a registered trademark, you could be sued for infringement.

The Differences Between Business Names, Company Names, Domain Names

A company name must be registered under the Companies Act, 1965 administered by the Registrar of Companies (ROC). If a company wishes to trade using a name other than its registered company name, they can freely use a business name. A business name is a name under which a business operates. In Malaysia business name registration is not compulsory. Domain names are the addresses for sites on the Internet. MIMOS administers the registration of .my (e.g. .com.my, .net.my, .org.my, .edu.my, .gov.my) domain names. MIMOS undertakes searches on company name, business name and trade mark databases for possible infringements before registering a new domain name. To register your trade mark as a domain name in Malaysia, it is not necessarily be the same as your legal entity (business or company name).

A trade mark is a letter, word, phrase, sound, smell, colour, shape, logo, picture, aspect of packaging, or any combination of these. It identifies a product or a service of a business and distinguishes it from similar products and services.

As the owner of a trade mark you have exclusive legal rights throughout the whole of Malaysia to control the use of your trade mark for goods or services for which it is registered. Trade marks can operate without formal registration, however registration entitles the owner of the trade mark to take infringement action against any misuse of the trade mark.

COMPANY’S NAME

Before a company can be registered, a name must be reserved for it under s 22 (1). This reservation must be made in the prescribed form (Form 13A) and is effective for three months. During the period that the reservation is effective, no other company may change its name or be registered with the reserved name: s.22 (9).

The Registrar is directed not to register a company if, in his opinion, its name contravenes one of the prohibitions in s.22 (1), unless the Minister gives his consent. The company will not be registered by a name that is:

(a) undesirable;

(b) a name of a kind, that the Minister has directed the Registrar not to accept for registration. Ministerial directions on what sort of names are not to be accepted will be published in the Government Gazzette: s. 22 (2).

This provision gives the Registrar a very wide discretion. The term ‘undesirable’ was used in the United Kingdom Companies Act 1948, and was based on a recommendation in the Cohen Committee Report 1945. According to that Report, the policy of the section is to permit the Registrar to refuse to register names that are ‘calculated to mislead the public.

However in a Singapore case of Drilex Systems Pte Ltd v Registrar of Companies [1993] 2 SLR 345, Goh Joon Seng J noted that an ‘undesirable’ name is treated distictly in s 22 (1) from a name that is identical or confusingly similar to the name of an existing company or corporation. This implies that the fact that confusion of identity might rise is not ‘undesirability’ for the purpose of this section. There must be something more than this for the name to be undesirable. Any name of an obscene nature, or which might offend a friendly state, or which would offend a public policy or give offence to a section of the public or members of a religious group would be undesirable: South Pacific Airlines of New Zealand Ltd v Registrar of Companies (1964) NZLR 1. For instance the use of word or words which was likely to cause offence to members of various religious groups should ot be allowed: Little v Australian Securities Commission [1996] 22 ACSR 226. The Registrar may consider each name in the light of its own merits and demerits: South Pacific Airlines of New Zealand Ltd v Registrar of Companies (1964) NZLR 1.

Generally, the courts are reluctant to interfere with the Registrar’s discretion in refusing to allow the reservation of a particular name. A writ of mandamus would be issued against the Registrar only if it could be shown that he had not in fact exercised any discretion, or that he had exercised it upon some wrong principle of law, or that he had been influenced by extraneous considerations which he ought not to have taken into account: R v Registrar of Companies [1912] 3 KB 23, 34 per AvoryJ.

Where a company has been registered by a name that offends against the prohibition, the Registrar may direct the company to change its name: 23 (3).

At common law, an injunction could be obtained to prevent one person passing of his business as that of another. The test is whether the named used so nearly resembles the other name as to be likely to deceive: North Chesire & Manchester Brewery Co Ltd v Manchester Brewery Co ltd [1889] aC 83, 84 per Lord Halsbury LC. Thus, if a company is incorporated by a name that is identical to or deceptively similar to that of an existing company or business, the latter may obtained an injunction to restrain the former from using the name. This alternative is open to an aggrieved party if the Registrar allows the registration of a rival company under a deceptively similar name. Fraudulent intent is not an essential element of the tort: North Chesire & Manchester Brewery Co Ltd v Manchester Brewery Co L, ibid; Ewing v Buttercup Margarine Co. Ltd [1917] 2 Ch 1.

Although fraudulent intent is not an essential element, the existence of such an an intent is a factor in considering whether or not the names are likely to deceive persons into thinking that the two companies are connected: Australian Guarantee Corporation Ltd (1951) 51 SR (NSW) 166, 170 per Roper CJ in Eq. The burden of proving that there is a real risk of deception or confusion is on the person who seeks the injunction: ibid.

The registration of a company by the name of an existing foreign company is a common device used to exclude the foreign company being registered within the jurisdiction under its on name. Where such a device is employed, the cout may order that the company’s name be removed from the register: La Societe Anonyme Etablissements Panhard et Levassor v Panhard Levassor Motor Co Ltd [1901] 2 Ch 513; Suhner & Co AC v Suhner Ltd [1967] FSR 319. The order may take the form of an injunction restraining the subscribers and members from allowing the company to remain registered under the name complained of. An aggrieved party has the option of applying to the Registrar to exercise his power under s. 23 (3) to direct that the name be changed or applying to court for an appropriate injunction.

DOMAIN NAME

A domain name is a hierarchically structured character string that serves as an Internet address. The “real” Internet Protocol (IP) address is a string of numbers that is difficult to use and remember (e.g., 128.82.75.52). Internet users rely on domain names, which take the form of memorable and sometimes catchy words, to stand in their place. The uniqueness requirement creates an exclusivity that has important economic consequences—no two users can use the exact same character string as a domain name.

Domain names are interesting—and controversial—because they are meaningful. The semantic dimension allows domain names to act not only as unique addresses, but also as slogans, billboards, or brand names.2 The business identity of many Internet firms, such as Internet guide Yahoo! or book retailer Amazon.com, is solidly linked to their domain names. Even non Internet-based businesses want domain strings that match, or are easily derived from, their corporate names.

The character strings used for domain names sometimes correspond to the character strings of registered trademarks. Often this occurs accidentally. Juno Online Services registered juno.com but the Juno Lighting Company holds a federal trademark on the brand name “Juno.” Sometimes the correspondence is a deliberate result of name speculators.3 It is fairly inexpensive to reserve a name ($35-50/year is the norm), and many character strings may be perceived as more valuable than the going price. Thus, some “cyber-squatters” attempted to make a business out of the practice of reserving desirable names and attempting to resell them to others, sometimes for thousands of dollars. Sometimes the correspondence between a domain name and a trademark is part of a pattern of deliberate passing off, which is intended to confuse or deceive customers.4 There are also numerous gray areas. To the Internet, one minor difference in a character creates a completely different address but to users the difference may be hard to discern. Thus, some small businesses register domain names that are the same as a famous name but with only one minor character difference; e.g., amazom.com or micros0ft.com.

All of these conflicts over domain name rights have resulted in litigation, or threats of litigation, under trademark law. Both the users who registered the name and the domain name registry itself have been targets of such litigation. Internet registries and policy makers have responded to trademark challenges by making or proposing numerous restrictions on the way Internet domain names are distributed or used.

Resolving Domain Name Disputes

A policy for dealing with conflicts relating to trademark disputes has been in place since 1995. Prior to that time, Network Solutions, Inc. (NSI) would not take action regarding Internet domain names unless ordered to do so by a court. Now as part of the Internet domain name registration, an applicant must represent that the registration of the requested domain name will not interfere with or infringe upon another’s rights, and that the domain will not be used for any unlawful purpose. In addition, an applicant must also promise to “defend, indemnify, and hold harmless” the Internet National Information Center (InterNIC) should the applicant be sued because of the registration-related activity. Today when a trademark or service mark dispute over a domain name emerges, NSI will suspend the use of that name until the dispute is resolved in court or by arbitration. While the domain name is on hold, it is unavailable for use by any person or entity.

Warner Brothers threatened Road Runner, an online service whose domain name is roadrunner. com, for trademark infringement, and the Prema Toy company, owners of the trademark on Gumby and Pokey, considered legal action against Christopher “Pokey” Van Allen, a 12-year-old whose web site is www.pokey.org. These examples are but two of the many legal precedents concerning trademark infringement that are applicable to domain name selection. Most attorneys will advise clients that a majority of Internet domain name owners who have been sued by trademark lawyers, and branded “cybersquatters” by unsympathetic judges, have been forced to relinquish their Internet domain name registrations.

As a practical matter, most entities cannot afford to enforce their intellectual property rights or to buy the rights of others. However, consider the fact that Microsoft agreed to pay USD5 million for the trademark usage of the name Internet Explorer to SyNet, a small Chicago-based software firm that held the trademark on the name.

TRADEMARK

A trade mark is used to distinguish the goods or services of one trader from those of other traders. Trade mark registration is not compulsory. However registration of a trade mark gives the registered owner exclusive use of the trade mark throughout Malaysia.

Registration of a business, company or domain name does not in itself give you any proprietary rights-only a trade mark can give you that kind of protection.

The same word(s) may be registered by different people as business names and trade marks. However, the registered trade mark owner can sue the business owner for infringing the trade mark if the business name owner uses it on goods or services similar to those covered by the trade mark registration.