News & Insights

The not for profit sector can be tricky from a trade mark perspective, as illustrated by a news article earlier this month. A dispute has arisen between Pauline George, who registered the business name “Voices of Casey” in September 2018, and Play It Forward Australia Pty Ltd (PIFA) which registered the business name “Voices of Casey Choir” in August 2020.

PIFA is a company associated with Dr Jonathan Welsh, who was involved with the Voices of Casey Community Choir. Ms George is challenging the registration by the Australian Securities and Investments Commission (ASIC) of PIFA’s “Voices of Casey Choir” business name in the Administrative Appeals Tribunal (AAT).

Like a good chorister, let’s take a breath and unpack that.

the role of business names

A common misconception is that a business name registration grants exclusive rights to a name.  That appears to be Ms George’s expectation, judging by her AAT action. In fact, business name registrations are consumer-protection devices. When somebody carries on business under a name other than their legal name, they must register that business name with ASIC. It allows others to identify the legal person with which they are dealing.

A business name does not by itself give the registrant the right to prevent somebody else from registering or using a similar business name.  The Business Names Registration Act 2011 does prohibit the registration of identical or nearly identical names, however ASIC’s view would appear to be that “Voices of Casey Choir” doesn’t fall foul of those restrictions.

how to protect a name

Rather than seeking to protect a name through business name registration, there are options that actually work:

• registration of a trade mark gives a right to bring infringement proceedings against anybody who uses a substantially identical or deceptively similar name, in relation to similar goods or services, services that are closely related to those goods, or in relation to goods that are closely related to those services;
• reputation gained through use can give rise to goodwill that can be protected through a common law action for passing off. A similar action can also arise under the Australian Consumer Law for misleading or deceptive conduct.

Trade mark registration gives Australia-wide rights. Reputational rights normally take years to arise and only extend as far as the reputation. Depending on the basis of the goodwill, reputational rights might therefore be geographically limited.

the difficulty for not for profits

While these issues are true for any organisation, things can get a bit more complicated for Not For Profits.

While Voices of Casey Inc was incorporated as an association in September 2020, both business names were registered before this time. The issue of timing raises the question: for whose benefit did the goodwill in the name “Voices of Casey (Choir)” arise? Did the goodwill arise for the benefit of Ms George as the choir’s manager, for Dr Welch and his company, or instead collectively for all the members of the choir?

With unincorporated NFPs, it can be difficult to know who actually owns the goodwill and is entitled to register the trade mark to which the goodwill relates. Depending on the circumstances, it could be the founder, the committee of management or the entire membership – this issue is critical. A wrongly based legal claim can be thrown out of court at considerable cost and a trade mark registered in the wrong name is invalid and can be opposed or revoked.

is it in trade or commerce?

Another question for NFPs is whether they are actually operating in the field of trade or commerce.

Section 17 of the Trade Marks Act 1995 (Cth) states:

“A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.”

Under section 18 of the Australian Consumer Law, misleading or deceptive conduct is actionable only if it occurs “in trade or commerce”.

Trade or commerce does not mean that it must be for profit. A non-profit choir that sells recordings or gives ticketed concerts is probably engaged in trade or commerce. It is still trade or commerce even if ticket sales only ever cover part of the cost and choir members must top up costs from their own funds.

A group of people who come together to share a love of singing may not be acting in trade or commerce. If an NFP is not engaged in trade, their first use of an (unregistered) name would make it much harder to oppose a later application by somebody else to register an identical or similar trade mark. Even if the NFP does register its trade mark, it is at risk of being cancelled for non-use if it is not used in trade.

It may therefore be harder for such a non-trade, for purpose entity to protect its name.

take-away points

NFPs need to take note that:

• registration of a trade mark is the most effective way to protect against its misuse by others; and
• for an unincorporated NFP particular care needs to be taken to determine ownership of the trade mark prior to applying for registration, in order to avoid invalidity.

The Macpherson Kelley Not For Profit and IP teams are able to assist NFPs to properly structure their organisation and protect their valuable IP by registering their trade marks.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.