The Personal Properties Security Register and your business

We have previously written about the Personal Properties Securities Register (PPSR). The PPSR allows businesses to register security interests over personal property, giving them rights over the personal property in exchange for the security of payment or the performance of a particular obligation.

Personal property is property that is not land, buildings, or fixtures. Personal property can be items such as machinery, stock, shares, debts, or even rights under a contract.

As previously discussed in the past these security interests would have been registered on a number of separate registers, such as with ASIC (if the security interest was over shares), or with REVS (if the security interest was a motor vehicle). The PPSR now streamlines all of that into one central register.

The PPSR also allows businesses or individuals to check whether the personal property they are purchasing have a security interest over them. This can provide potential buyers with a way how to double check and make sure that when the transaction is completed, the purchaser will have full rights to own the personal property. If there is a security interest attached to the car, then the vendor may not actually have the right to sell the car – but in the worst case scenario, the owner of that security interest (for example, the finance company who loaned the money for the car) can repossess the car if the loan has not been paid.

Because there is now a central register noting down all security interests, as a small business it should be theoretically easier to offer your plant and equipment / machinery as security for a loan, as it is easier for the bank to check if the equipment or machinery is either owned by someone else, or if someone else has already lodged their security interest on the equipment.

If you are a small business who sells goods on credit, you should consider registering your security interest on the goods, so that if your debtor does not pay your outstanding amount, you may try to repossess the goods. If you rent or lease out machinery and equipment, it might also be a good idea to register your security interest on the machinery and equipment.

For a small fee, the PPSR can be searched for a fee via http://www.ppsr.gov.au. If you are a small business, you should consider incorporating the PPSR and its features into your business processes!

Cybersquatting!

We were recently asked to address a question involving cybersquatting. Cybersquatting is a controversial practice where an individual or a business registers an internet domain name (the website address) that someone else may have an interest in. The “cybersquatter” then often refuses to do anything… until they have been paid, of course.

This sort of behaviour often arises from the “first come first serve” nature of the domain name registration system, as well as the relative ease and low cost of registering a domain name. Cybersquatters often register a large number of domain names that other people may have an interest in, and then auction them off or sell them for a higher price than the price of the registration.

Over the last decade or so there have been a number of high profile cases where this sort of behaviour took place. In the 2000s, websites such as “madonna.com” and “singaporeairlines.com” were occupied by alleged cybersquatters. In 2004, the rapper Eminem won a case against a cybersquatter. There were disputes over “juliaroberts.com” and “jimihendrix.com”.

This practice still continues. As a small business, you might have encountered such practices in the past, or you may be a target of cybersquatters. If something like this does happen to you, you can take some action through the WIPO’s Uniform Domain Name Resolution Policy or, if the domain name ends with “.au”, the .au Dispute Resolution Policy.

An example of a complaint would be one where you have registered a business or a trade mark within Australia, and the “cybersquatter” registered the domain name, in bad faith, some time after you registered your business or your trade mark, and has no intention of using it in any way.

The UDRP or the .auDRP have some remedies, such as cancelling or transferring the domain name registration. Unfortunately the process requires putting together sufficient evidence to support your case, does take some time, and may not be cost effective – you also are unlikely to recover legal costs spent to pursue this.

In the alternative, complainants may lodge a complaint saying that the person who registered the domain name is not eligible to register that name – however this would likely result only in the revocation or cancellation of the registration.

Because the internet is such an important aspect of small business these days, it is very important to plan ahead for these things. Before starting up, you should check out if the domain name related to your brand or your company is taken. Even if you have no intention of putting up a website immediately, you should take steps to preemptively block out or register domain names related to you or your business. For a small cost, this will likely save you the hassle of going through the lengthy dispute resolution process that you would have to go through if you didn’t do these from the beginning.