A business owner decided to open a new store named “Ten and Under”. He called his Secretary of State’s office to incorporate his company. The agent there said there was already a company with that same name, but kindly offered that he could register the name as a fictitious name. The client did so, proceeded to open his new store, and promptly got a letter from Ten and Under accusing him of trademark infringement and requiring that he change the name of his store. The client asks, what went wrong. I checked and the Secretary of State said I could name the store as I did.
The foregoing is not an uncommon occurrence. What is going on? When the Secretary of State says a company name is available, the Secretary of State is only concerned that there not be two companies in the state with the exact same name. In the above example, the Secretary of State preserved the integrity of the state’s incorporation records by guaranteeing that there are not two companies with the same name. The Secretary of State, however, is not concerned with the possible confusion that my result from two companies having similar, although not identical, names.
A company’s name is its identity, its brand. Companies often spend considerable sums of money advertising their company and building up the good will behind the company name. They will avail themselves of the protections offered by the United State’s trademark laws and obtain Federal trademark registrations for their names (assuming they engage in “interstate commerce”, or commerce in more than a single state, which is generally true). There are Federal trademark laws as well as state trademark laws that companies can rely upon to protect their names.
When a new-comer opens a company with a similar name that provides similar services, as occurred in the example, consumers may be confused into thinking that the new-comer is associated with the original company. The fact that the new-comer was not aware of the original company’s use of the name is not relevant. What is relevant is that consumers might get confused. The original company can then rely on its existing rights to require (and force if necessary) the new-comer to change its name. The need for the new company to change its name, of course, can cause considerable expense to the new company. Further, the notice that a new company has to change its name may not be immediate. It can occur months, and sometimes even years, later, after the new company has built up considerable good will behind the name in its market.
So, what is a new company supposed to do to guard against such possibilities? First and foremost, the new company should do a search to determine if the desired name is available. The new company can even start with its own search if it wants. At a minimum, the new company should review the trademark registrations and applications on file at the United States Patent and Trademark Office (www.uspto.gov). The company can also do an internet search. However, it is advisable that the new company not just rely on its own search if its search leads it to believe the name is likely to be available. Rather, the new company should consult a trademark attorney. The trademark attorney will conduct a clearance search and can provide a professional analysis as to whether a desired name is available. If, in the attorney’s opinion, the name is not available, or adoption of the desired name is risky, then the new company can select a different name. This preventative step can save a company tens of thousands of dollars that might otherwise be required to rebrand itself should it be forced to change its name at a later date.
Similar issues arise with the selection of names for new products. Again, to avoid the need to rebrand a product, the manufacturers, should have a clearance search performed to ensure that their desired product name is available for use. funds, that you cannot be a player on the international patent landscape.