The #1 Gigantic but Common Mistake People Make Choosing a Name for a Business

When choosing a name for your business (or blog, product, or service), there are many things to consider. For instance, you may want your name to clearly describe what your business does. So you might like “Marketing Specialists of Las Vegas.” This clearly explains that you provide marketing services in Las Vegas. Other people may prefer more creative names. A good example of this is “Google.” Obviously we all know that’s what it is now, but you saw a company named Google before it became famous you probably wouldn’t know what it does.

Regardless of how you want to approach naming your business, there’s one thing every business owner should avoid…

Don’t Use The Same Name as Another Business

Earlier this week, an old friend on mine sent out a message on social media letting everyone know that he was interviewed on a very popular business podcast. He was using this podcast as an opportunity to grow a new line of services. I’m a fan of the podcast and a fan of my friend, so I tuned in.

Being a curious fellow, I also searched the name of his business in the federal Trademark Electronic Search System (TESS). Lo and behold, I found a live registered trademark that used two of the three words that are in the name of his business. This trademark owner also registered a very similar graphic associated with the business. To make matters worse, the trademark owner’s business provides the same or similar services as my friend’s business.

Therefore, in my view, there is a fair or high likelihood of confusion between my friend’s business and the business of the registered trademark owner. That means my friend is arguable infringing on the trademark owner’s exclusive right to use the trademark. That’s not ideal.

Related: What is a Trademark?

Why Using the Same or Similar Name as Another Business is a Problem

There are really three or four possible outcomes in a situation like this. First, nothing could happen. My friend might go about his business and never experience a problem with any trademark infringement issues. This is because there are no trademark police out there. It’s up to each trademark owner to police the trademark owned. If the trademark owner never catches wind of the potential infringement or decides that she lacks the time, energy, or funds to enforce her trademark rights, then nothing will happen.

Second, my friend could end up receiving a cease and desist letter demanding that he discontinue using the infringing mark. In other words, the letter will demand that he stop doing business under the name he has established. In my experience, the goal of these letter really is to get you to stop. If you stop, then that’s usually the end of it.

Third, the trademark owner can file a lawsuit for trademark infringement. A successful trademark infringement claim can result in disgorgement of profits generated by the infringing activities, triple damages, and attorney’s fees and costs. 15 U.S.C. 1117(a). Along the way, the trademark owner can also have the court order you to stop engaging in the infringing activities.

A fourth option could be that you could contest the validity of the registered trademark. This means that you think there is some reason why the trademark should be invalid. For example, you might think the trademark is just descriptive of the actual product or that the trademark has become generic. I didn’t really think this was an option in my friend’s case because the trademark seemed fairly strong and had been in used for over 10 years.

How to Avoid Infringing on Another Person’s Trademark

I say “avoid” but I should probably say “minimize the risk” because trademarks can be complicated. There are actually three ways to obtain trademark rights: (1) common law, (2) state registration, (3) federal registration. In order to be confident that you are not infringing on another person’s trademark rights, you have to investigate whether the name you want to use is being used by another person. This means you have to investigate existing common law, state, and federal trademarks.

What I have described so far relates only to federal registration. This is the first and easiest place to begin your investigation. If a search of the federal trademark database reveals a trademark similar to the one you want to use, then it’s probably best to choose something else. This is why people in the trademark space will sometimes review to a search of the federal databases as a “knockout search:” it knocks out certain trademarks you are considering from contention.

Search state databases requires you to literally search the records of each state. This will be a huge burden and fortunately there are many commercial entities who have invested in the technology to dig through state databases to obtain this information for you.

Searching for common law trademarks is even more burdensome. There is no designated place to look for a common law trademark. Instead, you have to search google, newspapers, yellowpages, directories, etc. to determine whether there is anyone currently using the trademark. Again, there are companies who have developed the technology and processes to do this.

Do you have to do any of this?

There is no law or requirement that forces you to do anything about trademarks prior to choosing the name of your business. But there are definitely laws about the consequences of your choice. If you really want to avoid trademark infringement issues, a thorough investigation of common law, state, and federal trademarks may be in your best interest.

You may just want to search the federal trademark database because it’s easier to access. To me, this is the minimum that anyone should do.

If you like your idea and just want to throw caution to the wind and go for it, you can! It’s totally up to you. I wouldn’t advise it, but you’re the captain of your own ship.

Let’s Get in Touch

If you would like to ask a question about trademarks, copyrights, or online business, shoot me an email (thelawofthebrand@gmail.com) or a text (702-291-1799) or schedule a meeting.

Schedule a FREE Consultation

Leland Faux
Attorney Leland Faux blogs about trademark, copyright, and online business issues at Law of the Brand. You can submit a question by email to thelawofthebrand@gmail.com.

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