This is one of the most fun parts of starting a business. It’s also one that has hidden pitfalls. Don’t be hasty – be strategic, and do your homework. If you don’t, it could cost you some serious problems (not to mention money) down the road.
STEP ONE: Don’t Infringe
Don’t use a name that’s being used by anyone else in your industry. (More on how to research this below.)
Imagine you’re three years into your business and things are finally starting to take off. You’ve developed an online presence, a website that attracts followers, logos, marketing materials, eBooks, business cards, the whole shebang, all based on a name you chose when you were starting out (but didn’t research). Then you get a cease-and-desist letter from a company with your name telling you to stop using the name immediately. You have no choice but to rebrand from the ground up. Yes, a business can survive this, but it can lose goodwill that was built up in the original brand, slow down growth, and cost a lot of money to redo everything with your new name.
Isn’t it better to avoid this in the first place? Of course. You can avoid this fate by choosing your name carefully from the start.
One more thing – don’t think this has anything to do with size. Just because you’re a small operation doesn’t mean you’re immune. I’ve been hired by small businesses and one-man shops to defend cease-and-desist letters. In fact, there are trademark lawyers that do nothing but file and protect marks for their clients. Even worse news is that if trademark holders ignore or don’t prosecute (or reach another agreement) on a business that is violating their mark, it could sacrifice some of their rights. In other words, it’s more likely than you think to get a cease-and-desist letter. If you’re infringing, you’re infringing, and you’ll always be one cease-and-desist letter away from major disruption.
How to Research A Name
Well-funded startups spend thousands on researching trademark names. Companies specialize in just researching existing trademarks. This article is not for them. This article is for DIYers who are bootstrapping but who want to do it the right way.
To be clear, this is not a simple area of law. There are federally registered trademarks with the USPTO (the United States Patent and Trademark Office). There are state laws and common law that can give a company rights to a name. In other words, there’s a lot that goes into this. But we’re going to simplify it for you. If you’re going at it on your own, we want to arm you with the best available information.
Don’t guess. Here are some places you need to search for your name:
- uspto.gov. This is a list of federally registered trademarks. Search similar spellings and sounds.
- Secretary of State in your state – type in your state + secretary of state. From there, navigate to look up existing businesses.
- Domain search – use someone like GoDaddy to search to see if your domain is available.
- Google search the business name
- Social media profiles – look for accounts on Facebook, Instagram, Twitter, LinkedIn, Snapchat, etc.
How to Interpret Your Findings?
In a perfect world, your name won’t come up anywhere. It will be completely original to you. Next, your name won’t come up in your industry. Here are some tips for your findings:
- If any part of your name is trademarked on the USPTO website and it’s in your industry, move on and start thinking of a new name.
- If there’s evidence of a competitor using the same name on the internet but not on the USPTO, I would proceed with caution. That company may have common law rights to the name (depending on the state). In most cases, I would recommend clients target a new name. If you are dead set on that name, contact a trademark attorney to provide an opinion for you. There are always options, including contacting that business to work out a deal.
- If you find the same name you want to use, but it is being used in a different industry, you may be able to use it. This is usually fine but I would recommend doing some additional research or contacting an attorney. We utilize a third-party service, so contact us and we will connect you with them.
- If the domain name is taken but there is no other evidence of usage on any other sources, you may be fine to use the name from an intellectual property rights perspective; however, it may not be prudent from a marketing perspective. If there is no other evidence of usage of the name besides the domain being taken (meaning no evidence on google or anywhere else), then I would not hesitate too much on the legal side. Oftentimes, a third party will have purchased that name hoping someone will want to buy it from them. Then, you will need to make a business decision as to how important that name is to you and whether you want to gamble with being able to buy the domain (I’ve seen these get sold for thousands).
How similar is too similar? That’s the question (and one that may require legal advice). My advice in this area is typically very risk-averse and I recommend continuing to search until you find a name with few question marks surrounding it. Ultimately, your goal is to be able to control this brand so you want as little competition as possible with your name. And, my personal opinion is that a name is pretty far down the list of what makes a business succeed, so I find that this is not a great area to take any risk. When in doubt, utilize an online service to perform the search for you. Some of the smaller services can do this for under $500. Email me for that information.
Step Two: Control Your Brand
Now the tables have turned! Once you have a name that’s yours and yours alone, keep an eye out for other people doing business with your name and stop them.
For many businesses, their brand is one of their greatest assets. It’s not the idea or even the physical assets, it’s the goodwill and reputation built with the customers. Protecting this brand becomes more important every time you create a happy customer. So, protect it. That’s what cease-and-desist letters are for.
It’s not just your business name, either. You want to assert your dominance over your taglines, logos, color schemes…anything that identifies you as the creator and is important to your brand identity. Trademark law is your best weapon here.
Trademark Law in 50 words
A trademark tells purchasers who is behind a product or service. When someone buys an iPhone, they know Apple made it. When you control a trademark, you can prevent others from using it. The less common the name, the better you can protect your mark.
What makes a good name?
Generic – descriptive – suggestive – arbitrary – fanciful
beer – Burger King – Jaguar – Apple – Lexus
Generic – common term; not protectable by trademark law
Descriptive – describing what you do makes it hard to protect
Suggestive – hints at an attribute of your product or services; e.g., Jaguar suggests fast and agile
Arbitrary – a common word but used in an unrelated area; Apple is a perfect example
Fanciful – these are usually made up words (often combing two words); think Exxon or Kodak. This gets the most protection because, without you, the word doesn’t exist, so anyone using it to make money is likely infringing.
Work on getting your name to the right side of this spectrum to give yourself the most control over your name. It also tends to force you into developing a more creative and memorable brand.
It’s Not All In a Name
I truly don’t think a name makes or breaks a business (or even heavily impacts it). Sometimes, you see clever names and terrible names, but it’s the business behind the name that matters (more importantly, the person behind the business). My only recommendation is to avoid having to change your name. That can cause more problems, in my opinion, than even a sub-par name. Make this easy on yourself and choose a name you know you can protect. Then go protect it. You can hire an attorney or use other resources to DIY it.
When you start a business, you’re not going to get everything right. No one does. The businesses that make it are the ones that get more right than wrong and that are built well enough to handle the problems. Here’s where Quick Counsel comes in. We want you to get as much right as you can so that you are able to keep moving your business forward no matter what happens. With so much about business that you can’t control, do your best to get what you can control done correctly. Get your legal and financial house in order, and you will be stable and durable!