Starting a new business is an exciting time. You print up signs with your new logo, start advertising campaigns, and begin getting customers in the door—and you are so proud of how it has turned out. A few months go by, and business is booming.
One day, you open the mail for your company and see that you have received an envelope from a law firm. Inside is a cease and desist letter that states that you have stolen some other company’s name or likeness and a demand that you stop operating under your business name or face possible legal action.
This type of situation can be terrifying, but it can also be avoided. As a new business owner, you should pick a business name that not only suits your company but it is also not being used by anyone else. How can you ensure that your company’s name is not being used by someone else?
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What is a business trademark?
A trademark is a legally protected phrase, symbol, or design used to identify goods or services from one particular business. It is used to brand a product or company to distinguish specific goods or services and indicate that they are the company’s product.
The most common examples of trademarks include things like:
- Business names (for example, “Boeing” or “The Home Depot”).
- Symbols that represent the brand (for example, the Apple logo or the McDonald’s golden arches).
- Catchphrases or slogans (for example, the Nike slogan “Just do it”).
- Mascots or figures (for example, the Geico Gecko or the Energizer Bunny).
- Lyrics or jingles (for example, the “break me off a piece of that Kit Kat bar” jingle).
- Product names, shapes, or coloring (for example, “Frisbee” or the T-Mobile Magenta color).
Even something like a particular font can be trademarked.
Why are trademarks helpful?
Having a trademark helps protect various aspects of your business so that others cannot use it. Trademarked products or services are often what sets a business apart in a competitive market.
They also encourage companies to use consistent brand messaging across products and services. In this way, the company is encouraged to produce a high-quality product or service to increase the positive association with the brand.
What are the consequences of violating a trademark?
Violating a trademark is commonly referred to as “trademark infringement.” It can have an array of legal consequences.
- Injunction. The other business may ask a court to halt your business and keep you from using their trademarked business name.
- Seizure. Suppose the trademarked information is on a product. In that case, the court can order the seizure of the goods that violate the trademark, costing you money in product development, inventory, and a lot more.
- Money damages. The other business can also request that you reimburse them for any damages that you may have caused for using their trademarked name.
How can you ensure that you are not violating a trademark when choosing a business name?
Picking a business name is a big deal—and you should spend some time and effort developing a name that fits your product or service. It is a good idea to do some research to determine if any other business has the same or a similar name.
You can start the trademark search process by doing a simple online search. If you put your potential business name into a search engine and several other similarly named companies appear, you may want to consider changing your name. While you might not be violating any trademarks, you do not want to run the risk of your business being confused with another company.
You can do a formal trademark search by visiting the U.S. Patent and Trademark Office’s website and clicking on the Search Trademarks option. Using this website helps you see not only current registered trademarks, but you can also review pending applications as well. This search covers the entire United States, which means that if your business name is not listed, you have very little risk of violating a trademark.
Can you use a business name that operates in another state?
Sharing a name with another company can be very confusing. Even if you and the other business operate on opposite sides of the country, you can still run into problems. As it is becoming even easier to order goods and have them shipped anywhere, a duplicate business name can become even more of a problem.
When you create a business, you must register the name in your state. Your Secretary of State (or similar agency) will not let you register a business if the name is the same as any other company. However, the state does not do a trademark search. That means that you may not have a duplicate name in your state, but you might have problems outside of your state.
If you know that your company will only operate in one state, having another company with the same or a similar name may not mean that you must choose another name. Instead, you might want to ask the following questions:
- Does the other business operate in my state at all? Is it possible that it could in the future?
- Is the other business in the same industry?
- Does the other company have similar products and services?
If the answer to any of these questions is yes, you definitely want to consider another name. If not, you may not have any real issues in your state. However, keep in mind that being able to register your business in your state does not preclude you from also violating someone else’s trademark. Instead, if the business name is trademarked, you should steer clear.
Do you need help choosing the right name for your business? Get affordable legal advice, or leave the trademark registration process to Rocket Lawyer. Our Trademark Registration team will conduct a trademark search, file your paperwork, and answer all of your questions.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.