KEYS TO SELECTING AN APPROPRIATE NAME WHEN OPENING A BUSINESS
February 24, 2012
When deciding what to name your new business, don’t forget to do your homework. I recently covered on this blog several things you should consider when opening a business, and I continue to get questions regarding this topic. I am also frequently asked about the legal implications of naming a new venture.
While picking a name for your new business is typically a fun process, it’s also a critical one. In fact, picking the wrong name could be extremely costly. Great care should be taken in this process to ensure proper selection, registration and protection from legal action.
Do Your Research When Opening a Business
The first step in the name selection process is research. You need to know what names are already in use. Both federal and state trademark laws protect parties that have invested time, money and energy into a name, slogan, mark, or a combination thereof (i.e., the laws prevent thrid parties from piggy-backing off of the goodwill that the original parties created and also protects consumers in that confusion between companies in the marketplace is avoided). This means the name you select must be at some level unique. If you are sued for infringement, you could be liable for damages, attorneys fees, lost profits, etc.
Your research should help to determine whether similarities exist between existing names and the desired name of your new venture, and, if so, to what extent they might put your business at risk.
Use Online Resources for Your Name Research
There are a few free, online resources available to help with name selection research:
- The US Patent and Trademark Office lists all live and dead trademarks online in their Trademark Electronic Search System (TESS). A simple online search of your name will tell you how many, if any, other companies have trademarked that name (or variations thereof).
- If you are in North Carolina, the NC Department of the Secretary of State lists all of the corporations registered in the state of North Carolina in an online directory.
- As I’m sure you know, Google can also be a great resource to lead you to third parties that might already have used your potential name in commerce.
While these are great resources, they are not full proof. Common law trademark rights, in some circumstances, can protect businesses that use their name in the marketplace but have not registered it (and they may or may not show up on a search engine). You should see proper legal advice to assist you in analyazing whether the business viability of a name/mark is worth the potential legal risk.
Register your Business Properly
Once the name for your new venture has been selected, your business will need to consider registering to receive trademark protection. This is generally a lengthy and tedious process where the advice of corporate counsel can be very helpful.