What’s in a name?

Posted: December 14, 2013 by Vance VanDrake III in Legal, Marketing, Startup, Uncategorized

vancevandrakeWhat’s in a name?  Groups of related trademarks are often referred to as a “family.”  Businesses often treat their trademarks, their business names, and their product name or logos like their children.  A trademark indicates source (it tells purchasers where or from whom the product or service comes.) Trademarks represent the goodwill in a brand.  To be successful, you must protect your own brand with equal vigor and take precautions not to tangle with other brands that may be confusingly similar. 

Many early-stage companies with outstanding innovation, leadership, and funding fall apart because of a poor name selection process, or a misunderstanding of trademark law. This results in an expensive trademark battle or, in some cases, being forced to change a name.  Because trademark owners are so protective of trademarks, they spare no expense to eliminate all  potential threats.  These proceedings can be very expensive and disruptive to a business but are easily avoidable.

  1. LLC filings are NOT trademark applications
    One common misconception is that setting up an entity, such as an LLC, under a particular name with the Secretary of State confers trademark rights and provides assurance that a company is not infringing the trademark of another company.  Although the state’s staff does a basic name check to make sure that no other business has reserved that name, this administrative review has no bearing on a potential dispute.  So, filing your LLC or incorporating your corporation with the Secretary of State does not confer any trademark rights.
  2. Improper Searching
    Many companies do not search before choosing a business or product name. Improper searching can also create a false sense of security.  Trademarks can be registered at the U.S. Patent and Trademark Office which lists them on its Trademark Electronic Search System (TESS) database. TESS can be an excellent resource when considering a new name.  However, it is a common misconception that only registered trademarks can present an infringement risk.The Lanham Act allows for trademark lawsuits and opposition proceedings based on “common law” trademark rights.  A company using a trademark, prior to your use, can file and win a lawsuit even without a registered trademark.  Trademark rights are based upon use, which means that a search of registrations is often incomplete. You must do a comprehensive search for these common law names, such as on Google, to make sure that a prospective trademark is clear.  The most prudent approach is to work with an attorney to clear and file a trademark application before investing resources in a brand.
  3. Not using “™”
    Your start-up can use Lanham Act common law rights to your advantage, but most start-ups miss this opportunity.  A “™” can be placed next to any indicator of source including your business name, slogans, and product names. This is 100% free and no filings are required. Many start-ups confuse the “™” with “®”, where the “®” can only be used once a trademark is registered.  Use of the “™” puts third parties on notice, makes your business look more sophisticated, and can be a good placeholder during the trademark registration process.
  4. Improper Analysis
    Many start-ups believe that, so long as their name is not identical to the name or trademark of another company, there is no risk of infringement.  Maybe a letter is different or, especially with start-ups, a vowel or two are removed. The atual test for trademark infringement is “likelihood of confusion”, which involves a multi-factor test comparing such things as the similarity of the marks, the channels of trade, the types of goods, etc.  Differences in spelling are often not sufficient to avoid infringement. Just because your Google search didn’t turn up any exact matches, you shouldn’t make any assumptions that you are OK.
  5. Domain Availability
     “Domain trolls” often present a bigger problem than patent trolls.  Domain trolls buy up domain names, with no intent of using them, and simply hold the domains until an unsuspecting company wants that domain. The problem is exacerbated when a start-up has already committed to a brand and has fallen in love with a particular name. Prices can be steep.  Wise founders register domain names for any potential trademark before even considering the use of that name.
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