By: Trademark Attorney Melissa G. Ramnauth, Esq.
Check out these top 3 business naming tips if you have a business or website.
If you want to start a business in the new year, you should consider picking a name that will give you the strongest trademark protection.
Legally protecting your company can save you so much money in the future. Who doesn't want to save money?
Before I start, I'll quickly summarize trademarks.
What is a trademark, and why do you need it?
A trademark is a name, logo, or design that lets customers know the source of a good or service. It tells you where something is coming from. Trademarks are important because it is the key to your branding (including a domain name, and even business cards).
Every business should develop a brand that sets it apart from others. In time, people will want to go with a certain brand because of how it makes them feel.
Do not just pick any name for your business or website. Choose a name that will give you the strongest legal protections and the lowest risk of getting sued.
Usually, the best thing to do is pick a strong business name and file a trademark application with the United States Patent & Trademark Office for trademark registration. This gives you exclusive rights over your business name nationally. No other company or person can use your company's name in a similar category in a different state, even if you are not in business in that state yet. That is one of the best perks of having a federal trademark. (To read more about the benefits of trademarks, click here)
Sometimes a business name is not eligible for federal registration. In this case, you can attempt to register your trademark at the state level.
For example, in the state of Florida, a trademark owner can file a trademark application for its brand name if it does not want protection at the federal level. There are very limited reasons for choosing a state registration over a federal. Sometimes a business is legal at the state level, or maybe an owner cannot afford the filing fee for federal trademark registration. You most likely do not need a state trademark registration if you already have a registered trademark at the federal level.
Here are my top 3 ways to name your business for maximum trademark legal protection. It's a good idea to consider these tips when trying to pick a company name.
First, you can pick a fanciful name. A fanciful name is a completely made up name. It is a unique name! For example, Kodak and Exxon are fanciful business names.
These names are not defined in any language. These names do not suggest the kind of business associated with the name.
You probably would never have guessed what Exxon or Kodak offered if you heard these names for the first time.
Fanciful names get the strongest trademark protection from the U.S Patent and Trademark Office. These companies consciously chose a name that their competitors did not have. They invested a great sum into marketing.
Some experts might even say that a fanciful name is the perfect business name. It can show that a company is taking its intellectual property seriously. On the other hand, it might require more advertising to explain the company to consumers.
A federal court will enforce fanciful federal registrations strongly against potential infringers. (I will discuss how you can reduce your risk of an infringement suit by doing a trademark search below.)
The second strongest business names are "arbitrary'" business names. This means that the name is actually a real word, but it is not commonly associated with the type of business.
For example, "Apple" for Apple Computers is an arbitrary name. Apple is a real word for a fruit. Apple was not associated with the tech world.
"Amazon" is another arbitrary business name. Amazon is a real word for a river/region. However, it was not associated with online sales.
Arbitrary business names get the second strongest level of protection from the federal government. These names are not completely made up, but the level of marketing might be similar to fanciful names.
The main difference between arbitrary and fanciful names is that arbitrary names are real words.
Altogether, a strong and unique business name can be either fanciful or arbitrary.
3.Trademark Clearance Cleared
Regardless of whether you choose an arbitrary or fanciful name, you need to make sure that the name you want to use is not already taken.
This is the first step and THE most important step in the trademark process. Step 1 is making sure that your business's name is clear to use, and Step 2 is filing your trademark application with the United States Patent and Trademark Office and/or a state trademark office.
There are a few ways to determine whether there is an existing trademark that was in actual use before your own. The first date of use is an important date because it indicates the true owner of a trademark. You might not always be able to view this in the USPTO's trademark database. Sometimes a company does not register their business name but the company is still entitled to common law trademark rights.
Common law trademark rights are limited to a geographic area and more costly to enforce than registered trademarks.
There are a few different ways to check to see if a trademark is already taken, and therefore a high risk for a lawsuit.
First, you can check the USPTO's website's TESS database. I have a guide that can walk you through it. Click here to get it for free.
Second, you can check on Google. Google is a good place to check but it is not thorough.
You need to check to see if you are using the same name as someone else, but you also need to make sure that your name is not too similar to another trademark. This is one of the main reasons that you need to have a trademark attorney conduct a trademark clearance search. An attorney will check for exact names, but also similar names based on federal law and opinions from the USPTO. Attorneys also have specific software that they can use, in addition to their own personal experience.
The name of a business, website, and/or blog is probably one of the biggest assets of a business. Choose and protect this intellectual property. It can will effect your new business and its valuation.
I talk about the "Club House" trademark nightmare often. You probably recognize the name as the audio app that soared in popularity during the pandemic. The app involved audio chatrooms.
The company became so popular that it was even valued as much as $4 billion!
Then it got hit with a trademark infringement lawsuit. It appears that no one at the company checked to see if the name was available to use. They did not do a trademark clearance search. If they did, they would have likely seen that there was another app out there in a similar industry with the exact same name.
The audio app's stock and valuation immediately plummeted.
The two companies eventually settled out of court. It was a confidential settlement. I can only assume that they settled for millions or maybe even a billion dollars.
You never know when your company might take off. Spend the $2,000 protecting your trademarks and legal rights, or you could lose millions later. The registration process is important for lining up a good future for your small business.
If you are a business owner interested in protecting your business name (and stopping copycats), I'd be happy to help. You can schedule a call on my website or call (754) 800-4481.
Legal Disclaimer: The information in this post is for educational purposes only related to U.S. trademark law. Legal advice is only given pursuant to a legal retainer.