You should think about the branding aspects of your business name before you start the business! There are a few things you should always do first. Missing any of these crucial steps before starting your business or organizing it with the secretary of state (or similar agency) is a mistake that can cost you or your business immensely down the road! I am talking specifically about branding mistakes and the consequences that can potentially arise for your early missteps. Below are some common mistakes you or your partners should avoid before settling on a name for your new business.
1) Choosing a business name that does not also function as a trademark or service mark! Separate product and service branding aside, you will generally want to brand your business name. You or your partners should be thinking about a name that is eligible for state or federal protection. That means you should avoid using your last name, which generally is ineligible for protection unless “secondary meaning” can be established. You should also avoid using geographic terms. Trade names can be ineligible for protection based on the use of geographical terms. (You can use certain geographic terms to describe your mark, but it depends upon the nature of your business and how you use the term to describe the good or service.) Finally, you should choose a name that is arbitrary or unique like Google or Exxon, not a name that is merely descriptive or that is generic. The bottom line is that arbitrary or fanciful names and names which are suggestive are automatically eligible for protection. Descriptive names must acquire secondary meaning in order to receive protection and generic names are never eligible for protection. So, choose wisely.
2) Assuming that your business name is protected when you register it with the Secretary of State. Depending upon what state you plan to organize the business in, the secretary of state or equivalent department will maintain a registry of all corporations, LLC’s that have been organized (and are in good standing). If your name or the primary keywords are already taken, you will have to go back to the drawing board. You can search registered business entity filings online for most states. Your best bet is to simply call the secretary of state or appropriate department and confirm name availability.
Warning: If the name you want is available, a common mistake many business owners make is believing that by filing organizational documents with the Secretary of State, this provides protection of the business name. The secretary of state (or similar agency) will only conduct a name check to prevent the filing of multiple entities with the same name. This is meaningless from an intellectual property standpoint. In addition, even within the same state there may be different types of entities as well as sole proprietorships or general partnerships using the same name. These names will not show up on a corporate name check by the Secretary of State. The bottom line is that business organization does not secure your right to the business name nor does it protect you from claims of infringement by a prior user of the name!
3) Failing to conduct a Google and other major search engine search. I have had plenty of clients who have not even done a search on Google or another major search engine to see if the name they have chosen is being used in commerce. Trademark infringement is a serious matter. While you may not think your local business will ever run into a problem because your customers are local, you have a physical presence only perhaps or whatever your reasoning, you would be wise to consider future growth. If you operate online or a business that operates in multiple states, you need to be concerned about infringement now, not later. This post isn’t meant to tackle the specifics of trademark infringement. But, you should understand that if other consumers would be potentially confused as to the source of a good or service you sell/provide with another business, that could cause problems. You don’t want to be on the end of a cease and desist letter asking you to essentially stop using your business name months or years after working so hard to establish its branding! All of that can be avoided by making the right moves now.
4) Failing to search the USPTO (TESS) database & various business directory databases. If you pass the first 2 hurdles after you have chosen a name, you should absolutely determine if an identical or similar name is registered (or on file for registration) with the United States Patent & Trademark Office (USPTO). The purpose of the search is to help determine whether a “likelihood of confusion” exists with the name you have chosen and another trademark or service mark. This means you are trying to determine whether the name has already been registered or applied for at the USPTO that is the same OR similar to your mark and used on related products or for related services. A Dunn & Bradstreet (D&B) database search, related business directory searches, state corporation/LLC database searches, etc. should all be evaluated to make sure you unearth any identical or similarly confusing names that may have slipped through the cracks during the first few steps.
5) Grab that domain! Maybe your thinking of different domain name instead of the name of your business. Without getting into that debate, if you intend on using the name of your business as your domain name, you better make sure its available for use and then go grab it! It’s a bad feeling getting your new business off the ground, but then a few months later you discover the corresponding .com domain isn’t available. Don’t make this critical mistake and secure your domain first. While you are at it, you should grab any related domains such as .net, perhaps an alternate version with “the” in the beginning of the name and some common misspellings of the domain. But, there is no need to go overboard. Keep in mind, using domain names that infringe upon the established trademarks or service marks of others will land your business in hot water!
Even if you don’t make these 5 common mistakes, you should still consider getting a legal opinion on the name you have chosen. Your not an expert. Duh. So why play trademark attorney and put your business potentially at risk? Granted, a search engine and USPTO search is a great start. But, it may not unearth potential problems. The safe play is to always hire a trademark attorney.
If you cannot afford to hire an attorney or still don’t think it is necessary, you should absolutely avoid these 5 mistakes before organizing your startup!