Juliet said to Romeo, “’Tis but thy name that is my enemy.” (II, ii, 38.) Yet when choosing a trade name to identify their business, or some aspect of it, many companies fail to do more than see whether they can register their business name with the Secretary of State.
O ye who have not consulted your intellectual property attorney, take heed! The Secretary does not evaluate your trade name for anything more than to determine whether it is identical to another name previously registered to do business in the same state. And they hardly need vary to pass muster.
The Secretary does not evaluate the name to consider whether it can distinguish your company from another or under the “likelihood of confusion” legal standard, which asks whether consumers viewing your name and recalling another are likely to be confused as to the identity of a business or the source of the goods and services offered.
If that failure to distinguish, that confusion as to source, or an objection by others seems likely, then “doff thy name” and make one less enemy. (II, ii, 47.) “By any other name, would a rose smell as sweet?” (II, ii, 44.) Just so, your company called by a different name would “retain that dear perfection which it owns without [the offending] title.” (II, ii, 46.)
Consider building business goodwill, which is an intangible asset of value, in a name that is arbitrary or suggestive of some quality your company conveys and by which it distinguishes itself.
Descriptive terms can also serve as trade names but can be harder to distinguish from others until sufficient recognition has been created in the mind of the consumer so that confusion is not likely. That recognition is often referred to as “secondary meaning.” And yes, these are like the legal standards by which courts determine trademark infringement. You might consider avoiding trademark or service mark infringement as well.
That leaves copyright infringement to consider in your design elements, typically created in-house or by your advertising firm. Know the terms of any agreements permitting your use of the design and whether the artwork is original. Courts evaluate copyright infringement depending in part on access and substantial similarity. If the artwork is original, then it is less likely, although not impossible, that the artist had access to the copyright owner’s work.
The best strategy is to commission a comprehensive search and to obtain a legal clearance opinion for adoption and use of your trade name, looking into state registrations, common law uses, federal trademark applications and registrations, domain names, web sites and others and even other countries if your business is international.
This initial step can be hard to justify at the beginning of a venture unless one considers the cost of changing names after having invested in advertising, building consumer recognition and business goodwill, and starting over later with no money and no goodwill.
Better to make smart choices in the beginning. Make that offending trade name “no part of thee.” (II, ii, 48.)