One of the first decisions the startup clients that we advise need to make is what to call their company. This decision may seem like “the fun part” and relatively simple, but it implicates a number of legal and operational issues that can impact the business.
In addition to the marketing elements (e.g., memorability, conveying the purpose of the business) there are two key legal issues to consider. They are:
Ensuring the name won’t be taken away from you
Being able to protect the name they choose
Based on these, naming can be relatively complex subject, so we want to offer a simple introduction to developing a business name with four steps to take as you consider naming your business.
Finding a name that lasts:
You can perform a free Google search to see if anyone is using the selected name. However, that search is unlikely to yield the most complete set of results. Trademark research services are available and generally provide more detailed results, but are not free.
Know the infringement rules. Part of the problem with the Google search and the research services is that the rules on what infringes are not that clear cut. The legal question is: “Are consumers likely to confuse the source of your goods or services with another company based on the similarity of your name?” The real question, however, is: “Does the owner with the similar name think your use will cause confusion and are they willing to spend money to stop you. If it is a close call, you are probably better off choosing a distinctive name and developing a great reputation under a name that is unique to you.
Bring in the lawyer. Working with a trademark attorney may seem expensive, but it’s probably the best way to get the most complete results. And, depending on your business scenario, very much worth the investment when you consider the potential costs of infringing — or even causing someone to think your name infringes on their trademark. Technology, like artificial intelligence, is advancing trademark searches, both to help business owners do their own due diligence, and reducing the complexity of the work needed for a trademark attorney. Unfortunately, the technology alone is not yet better than the experienced trademark attorney.
Protecting your name. After determining that your name does not infringe, you should consider whether you can protect the name. There is a continuum of trademarks ranging from the least to the most protectible.
The legal terms are:
Generic — names are either are generic (e.g., Planes, Cars, Trains) or have become the generic name for a class of products, like Kleenex or Aspirin. Generic names are not protectible.
Descriptive — names describes one or more elements of the service or product and is difficult to protect. Protection requires proof of multiple years of exclusive use.
Suggestive — these names require the consumer to use a little imagination to determine the product or service the mark represents. Microsoft is a suggestive mark. It suggests software for a computer. Suggestive names are popular because they (a) can be protected (although they are not as strong as arbitrary or fanciful marks); and (b) they connect the mark with the product.
Arbitrary — names have nothing to do with the product or service. For example, we have never received any fruit at an Apple store, but we do go to Starbucks for coffee. These names generally offer strong trademark protection.
Fanciful — examples are Xerox, Google or Kodak. Very protectible, but you have to spend significant marketing dollars to develop consumer recognition and, if successful, you run the risk of “genericide.” This is what happened to Kleenex, Aspirin and a host of other names, resulting in loss of protection.
Doing your homework before selecting a name for your business or product is an important investment in your future! Until AI is a reliable substitute, your best choice is probably to contact an attorney who regularly handles trademark matters to help counsel you on the opportunities available in naming and protecting your business.
Craig Etem and Stacie Smith are attorneys at Fennemore Craig. Etem serves as director and office managing partner of the firm’s Reno office. Smith practices in the area of intellectual property. Contact Craig at cetem@fclaw.com or Stacie at ssmith@fclaw.com to learn more.
