As a practical matter, the entrepreneur’s choice of a business name is driven by the marketing and goals for the particular business. But the attorney has a different perspective: he or she has to consider the likely business size, form of doing business, its geographic location or where it may be conducted, and the method of engaging in the business. All these factors have a direct impact on how to advise a client on the use of a proposed trade or commercial name.
As an attorney, keep in mind the two-fold goal of every legal review of a prospective business name: to procure rights for the client’s business and to avoid infringing on someone else’s name rights.
Here are some steps to get you started on your next name review:
- Consider the form of doing business. At the simplest level, a sole proprietor engaging in a geographically localized business may only be concerned with obtaining fictitious name protection. At the other extreme, a start-up business may be planning on doing business worldwide and involving sophisticated forms of capitalization. In the latter situation, the decisions on name use may require exhaustive multi-jurisdictional analysis of applicable laws as well as databases and lists of pre-existing business names, symbols, and designations to obtain legal protection in a particular jurisdiction.
- Learn the applicable laws. Because several different bodies of law govern the choice of a business name, be familiar with federal, state, and common law trade name and trademark laws, as well as with name requirements and restrictions governing the particular form of entity and scope of business. The proliferation of product promotion in the mass media has created a minefield of prior existing rights in various names and trademarks.
- Don’t confuse trade names and trademarks. A trade name is the name by which a business is known to the public (e.g., “3M” is the trade name for “Minnesota Mining and Manufacturing Co.”). By contrast, a trademark is associated with a vendible good or service as a guaranty of quality, i.e., the brand name applied to a particular product or service (e.g., “Tide” detergent).
- Watch for possible confusion. A name or mark cannot be adopted or used if it is so similar to a prior name or mark that the public would be confused about the source, origin, sponsorship, or affiliation of the goods or services involved. This means that any new business should avoid any name that could give rise to the likelihood of confusion.
- Be cautious. Always err on the side of caution in advising a client whether its intended use of a particular name is permissible; it can be costly to “undo” trade name use that is later found to be infringing.
For everything you need to know about selecting a business name and how to best advise your clients in doing so, turn to CEB’s Selecting and Forming Business Entities, chapter 3.
Other CEB blog posts your may find interesting:
- Injecting Reality into Your Client’s Franchise Dreams
- So Happy Together: 15 Things to Discuss with Joint Venturers
- Get While the Getting’s Good: Checklist of Info You Need to Form a Limited Partnership
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