Choosing a Business Name and Protecting Your Brand Choosing a name to properly represent your product or service can be difficult and should be done with careful consideration. Before choosing a name, you should do a basic search to determine whether the name you have chosen will infringe on another’s trademark rights. Searching should, at a minimum, be done at the state and federal level to discover any registered marks that may be confusingly similar to the mark you have chosen. A more in-depth search may be done by searching telephone directories and county records.
Researching a name before you start using it is important not only to guard against infringement of another’s mark, but also to start your business with a name that will not be confused with your competitors. Most businesses spend thousands of dollars every year to promote their products or services and create name recognition. If someone has a similar name, a customer could mistake your advertising for promotion of your competitor’s products or services.
Once you have chosen the perfect name, how do you protect it? Unregistered names are protected by common law trademark infringement. To enforce your rights to a mark under common law, you must prove that a business competitor has adopted a name that is confusingly similar to the one already being used by you and the similarity results in a likelihood or probability of confusion among consumers who are using ordinary care. In other words, the burden is on you to prove that you used the mark first and that your customers will be confused by your competitor’s use of the mark.
Why should you register a mark if it can be protected by a common law action? There are several advantages to registering a mark with the U.S. Patent and Trademark Office (USPTO). First, registration gives notice to the world that you claim the mark in association with your product or service. Second, registration allows you to receive up to treble damages (triple the amount of damages) in a suit for infringement to protect your mark. Third, and most important, registration creates several presumptions. Registration creates a presumption that a mark is valid and that the owner of the registration owns the mark. Also, it is presumed that the owner has exclusive rights to the mark and that the mark is not confusingly similar to other registered marks. Finally, if you plan to use your mark outside the U.S. (e.g. Internet sales), a registered mark allows you to file applications for foreign registration based on your U.S. registration. Also, if you compete against foreign companies in the U.S., registration with the USPTO allows you to prevent the importation of goods bearing marks that are confusingly similar to your mark by further registration with U.S. Customs.
Protection of your mark does not end at enforcement in infringement actions. A mark must be used the correct way to protect its registration and uniqueness, as it is associated with a product or service. When using your mark, you should give notice of your claim to it as a mark. For an unregistered mark, the notation (TM) is used after the mark ((SM) for a service mark). For registered marks, the notation “®” is used to give notice of the mark’s registration. If you do not give such notice, it may be difficult to prove that infringement by a competitor was intentional, which may decrease the amount of damages that you are entitled to.
In addition, you should not allow your mark to be used as an adjective to describe your products. Such use could cause your mark to become generic and descriptive of the product or service. For example Xerox ® spends millions of dollars each year to educate the public that Xerox is a brand of copy machine (i.e. “use our Xerox ® brand copier” not “Xerox this document”). The mark should also be set out distinctively in text by either use of a logo, underlined, or italicized. Finally, if you are going to allow some to use your mark, you need to make sure you license use of the mark to such person and enforce unauthorized use outside of the license agreement.
With the advent of E-commerce it has become more important for businesses to protect their names. A business that was once just local can now be national or global. Companies selling over the Internet are now invading local markets, which may take business away from the “mom and pop” corner store. If a company is using a name similar to yours, potential customers purchasing on the Internet could be confused as to whom they are purchasing products or services from. Therefore, with careful selection of a name and proper protection, you can guard against a competitor profiting from the hard work and money you spent to create your band name associated with your products and services.
For more information, please contact Jeffery A. Jacobson