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Choosing Your Business Name

Starting a Business? Tips for Choosing Your Business Name

I am always hearing about businesses that seek to expand outside of their current state lines, only to find that another business already has the same name in that location where they seek to expand. This sheds light on the importance of naming one’s business entity.  A name should be chosen that is unique in the service area.

Business considerations of choosing a name include, but are not limited to the following: (a) the name should be appealing and easy to use; (b) the name should be easy for customers to remember; and (c) the name should not limit the company from expanding its products at a later date, if they so choose.

This decision is not be to taken lightly because the word or words that make up the company name serve as the company’s identity to its customers, suppliers, financiers and competitors.

The legal considerations for the business in choosing a name are just as significant- probably even more so- than the business considerations outlined above.  A search should be conducted by an attorney to make sure that the name is not confusingly similar with: (a) a business entity registered in the state of formation; (b) a state trademark or (c) a federal trademark.  A determination as to whether a mark is confusingly similar to a registered trademark involves a two-step process.  First, one must look at the marks themselves for similarities.  Second, one must compare the goods or services to determine if they are related.  Likelihood of confusion exists when consumers viewing the mark would probably assume that the goods it represents are associated with the source of a different product identified by a similar mark.  The required standard is that the confusion be probable, and not merely a possibility.

It is always best to try and ensure, to the extent possible, that the name chosen will not infringe on the rights of another during the start-up phase.  This will help to avoid a possible cease and desist letter down the road when large amounts have been spent on advertising and marketing with the company name.

Business owners must be aware that incorporating a company within a state does not equate to trademark protection for the company name.

There may, in fact, exist a federally registered trademark for the exact same name for similar goods or services. If this is in fact the case, the third party may be able to ultimately bar your use of the name.As you can see, there is more to picking a business name than meets the eye.