- What’s in a Name? Why Business Names Matter
- September 8, 2014 | Author: Scott F. Landis
- Law Firm: Barley Snyder - Lancaster Office
What’s in a name? That which we call a rose
By any other name would smell as sweet
-William Shakespeare, Romeo and Juliet
In the above quote from Romeo and Juliet’s famous balcony scene, Juliet is arguing that the names of things really do not matter. Of course, when it comes to names for your business, you know that names do in fact matter very much. For example, you file a name with the Pennsylvania Department of State, get confirmation of the filing from the State, order signs for your building, letterhead, business cards, etc. and start advertising your business. Then, two months later you get a very formal looking letter from a lawyer saying you have no right to use your name and you must immediately stop. Wait, that cannot happen, right? The State said you could use the name. Unfortunately, it can and does happen. Depending on what you are using the entity for, the name can be one of the most valuable assets of the business, and confirmation from the State that the name is available is just one part of protecting that asset. Below, we will discuss three types of names for your business and what you get and do not get from each; 1) legal or entity names; 2) trademarks (including service marks); and 3) domain names.
Legal or Entity Names
Your legal or entity name is the official name under which your business entity (e.g. corporation, limited partnership, or limited liability company) is registered with the state. Your business’ legal name is the name that appears on contracts, tax returns, and other legal filings. No two entities registered in a particular state can share the identical or nearly identical name. Before settling on an entity name, therefore, the availability of that name needs to be confirmed with the appropriate office of the state where your entity is incorporated or registered. In most cases, this office is a division of the department of state or the department of revenue. However, as described above, the State allowing you to form the entity does not mean you have the right to use that name in commerce. If another person or entity is already using that name or a similar name, they may be able to prohibit you from using it. So, if your intention is to use the name in commerce, making sure the name is available for State filing is just one step in the process.
Trademarks & Service Marks
Trademarks & Service Marks identify and distinguish a particular product (trademark) or service (service mark). In addition to names, trademarks and service marks can include logos, symbols, sounds, colors, slogans, or anything else that functions to distinguish your products and/or services from those of your competitors. Trademarks and service marks differ from entity names in several significant ways. First, a trademark or service mark does not need to be registered. In the United States, trademarks or service marks come about from the use of the mark in commerce. This type of protection is called common law protection. Although not required, trademarks and service marks can be registered with the United States Patent and Trademark Office. If the name is important and will be an asset, a clearance search will allow you to determine if someone else is using the same name or a similar name. If not, while not required, registering such name may be advisable. Registration provides significant advantages to the owner of the mark, including the presumption of validity and right to exclusive use, and the ability to seek increased damages and attorney fees in an action for infringement. Another significant difference between entity names and trademarks or service marks is that businesses can and do have and use identical trademarks/service marks. If the products or services associated with a mark are not sufficiently similar or related as to create a likelihood that consumers will be confused into believing the products/services originate from the same source, then the identical or similar marks can co-exist. An example of this is the mark “Delta” for both airlines and faucets. Here it is not likely that consumers will be confused into believing that the airline is the same company that makes bathroom faucets so there is no conflict. Finally, a trademark or service mark serves a materially different function in your business. Your entity name is the name of your entity. Your trademark or service mark is the name of your product or service. This can sometimes be a subtle distinction, particularly in the case of service marks (e.g. “McDonalds” is a registered service mark for “McDonalds Corporation”). But it is a significant legal distinction nevertheless.
A domain name is the name which identifies the location of your web site on the Internet. The domain name usually consists of a series of letters and/or numbers followed by a top level domain (.com, .net, .info, etc.). Because it identifies a specific Internet location, each domain name must be unique and no two web sites may use the same domain. But businesses can, and do, have multiple domain names. Many companies will have a domain name that is identical or similar to their entity name or to one or more of their trademarks or service marks. The nature of domain names has created many opportunities for conflict. More than one company may have rights to use the same trademark or service mark, but only one of those companies can have the equivalent domain name. Your competitor, or another party, may attempt to register a domain name similar to your name for the purpose of keeping you from registering it, or in an effort to sell it to you for an inflated price. Of course because there are hundreds of different top level domains, with more likely on the way, it is not practical for most businesses to register each and every possible domain name variation of your name. But businesses should still be attuned to the potential issues here.
Protecting and Clearing Names
By now you hopefully understand that just because you are able to use a particular entity name, that fact by itself does not mean you will be able to use a particular trademark, service mark, or domain name, and vice-versa. Therefore before you settle on a name for your business, it is important that you check the availability for the name from an entity name, trademark/service mark, and domain name perspective. The most reliable way to do this is to commission a full clearance search and review by an experienced attorney. Once a name is determined to be available, proper entity and domain name registrations should be filed. Federal registration of trademarks and service marks should also be strongly considered. Taking these relatively simple and inexpensive steps from the outset can save you from the grief and despair of finding out that your name is not fully available after you have spent money and time promoting it.