NAMING YOUR BUSINESS AND PRODUCTS Naming your business and products may not be as simple as it first appears.

You need to comply with legal procedures mandated by law. If you incorporate, for example, or form a limited liability company, you must choose a corporate or LLC name acceptable to your states business filing office. And all businesses corporations, LLCs, partnerships, and sole proprietorshipsmust comply with laws dealing with the registration. Other legal procedures having to do with business names are not mandatory, but it nevertheless makes good sense to follow them. For example, before using a cool-sounding nameespecially one that will also be used to identify your products and servicesits extremely smart to find out whether someone else already has rights to the name and, as a result, can legally limit how you use it or tell you not to use it at all. This normally involves at least two steps. To avoid a claim of unfair competition, your first step is to do a local name search to make sure that no local business in your field uses a similar name. Dont start Jimmys French Laundry if theres already a Jennys French Laundry a few miles away. Step two involves making sure you gain maximum protection for your trademarks or service marksnames youll use to identify your products or services. SOME TERMINOLOGIES IN NAMING Trademark: A word, phrase, design, or symbol that identifies a product brand such as Compaq computers, Nike shoes, Kodak cameras and Xerox photocopiers. Service Mark: A word, phrase, design, or symbol that identifies the provider of a servicesuch as Burger King (fast foods), FedEx (shipping), and Blockbuster (video rentals). Mark: Sometimes used to refer to both a trademark and a service mark, because the terms are nearly, but not completely, interchangeable. Corporate Name: The name of a corporation as registered with one or more states. Examples: Time Inc. and Sony Corporation. The corporate name refers to the corporation only, and not to any products or services it offers. Trade Name or Business Name: The name used to identify a business, as distinct from the product or service it offers. It may be the same as the product or service name; for example, Sony Corporation sells electronic equipment under the Sony trademark and McDonalds Corporation uses the service mark McDonalds on its fast food service. Or the trade name or business name may be differentfor example, Ford Motor Company sells cars under the Lincoln trademark. Assumed Name or Fictitious Name: A business name different from the owners name. Example: Laura does business as Coffee Express. Partnerships and

corporations may also use assumed or fictitious names. In most places, you must register a fictitious name. Federal Trademark Register: A list of all trademarks and service marks registered with the federal government. To be accepted, a trademark or service mark must be distinctive and not confusingly similar to an existing mark. BUSINESS NAMES: AN OVERVIEW Complying with the few mandatory legal procedures for naming your small business is relatively simple. For some very small, local businesses, meeting these requirements and doing nothing more may be adequate. Until quite recently, a wide range of local businessessmall retail stores, repair services, and craft studios, for exampledidnt need to worry about registering a trademark or service mark. And to avoid possible claims that they were unfairly using another businesss name, they could feel relatively secure if they checked for possible name conflicts in state and local business directories and the yellow pages with no need to do a more formal state or federal trademark search. But today, the rules of the game are dramatically different. The reason is that in the world of the Internet, mail order, and rapidly growing national chains, the idea of local isnt what it used to be. Today, even modest-sized businesses must consider taking name protection steps that used to be the sole concern of larger, more expansive enterprises. For example, you might think you have no problem if youre choosing a name for a shoe store in a small town. Think again. If you happen to pick a name thats similar to a shoe store that sells on the Internet, you are very likely to be accused of trademark infringement and probably forced to change your business name. In short, if you plan to sell services using your own name (Harvey Walker Roof Repair) or if yours will be a one-person, home-based business such as a graphic design service (A+ Design), youre not likely to have a trademark problem. But if your business is just a little bigger, such as a large camping equipment store (Wilderness Outfitters), or sells goods or services beyond a very local or industry-specific niche (Lamps.com Online Lamp Store), you really should take time to understand the basics of trademark lawand conduct a name search to see if someone else in your field is already using your proposed name. MANDATORY NAME PROCEDURES There are name-related legal tasks that every business must attend to. Corporations Part of the process of creating a corporation is choosing a corporate name. Most states require certain words or abbreviations in your corporate name so the public can recognize that your business is a corporation. This puts them on notice that, in general, youre not personally liable for debts of the corporation. Each state has its

own laws dealing with what words you must include in your corporate name. Typically, the state will require one of the following in your official corporate name: Incorporated Corporation Company Limited, or the abbreviation Inc., Corp., Co., or Ltd. If the name doesnt include one of the required terms, the state wont accept your corporate filing. The law in your state will also likely list some words that cant be included in your corporate name or that can be used by only certain types of businesses. Most states will reject a corporation name thats the same as one already on file or thats confusingly similar to the name of an existing corporation. If this happens to you and youve really got your heart set on the name youve picked out, there may be a way to get around the rejection. One approach is to change the name slightly or add something to it. Even a relatively small change may result in approval of the name. Or in some states, you can use a similar (but not identical) name if the prior holder of the name consents in writing. Obviously, youre most likely to get cooperation from the other corporation if your business involves a completely different product or service. Limited Liability Companies The procedures for LLC names are very similar to the procedures for corporate names. When you prepare the articles of organization for your LLC, youll need to include its name. If another LLC on file with the LLC filing office is using your proposed name or a similar name, your articles of organization will be sent back to you un-filed. To avoid this inconvenience, its wise to check the availability of the name before you file the articles. Your LLC will have to include certain words or abbreviations that let people know its legal status. Examples include: Limited Liability Company Limited Company Ltd. Liability Co. L.L.C. or LLC As with a corporation, your state law may prohibit you from using certain words in your LLC name, for example, that refer to banking, insurance, trust, or financial services. And again, as with a corporation, your state filing office wont accept your proposed LLC name if its the same as or very similar to an LLC name thats already on file. Your state may also cross-check the name against the names of nonLLC entitiessuch as corporations and limited partnershipsthat are required to register with the state. Your name will also be rejected if its too close to one of these. ASSUMED AND FICTITIOUS NAMES

Sole proprietors sometimes choose to do business under names that are different from their own names, and partnerships usually select a partnership name other than the full names of all partners. Corporations and limited liability companies may also decide to do business under names that are different from their official corporate names. Depending on state law, these adopted business names will legally be called assumed names or fictitious names. If your business uses such a name, you probably must register it. Sole Proprietorships and Partnerships If youre planning to do business as a sole proprietor or partnership under an assumed or fictitious name, in most states youre required to file an assumed name or fictitious name certificate with the designated public officeusually at the county levelbefore you start doing business. Generally, theres a printed form for you to fill out, and youll probably have to pay a small filing fee. If you dont register your assumed or fictitious name, you may encounter both legal and practical problems. For one thing, in many states, you may not be able to sue on a contract made or other transaction done under the business name. In a number of states you cant open a bank account in the name of your business without filing an assumed or fictitious name certificate. Corporations and LLCs Most corporations and limited liability companies operate under their corporate or LLC name, which is of course on file with their state filing office. If, however, a corporation or LLC decides to do business under a different name, many states require it to file an assumed or fictitious name registration. This involves completing a simple form and sending it to the state filing office with a modest filing fee. Example: Miracle Widget Manufacturing Company, a corporation, wants to do parts of its business under the name Widco and other parts under the name Industrial Innovators. It will have to register both of these names as assumed or fictitious names. Its important to use your correct corporate or LLC name, because this makes it more difficult for anyone to claim that your business entity is a sham (lawyers call this piercing the corporate veil) and impose personal liability on you. If youre going to do business under a name that deviates from the official name on your articles of incorporation or LLC articles of organization, its essential that you properly register the name. When it comes to products and services, a corporation or LLC is completely free to use names that are unrelated to its corporate or LLC name (as long as these names dont infringe on someone elses trademark). Apple Inc., for example, sells products under the name Macintosh, and the Ford Motor Company sells Taurus automobiles. TRADEMARKS AND SERVICE MARKS

A trademark or service mark normally consists of a word or words (or other signifier) that identify a product or service as different from all others. Toyota automobiles, Saab automobiles, Blue Shield health plan, are all examples of trademarks. For most small businesses, a trademark or service mark will consist of words or a logo. Occasionally, a business can obtain trademark or service mark protection for a product shape, color, or scent thats linked exclusively to the source company in consumers minds. For example, the distinctive curved and ribbed shape of the old Coca-Cola bottle is a federally registered trademark. But such protection is not easy to come by. Trademark law is the main tool that businesses use to protect the symbols and words that identify the origin of services and products. The basic rule is that the first user of a distinctive name or symbol gets the exclusive right to use it on relevant goods or services. The twin goals of trademark law are to: prevent businesses from getting a free ride off the creativity of others in naming and distinguishing services and products, and prevent customers from being confused by names that are misleadingly similar. If youre the first user of the mark on certain goods or services, you can register the name or symbol with the Patent and Trademark Office. Registration enhances your rights, particularly your ability to go after infringers because it places competitors on nationwide notice of your ownership of the mark. There are various rules as to what qualifies as a trademark and not all terms or logos meet the test. Strong Trademarks Trademarks that consist of creative, unusual, or otherwise memorable terms are called distinctive and strong. These marks receive the most protection from federal lawif youre the first to use such a name or symbol, you can usually stop others from using it in most situations. Distinctive trademarksthe ones most amenable to protectionare memorable, evocative, unique, or somehow surprising, such as 7 Up, Lycra, or Google. The words themselves have little or no descriptive function; they simply set the product or service apart from others. For example, Kodak and Exxon are fanciful or madeup words and therefore by their nature, they are distinctive. Other distinctive terms are arbitrary; theyre real words but theyre not used in an expected mannerfor example, Arrow for shirts, or Camel for cigarettes. Nearly as good are suggestive trademarksones that hint at some aspect of the product. For example, Talon suggests the gripping power of a zipper. Weak Trademarks By contrast, trademarks that consist of ordinary descriptive terms are called weak and require more effort to protect. While original and distinctive words (like Buick) can be protected by trademark law, generic terms cannot. The name Buick distinguishes a line of from others, but the name means nothing apart from its trademark use. Conversely, Dependable Dry Cleaners merely tells you something

about the business; it doesnt help you distinguish it from rivals who might also advertise their services as reliable or efficient. So Dependable Dry Cleaners, unlike Buick, would probably not qualify for trademark or service mark protection unless it has been in use for many years. Trademark law never allows a business to claim the exclusive right to use generic names (like Bicycle for bicycles or bicycle products), because competitors also need these words to describe their products. Besides, descriptive terms arent particularly memorable and dont further the purpose of trademarks and service marks. (However, ordinary words will be considered distinctive when theyre used for unexpected productsfor example Bicycle for playing cards.) Weak Trademarks that Become Strong Merely descriptive words (such as Easy Clean for a cleanser) or surnames (like Jones or Smith) or geographic terms (such as Atlantic or New York) usually are not legally protectable unless the trademarks owner can demonstrate that consumers associate the mark with its product or service. Such consumer association, known as secondary meaning, results from substantial advertising, significant sales, or prolonged usage. When a weak mark has secondary meaning, it becomes strong examples include Jiffy Lube, and Stop & Shop. When that happens, the trademark owner is then able to register the trademark. For example, the ChapStick brand of lip balm was originally a weak trademark. It simply described the condition the product was designed to curechapped lips. But it became strong as advertising and word of mouth helped the public develop a clear association between the name and a specific product. McDonalds is another good example of a weak mark that developed a secondary meaning over the years and now qualifies for broad protection. NAME SEARCHES You dont want to start work with someone elses trademark. For this reason, its important to conduct a name search before you lock in the name of your business. This is especially true if you choose an unusual or unique business name that will also be used to identify your productsZ Pop, Inc., for example, to sell a new carbonated drink called Z Pop. If someone else in your field is already using this name or has registered it as a state or federal trademark or service mark, you will be an infringer if you start to use the name. In such circumstances you will likely be forced to give up the name. Conducting Your Search Here are some suggestions for checking to see if others are using a business name similar to the one you have in mind: Search the Internet. Youve probably already done this, but if you havent, type the potential name and the product or service into a search engine and sift through the results. For some marksfor example, Apple a search engine may unearth hundreds or thousands of results that are of no value

for your trademark searching purposes. For that reason you need to focus your search, using some of the searching tips provided at the Google site. Alternatively you may choose to use a feebased trademark search engine such as Saegis on Serion (www.saegis.com). You should also search domain names to determine if a business has claimed the domain for its product or services. To search domain names, go to www.whois.net. Check state and county records where business names are filed. To avoid a claim that youre unfairly competing with another local business by using their name, check the records of your states office where corporations and LLCs are registered. Check the federal trademark register. Hire a search firm. If you are investing heavily in promoting your products or services under a certain mark, you may wish to pay for a trademark search. A full comprehensive search may cost between $150 and $300 per mark searched. Reviewing Your Search Results So now youve done your search, whether by hiring a search firm or performing the search yourself, and you have the results in hand. What do the results mean? When you read through the names that were found in your search, be on the lookout for the following matches: An identical match. If your search revealed names that are identical to the one you are using or plan to use (and keep in mind that a sound-alike for example, phat and fatis considered to be identical), this doesnt automatically mean that you must scrap plans to use your proposed name, though it should make you pause. If the identical name is being used for a very different product or service from the one you are producing or plan to produce, then you have good reason to move forward with your plans to use the name and register it as a trademark or service mark. How to Use and Protect Your Trademark Trademarks need proper care and management. If you improperly use your mark, you may find it harder to register or to stop others from using it. For example, if you use the R symbol when youre not entitled, you may be prevented from later federally registering your mark. And if you use your trademark in an improper context, you may set it on a course for genericide, when trademarks become the nouns they are meant to describe (sad examples include former trademarks such as aspirin, escalator, cellophane, thermos, raisin bran, and shredded wheat). Here are some steps that your business can take to best use and protect your mark: Take prompt legal action if other businesses use your trademark without permission. A trademark may become weakened or even generic if others use it to describe their products and you do nothing about it. Use your trademark with a proper adjective that describes your product. Youll notice that ads refer to a Xerox copier, Jell-O gelatin, and Band-Aid adhesive strips. If people continue to use the words Xerox, Jell-O, and Band-Aid alone, without being challenged, these marks can easily be declared generic and go the way of other trademarks like nylon.

 Always capitalize the first letter of your trademark. And some place on each ad or package, state specifically that the trademark is owned by your company. If your trademark has been placed on the federal trademark register, consistently give notice of that fact by using the symbol. If a trademark isnt federally registered or is registered only by a state, you may use the letters tm or sm to give notice of your claims. You may not use unless your mark is in fact on the federal register. If you discover that a newspaper or TV program has improperly used your trademark, send them a letter. Keep a copy in your records as proof that you have consistently enforced your trademark rights.