WHEREFORE THOU ART #37
Naming Names

So you're starting a new business and have come up with a snappy name for it. You want to protect the name, because you think it's unique and cool. How do you do that?

What we're talking about here are trademarks; a trademark is a designation of commercial source, almost anything that announces a business and distinguishes it from other businesses. (Technically, a "trademark" denotes a company that sells tangible goods, while a "servicemark" denotes a company that provides services; in this article I'm going to use "trademark" to refer to both.) Words can be trademarks. Like "Acme Explosives." So can logos (the Apple apple), colors (UPS's brown), and sounds (the MGM lion roar. You can hear a whole bunch of trademarked sounds at www.uspto.gov/go/kids/kidsound.html). But today let's stick to a simple name, and how to protect it.

The first thing you should do is to make sure you're not grabbing someone else's commercial name. Even if you think your name is absolutely brilliant and unique, you never know; somebody else might be using it, too. And it's better to find out before you start using a name than after you've spent a pile of money building your brand. I've had plenty of clients who have had to go through the painful and expensive process of changing their established business name because, unbeknownst to them, another company had prior rights to the name.

Do a Google search for your new business name (including alternative spellings) and see what comes out. If you find that somebody else is running a business similar to yours using a similar name in the same geographic region as you, you're probably out of luck. If there's a similarly-named business, but in a different location and/or for a different type of enterprise, you might be OK, but you might not, and I'd suggest running it by an attorney who specializes in trademark law before you make the jump. You can also do an online search at the federal Patent and Trademark Office's website (www.uspto.gov), and at your state's corporate filings databases (NY: www.dos.state.ny.us ; MA: www.sec.state.ma.us/cor). Be careful here; alternative spellings and similar sounding trademarks can sink your name. And the issues of "similar businesses" and geography are matters of degree; again, if you have any questions or doubts, see a lawyer.

OK, your name is cleared, and you're ready to go. How do you protect your name? Well, the first thing you should know is that the common law protects your name as soon as you start using it. Simply by using your trademark in commerce, you've earned the exclusive right to use that name in your geographic area. No need to register or file anything. It's yours. I would note that under state law, you are required to file a "doing business as" (or DBA) certificate in the town or county in which you're located, but a DBA filing has nothing to do with protecting the name of your business, aside from establishing a public record that you claim to be using the name.

Whether you need to do anything else to protect your name is really a business decision on your part, and depends greatly on the nature of your business. If your business is purely local and likely to stay that way, you really don't need to do anything. You can comfortably rely on your common law rights to protect your name.

If you're going to be transacting business in a broader geographic area, or over the internet, or if you would like enhanced protections for your business name, you can register your trademark either with your state (which will give your name protection not just in your immediate geographic location, but throughout the state) or, if you're engaged in interstate commerce, with the federal Patent and Trademark Office, which will give you nationwide protection.

You can't register a mark until you've actually begun to use it. This surprises a lot of folks; I regularly get asked by clients to register a trademark they've thought of and want to rush to get protection before they start using it, and that's just not possible. It does make sense, though. Think about what would happen if trademarks could be registered without proof that the mark is being used; companies would start registering trademarks defensively to keep them out of the hands of competitors. That wouldn't be good.

Also, registering a mark isn't going to give you a leg up on someone else out there who began using the trademark before you. The common-law protections of the first user always trump the rights of a registered trademark owner whose use began later. I have a client who just got a federal registration for his trademark and who just discovered that a lady in Oregon has been using the same trademark for years for a similar business. My client's registration gives him nationwide exclusive rights to his trademark, except in the part of Oregon where this lady does business.

Getting a state trademark is a simple and inexpensive affair. New York, Massachusetts and Connecticut all have fairly similar systems for trademark registrations. There's a simple form to fill out, the filing fee is $50.00, and registration generally happens in a matter of days from when you file. A state trademark registration lasts for ten years, and can be renewed infinitely for as long as you continue using the trademark. You generally don't need a lawyer to get a state trademark, it's a straightforward, non-technical, and clear process. And you don't need to be a resident of a state to get a trademark in that state. I've recommended clients doing business in the Berkshires to get state trademarks in New York, Massachusetts, and Connecticut. For $150, they get all the protection they'll need.

On the other hand, if you've got a business that's hitting a lot of states, or if you envision expanding into a nationwide or quasi-nationwide business, or if you're on the internet with clients and customers from everywhere, you should be thinking about a federal trademark. This is a considerably more involved endeavor. While I've had a few clients who've successfully obtained a federal trademark, I've had many more who have hired be after they'd screwed up the registration process, wasting many months and hundreds of dollars in the process.

Basically, getting a federal trademark is a big pain in the neck. The filing fee alone is around $300, the process will take about a year if everything goes smoothly, longer if there are complications. And there are usually complications. Invariably, a trademark examiner (usually a young lawyer at the PTO) will find something wrong with the application. Sometimes, the examiner is right, and an application is rightfully rejected or amended. I find, though, that a lot of the examiner's comments are trivial, or ill conceived. I've been told that the examiners work on a quota system, so that they have to find fault with a certain percentage of applications or they'll lose their job. Which is ridiculous, but it might explain why a colleague's trademark application, which included in its description the words "crackers and cheese," got kicked back to him from the PTO with a demand that the description be amended to read "cheese and crackers."

I suppose that the stringency at the PTO is a good thing overall, considering the power that's given to a federal trademark owner. The PTO should be careful about why and to whom its granting trademarks. But, really, cheese and crackers?

© 2002 Paul C. Rapp
This article originally appeared in The Artful Mind, and is intended to provide the reader with an awareness of copyright law and not legal advice.