Since businesses are registered at the state level, it is possible for your company to have the same name as a business in a different state. However, this can lead to trademark issues and other problems. By choosing the same name as another business, you risk being forced to change your name or even pay monetary damages to the other company. Sharing a name with another company can also make it difficult to register trademarks for your own business.
Trademark laws help shield businesses from unfair competition by protecting logos, symbols, names, and slogans that uniquely distinguish one business from another. The reasoning behind this is that having two businesses operating with the same name or other identifying features can cause consumer confusion. One business may attract the customers of another simply because the consumer cannot tell the difference between the two.
For businesses operating in different states, this may or may not be an issue. If you’ve settled on a name being used by an out-of-state business, consider the following before moving forward with the name.
- Is the other business in the same industry?
- Is the other business in the same geographical market?
- Who was using the name first?
- Who registered the trademark first?
Your answers to these questions will help you determine if sharing your business name with another company will cause consumer confusion and get an idea of who would win in a legal fight for the name.
Based on the test above, there are some scenarios in which using the same name as another business is generally permitted.
- You operate in a completely different industry than the other business in question.
- You operate in an entirely different geographic market.
- Your online presense and/or e-commerce will not create consumer confusion.
If you are unsure about any of these points, it is important to consult an attorney on the matter.
If there is any potential for consumer confusion, you will not be able to use the same name as another company. Using the same name as another business will typically not be acceptable when:
- You sell different products or services but operate within the same industry as another company.
- The name is in use by a major national brand, regardless of industry.
- The other business registered for trademarks before you did.
When it comes to trademarks, things can get complicated. There may be a situation in which you are the first to use your business name, but another company is the first to register their trademark with the state or federal government. In most cases, courts will allow you to continue to use the name in your market but limit your business activities to your locality. The only exception is if you are able to prove that the other company had knowledge of your business prior to registering its trademark. This is considered willful infringement and will typically result in a cease and desist letter to the infringer and the possibility of civil or criminal penalties against them.
In most cases, when two businesses with the same or similar names are operating in overlapping markets and locations, the conflict will be handled through an administrative proceeding with the US Patent and Trademark Office or with a lawsuit brought by one of the owners. These cases can become costly for businesses, so finding a way to settle the matter out of court is beneficial.
When choosing a name for your business, the first thing you should do is simply type your desired name into a search engine. This is a quick and easy way to see if anyone is using the same name or something similar, and what that business does. Once you’ve completed this step, there are a few other resources available to locate any businesses already using the name you’ve selected.
- Check the fictitious name database. This is a list kept by your state or county government that records all fictitious business names, also known as “Doing Business As” (DBA) names, in use in their jurisdiction. Many small businesses will register a DBA before registering a trademark or even using the name for their business.
- Check your state’s business filing office. This office will have a list of all registered business entities in your state such as corporations, LLCs, or limited partnerships.
- Check domain names. Another good way to determine if your business name is available is to see if the applicable domain name has been taken. Domain name searches are available through most domain registries and web hosting services.
Once you’ve completed this preliminary research, it’s time to conduct a trademark search. While a business is not required to register its trademarks to claim them, those who do are often afforded more protection than those operating with unregistered trademarks. If the name you’d like to use has already been registered as a trademark in another state, this can add a layer of risk to using the name for your business.
The US Patent and Trademark Office maintains a searchable database called the Trademark Electronic Search System (TESS). This database contains every trademark registered with their agency. Checking the database will help avoid any willful infringement claims in the future as well. You should also consult the state trademark databases in any states where you plan to do business.
If after all this you find that your business name is not in use by another business in your state or your industry and has not been registered as a trademark by anyone else, you may consider registering this trademark yourself in your state and with the US Patent and Trademark Office. While not required, this will provide you with an added layer of protection if your claim to the trademark is ever challenged.
Trademark law is complicated, so it is always a good idea to consult with a trademark attorney if you have any questions or concerns regarding your business name. An attorney will be able to conduct more thorough research and offer expert advice on whether you should use a given business name and if and when you should register a trademark. Trademark attorneys will also ensure proper compliance with all legal requirements and deadlines throughout the trademark process. You can find an attorney by searching the American Bar Association or your local and state bar association for a trademark attorney best suited for you.