Choose a Business Name

June 1, 2011

One of the most important decisions made in organizing a startup is selecting a name for the business. Entrepreneurs spend dozens if not hundreds of hours developing the name of each new business they start to ensure the name will represent the business well and evoke in consumers the feelings or emotions the business seeks to induce (e.g. trust, reliability, fun, etc.). Creative brainstorming is, however, only the first step to naming a business. Once a few prospective business names are selected, there are several more considerations before time and money are spent officially adopting one of the prospective business names.

DOMAIN NAME AVAILABILITY

In order for a potential business name to be worthy of adoption, there must be an internet domain name available which is closely related to the prospective business name. If the name chosen is "ABC Bakery" and abc.com is taken, and abc.com is not a bakery, something like abcbakery.com or similar must be available.

It is not a good idea to buy into any series of domain names if the dot com domain is not available. Thus, if abcbakery.com is taken, abcbakery.net, abcbakery.us, or abcbakery.info are not acceptable replacements. When a new customer hears about ABC Bakery and wants to find store locations or hours, that customer is not likely to search for a dot net or dot info website, but go straight to the dot com domains. A business website should always be easy for its customers to find.

LOCAL AND STATE REGISTRATIONS

If the prospective name is to be used in naming a business entity (e.g. Corporation, S-Corp, LLC), check with the secretary of state to see if the name is already in use. Following on with the bakery example, if the secretary of state already has an ABC Bakery, Inc., registered in its database, then using ABC Bakery, Inc. will not be possible, however ABC Bakery, LLC might be possible if there is no entry for ABC Bakery, LLC.

If the corporate or LLC name is taken, or if the business is to be operated as a sole proprietorship, check with the county recorder's office to see if the name is available as a fictitious business name (commonly referred to as a DBA, short for Doing Business As). If available, it may be possible use a DBA to legally operate as John Smith, Inc., d/b/a ABC Bakery or John Smith d/b/a ABC Bakery.

FEDERAL, STATE, AND COMMON LAW TRADEMARKS

The United States Patent and Trademark Office provides internet access to its "TESS" database allowing anyone to search all trademark applications and registrations, and most states provide online access to the trademarks registered in state. Searches of these databases will yield the uses of registered trademarks. However, ownership over trademark rights is established via bona fide use in commerce, and no federal or state registration is required for trademark ownership. Therefore, it is a good idea to conduct a common law trademark search in addition to searches of the federal and state databases. Researching common law trademark use may be accomplished in one of several ways, the most frequent utilized being a search engine query followed by a careful review of the results returned.

Searching federal, state, and common law databases of registered trademarks is not as straight forward as searching for business entity names and DBA filings. In business entity or DBA research, an exact match between a potential business name and the database of existing business names is sufficient. However, trademark law is based on a legal theory known as "likelihood of confusion" and not exact matches. A potential business name need not be an exact match to an existing trademark in order to infringe upon that existing trademark, but merely create a likelihood of confusion in the minds of consumers. When evaluating your potential business name to a database of trademarks, it is always a good idea to consult an attorney who is knowledgeable in trademark law. The same trademark attorney will also be able to assist you in registering the prospective name as a trademark once it is used in commerce.

FOCUS GROUP TESTING

In the search for uniqueness, business names can end up being obscure. Put a focus group together and test the focus group on the spelling, pronunciation, and overall impression of the potential business name. If a traditional focus group is too expensive, test the name on friends and relatives, encouraging them to be brutally honest about the their opinions.

If a name is too difficult to spell or pronounce, it will likely lead to less referrals and many misspellings in internet searches. Remember, customers need to be able to find a business website easily.

CONCLUSION

When a prospective business name is found which has domain name availability, is not registered with the secretary of state or the county recorder's office, is not used in commerce as a trademark, and is well received under focus group testing, the time and money required to adopt the business name will be well spent.

Warm Regards,

Michael J. Leonard, Esq.
Attorney at Law
San Diego Corporate Law

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