How to avoid big trouble with a little search
By: Thomas J. O'Connor
Many business people think that if they chose a new company name and the state accepts it for filing (in Articles of Incorporation or Article of Organization), then they own rights to that name. This is a dangerous misconception.
What people miss is the fact that the rule for corporate and LLC names is different from the rule for trademarks. Fortunately, one can do a couple of easy searches on-line to minimize your risks.
Let's say you are in the software business and you want a new image for your company and you decide on the name "ESSENTIAL SOFTWARE SOLUTIONS OF MICHIGAN." You ask your lawyer and the name is available in Michigan. So the next step is to file your corporate papers and start using the new name, right? Everything seems fine. But is it?
No, an essential step has been missed. Using that new name will infringe someone's registered trademark. There is a company in Colorado with the name "Essential Software Solutions, Inc." And they have registered that name as a trademark. The state of Michigan (and every other state) will let you use a name, and let you file Articles, as long as the name is not exactly the same as another name registered in Michigan. But trademark rights are nation-wide. If the other company has already registered their name as a trademark, the fact that the conflicting companies are geographically separate will not be a defense.
Then there is the problem that state standards for naming conflicts are completely different from trademark name conflicts. To be a trademark infringement, the names do not have to be identical. They only have to be close enough so that when applied to the relevant products are likely to cause confusion.
Even if this Colorado corporation was registered to do business in Michigan (or even incorporated in Michigan), the state would have still allowed you to form a corporation named ESSENTIAL SOFTWARE SOLUTIONS OF MICHIGAN because it is not exactly the same name. But it would probably be an infringement because the names are close enough that, when used in connection with their respective products, they are likely to cause confusion.
It is easy to minimize these risks by doing a couple of quick internet searches. First go to the federal trademark site, www.uspto.gov, click on TRADEMARKS, then on TRADEMARK SEARCH. Put in the name you want to use and see if someone has already registered the same name or something similar. That is the largest risk because someone who has gone to the expense of registering a trademark is more likely to protect it by suing infringers. It is important to note, however, that even an identical name is not necessarily an infringement if the products are far enough apart so as not to cause confusion.
While you are at it, just do a simple Google search as well. Even if Essential Software Solutions, Inc. of Colorado had not registered its trademark, it still owns the rights to the name if it was the first to use it in commerce.
For questions about this contact us.