Picking a Brand Name is More Complicated Than You Think

Every business needs a business name and every product or service offered by a business usually needs to have a brand name. Legally, choosing these names can be tricky. For example, even if a Secretary of State approves a name for a corporation or limited liability entity or partnership, if that name infringes a name protected under the federal Trademark Act, the trademark owner can stop the use of that state approved name. And under trademark law, the trademark owner not only can stop identical names, but can stop “confusingly similar” names as well.

The legal terms for brand names, business names and product names that are used to give consumers a way to identify and distinguish the businesses, products and services identified by one of these names are (1) trademarks, for names used with products, and (2) service marks, for names used with services.

A “product” is a tangible good. A “service” is an intangible offered for the benefit of its users. For example, NIKE is a trademark for athletic wear. A law firm name is a service mark for legal services. Sometimes, a name can be both. McDonald’s is a trademark for hamburgers and other food items and also is a service mark for restaurant services.

Trademarks and service marks (I’ll refer to both as “trademarks” or “marks”) are protected under the common law, state trademark statutory laws and the federal Trademark Act, as a trademark lawyer Los Angeles CA trusts can tell you. In the U.S., common law protection arises from using the trademark with a product or service. Trademarks also can be registered under state law and the federal act, but only after they have been used respectively in the state and in interstate or foreign (between a US state and another country) commerce. Under the federal act, one can file an application to register a trademark before it’s used, but the registration can’t issue until there’s been actual interstate use. There are also international treaties that allow nationals of other countries to file their foreign trademark applications or registrations with the U.S. Patent and Trademark Office.

Trademark law protects the owner of a valid trademark by giving it the exclusive right stop the use by later users of “confusingly similar” marks. A confusingly similar mark is one that if or when used will cause relevant consumers to mistakenly believe that the products or services sold under the marks are connected or related in some way. The more famous the trademark owner’s mark, the more protection it gets. We’ve had the good fortune to represent the owners of famous marks and on their behalf have stopped the registration or use of many confusingly similar marks. Some examples are:

CityBroker for financial services stopped by Citibank for financial services
Fun Dough for modeling compound stopped by PlayDoh
El Gallo energy drink stopped by Gallo for wines
Karaoke Idol for karaoke contests held in bars stopped by American Idol

Each of the federal circuits and the U.S. Patent and Trademark Office have variations on the test for determining whether two marks are confusingly similar. The usual factors considered are the inherent “strength” of the plaintiff’s mark (“strength” being a hybrid legal and factual analysis), the fame (or lack thereof) of the plaintiff’s mark, the visual and contextual similarities of the marks, the commercial relatedness of the goods or services in issue, the overlap if any in consumers and channels of trade and marketing, the number of third party similar marks for commercially related surveys, any actual consumer confusion, the defendant’s intent in adopting its mark, and depending on the circuit, other factors. Thus, just eyeballing two marks for similarity in appearance is only one factor. In the above PlayDoh case, the similarity in meaning and connotation (proved through a linguistic expert) coupled with the fame of the PlayDoh mark resulted in keeping Fun Dough from being federally registered.

So before advising a client that it can use names in their businesses, the best practice is to have an experienced trademark lawyer order and review professional trademark clearance searches and perform an analysis based on the factors described above. And just to add to the fun, these rules also apply to logos, packaging design, product design, and any other indicia that can be used as a trademark.