Choosing a Name for Your New Business: Trademark Law Issues

One of the first choices a new business must make is what name to give the business. Businesses think first and foremost about the marketing and branding considerations going into the name. Is it a memorable name? Does it help to create positive images in consumers’ minds about the product or service? All of these concerns will help businesses create a universe of names from which to choose.

In addition to the business issues involved in choosing a name, businesses should also consider trademark law. First, a new business should consult with legal counsel to make sure that the names it is thinking of using is not already taken by another business. If another business is already using the name, that business could assert a claim against the new business for trademark or service mark infringement.

Second, under trademark law, some names are easier to protect than others. For instance, famous marks like Exxon and Apple (for computers) are entitled to strong protection. By contrast, generic words such as “milk” and “car” are completely in unprotectable when used with the products they describe. No one is permitted to gain exclusive rights to use these common words.

The strongest types of marks are either made-up words having no meaning in English or have a meaning, but not in connection with the product with which it is used. Made-up marks include Exxon and Kodak, which are referred to as “fanciful” marks. English words unconnected with their product are “arbitrary” marks, and include Apple for electronics and Camel for cigarettes. Fanciful and arbitrary marks are entitled to the strongest protection under the law, and are therefore preferable, other things being equal.

The next strongest marks are called “suggestive,” because the mark is suggestive of a characteristic of a product without directly describing the product. It takes a leap of imagination to connect with them the product or service. For instance, the word mark “poison” when used with perfume suggests danger, intrigue, and excitement without directly describing perfume.

The weakest marks are called “descriptive,” because they describe a product or a characteristic of it. For instance, words like “best,” “giant,” or ” gold medal” are descriptive. Descriptive marks are unprotectable unless they acquire what is called “secondary meaning.” A business can obtain secondary meaning of a mark via repeated significant advertising that links the mark to the business as the source of the product. All three of the descriptive marks above have acquired secondary meaning, namely Best for mayonnaise, Giant for groceries in the DC area, and Gold Medal for flour. The companies using these marks have heavily advertised them with their products and thus can protect them. For other products, however, these words are merely descriptive and are unprotectable.

Finally, as stated above, generic words such as milk and car are completely unprotectable. Interestingly, the generic words “aspirin” and “gasoline” used to be trademarks. Because the companies that created them failed to protect them, and people used them as generic words, they are now unprotectable in connection with the products to which they refer.

Our firm has helped numerous businesses to create corporations and limited liability companies. We help our clients in choosing a name by checking for possible prior use. We also counsel them on what name is most protectable from a trademark law perspective. Choosing a good name from a trademark law perspective will help a business start on the right foot.

StevenSWu3

Attorney Stephen Wu is a partner in the law firm of Cooke Kobrick & Wu LLP in downtown
Los Altos.  He can be reached at (650) 917-8045 or at swu@ckwlaw.com.

 

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