Business names are POWERFUL.
One of the most common questions in the world: Who do you work for?
Answer: insert BUSINESS NAME.
Business names are everywhere. They are how the general public recognize products and services, associate those products and services with certain qualities, class, or image, and even compare it to other businesses. There is a lot of power behind a name! As such it is very important to seek competent legal counsel to help you navigate through selecting your business name. At Fortman Law we can help you evaluate your business name options.
One of the first things most entrepreneurs do is select a business name. Generally this is a decision based solely on personal preference and with no further thought. The problem is there is a lot to be considered in selecting a name – much more than “I like it.”
At Fortman Law we guide you through those considerations. We will help you determine if the name is available for you to register with the state of Missouri. And, more importantly, whether the name violates any trademark laws. The first step is relatively easy. We check the Missouri Secretary of State business records to determine if anyone else has already registered the name. If so, we help you evaluate other options. The state of Missouri will only register a name once and will prevent all others from registering an identical name. Why? Because of the power of a business name! It is important that businesses remain distinct from each other for the protection of consumers and business owners alike.
The next step is more complicated and despite being the most important, it is often overlooked by entrepreneurs (and their legal counsel).
At Fortman Law we search both the state and federal trademark registries for any potential conflicts. The reason this is so important is because trademark law is a powerful tool that businesses can use to protect themselves and their name. It is also a complex area of law. There is common law trademark rights along with federal trademark rights – each with their own set of rules and powers. Ultimately trademark law can effectively prevent you from using your business name. We have seen numerous instances where people (and their legal counsel) have not considered trademark law when they started a business. The major problem with that is you can be in operation and build up a your business under a registered business name with the secretary of state and still be told you have to stop using that name!
You are probably thinking – What?! How?! The best way we can show you is to give you an example…
We had a client contact us because he received a cease and desist letter in the mail from another company’s legal counsel. After speaking with the client we learned that he had hired legal counsel to help him register his business name with the Illinois Secretary of State. The name was available so he registered it and began to build his business using that name. He set up numerous things under that name including leases, bank accounts, utilities, licenses, permits, etc. He opened his business, bought signs, set up a website, got business cards, promoted the business, and more – all under that name. After a year of financial and sweat equity, his business was finally off and running….then the letter came.
The letter he received told him that he was in violation of the company’s trademark rights and they demanded that he immediately cease and desist using that business name. After a little research into the accuracy of their claims it became abundantly clear that they were right. He was violating the company’s trademark rights by using his registered business name! They company had a registered trademark for the same name our client was using. Then came the hard part….We had to tell the client he had to change everything to a new name. To say he was in shock and disbelief is an understatement. We told him of all the risks he ran if he continued to use the name, went over all of his options, and ultimately gave him our recommendation – change the name. He couldn’t believe what we were telling him. In fact, he didn’t believe us and sought other counsel hoping for a better answer. (which by the way – we encourage!)
In the end, the client came back a few weeks later to tell us we were right. He had actually hired another attorney who told him a “better” answer (aka one that he wanted to hear) and a couple thousand dollars later, he was in a worse position. As he said when he returned – “I should have just listened to you.” We assured him that it was okay and that we can figure it out. From there we patched things up with the other company, helped the client properly change his name, and sent him away with confidence that he will never again receive a cease and desist letter.
As you can see – a business name is powerful! It is very important you properly evaluate your name choice BEFORE you invest financial and sweat equity! That client learned a valuable (expensive) lesson that could have been prevented with one call to us and for dramatically less! If you are considering starting a business and in the process of choosing a name – STOP and contact us before you go anything further!