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Get your startup name cleared to avoid trademark confusion

Updated: May 13, 2020

Originally written by Katelin Kennedy

One of the first things many startup founders do when setting out to start a new company is think of a name. You may have a brainstorming session with your co-founders to think of the perfect name---and hopefully you've read up on how to pick a name that makes for a strong trademark. Before you become attached to a particular company or product name, you should get a trademark clearance search to ensure there are no conflicts. You don't have to be a branding expert to know that having to rebrand your startup because of a trademark conflict is less than ideal; and potentially disastrous. Keep reading to learn a few basics about trademarks and save yourself from the dreaded rebrand.

1. You cannot incorporate using a company name that is already in use.

This one is fairly obvious. At the state level, you can search to see if another company is already incorporated under the name you want to use. If you aren't ready to incorporate, you can reserve your name (assuming no one already has it) before you actually file your incorporation documents. You may also consider incorporating under a company name that is available, and using a trade name as the brand name you want the public to associate with your company. But be careful, because if another company is already using the trade name you have in mind, you may have a likelihood of confusion issue when you try to register the name as a trademark with the US Patent & Trademark Office. Which leads me to the next point...

2. You cannot use a brand or product name that is likely to cause confusion with another existing mark.

"Likelihood of confusion" is a term of art in trademark law. You may think it means you can't use the exact same mark as someone else, but it's a bit more complicated than that. The USPTO Trademark Manual of Examining Procedure provides a concise explanation:

"The issue is not whether the respective marks themselves, or the goods or services offered under the marks, are likely to be confused but, rather, whether there is a likelihood of confusion as to the source or sponsorship of the goods or services because of the marks used thereon."

In other words, if consumers would be likely associate your mark with an existing mark, your mark may be denied or cancelled due to likelihood of confusion. Here's an example: You want to start a beverage delivery company called StarBrews. What company did you automatically think of when you read StarBrews? Even though Starbucks sells goods as opposed to providing a delivery service, consumers could think that StarBrews is a new program sponsored by or affiliated with Starbucks. In this example, you would register in a class related to services---which would help your argument that consumers wouldn't associate your beverage delivery service with the coffee sold by Starbucks---but, Starbucks could still challenge the mark (and would probably win) based on likelihood of confusion.

Some of the factors that are considered when assessing likelihood of confusion between two different marks include: *To avoid losing you to TL;DR, this list is not exhaustive.

  • Similarity or dissimilarity of the marks as to appearance, sound, connotation and commercial impression

  • Similarity or dissimilarity of the goods or services as described in an application or as registered in connection with the existing mark.

  • Similarity or dissimilarity of how the goods or services represented by the marks are sold and distributed.

  • Whether the goods or services are usually sold to impulse buyers or sophisticated/careful buyers. In other words, if a purchaser typically gives a great deal of thought before buying, they are less likely to confuse the two marks.

  • The fame of the prior mark (based on sales, advertising, length of use). Nike, Apple, or Verizon, for example.

3. Your mark may create a confusion issue with an existing mark, regardless of whether the existing mark is registered or unregistered.

Trademark priority is based on "use in commerce." Use in commerce essentially means, whoever is using the mark in connection with offering and selling their goods or services to the public has the superior trademark rights---even if they have not registered their mark with the USPTO.

Many people search the USPTO database and think they are in the clear if they don't find a registered mark that is exactly the same. Not only is this problematic because of the confusion issue described above, but the USPTO database does not reveal potentially conflicting marks that are not registered. Someone who started using a confusingly similar mark before you in connection with goods or services that are related to yours can file an application with a petition to cancel your application or registered mark based on their prior use of the confusingly similar or mark.

4. A clearance search will save you time, money, and rebranding disaster.

You should get a comprehensive clearance search before settling on the name you came up with during that brainstorming session. The consequences are not insignificant. The USPTO takes approximately 6 months to process applications. That could mean 6 months of valuable time and money lost building your brand around a name that can't be used. I've known startups that ultimately shut down because their brand and momentum had been built around a mark that either couldn't be registered or infringed on an existing mark. Failing to properly protect your IP may also cost you business deals with potential investors or acquirers down the road---or it could sink your battleship altogether.

In short, getting an attorney involved early goes a long way to ensuring you can protect your brand name. Reach out to Fallone SV through our contact page if you need help with the trademark clearance search and application process!

*This blog provides general information for educational purposes only. It is not intended to constitute specific legal advice and does not create an attorney-client relationship.*


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