You and a business partner decide to start your own company. Before you make this news public, you spend a lot of time branding. You come up with a company name. You draft a vision statement. You decide on the color scheme that you want to use and a slogan for the business.
Unfortunately, after doing all of this, you find that another company has the same name that you wanted to use. You’re left wondering if it’s possible for two companies to have the same name or if that’s going to be an intellectual property violation on your part.
The issue revolves around consumer confusion
The primary thing to remember is that the rules around having unique company names were created to prevent consumer confusion. The goal is to keep one company from – intentionally or unintentionally – taking the hard work of another successful company and benefitting from their efforts by drawing market share away from it with similar branding that makes customers think that the two enterprises are one and the same.
There are certainly cases in which the same name can be used by two companies because no customer confusion will result. An example of this is when both companies are involved in very different industries. For example, perhaps you are starting a sandwich shop and the other business is a tech company. No consumers are going to be confused because they’re looking for such vastly different goods and services, so having a similar name would not be prohibited. Think Delta Airlines and Delta faucets.
Another thing to keep in mind is geography. If the other business is in the same area as yours, that is more problematic than if it is located in a different state or a different part of the country. Two small businesses in opposite states are probably not going to cause a lot of customer confusion – although the rise of the Internet and the global marketplace has changed this risk to some degree.
It is important to take thoughtful steps as you launch your business. Make sure that you know about all of your legal options and be proactive in seeking legal guidance regarding intellectual property matters to keep disputes and costly missteps from slowing you down.