Brands: Namestorming

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SO "BE" IT: DeSando and partner Barry Falck Markham Johnson

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MAKING IT YOURS

The game isn't over when you find a name you like. You have to make sure you have the right to call it your own. To avoid potentially costly missteps, hire an intellectual-property lawyer. Expect to pay your attorney up to $10,000 for all the searches and filings. That might seem like a lot, but according to Ilene Tannen, partner at New York law firm Jones Day, the costs of disputing a lawsuit for trademark infringement, along with lost goodwill, advertising, and packaging costs if you have to change your name, can run to tens of thousands of dollars.

After narrowing the field to half a dozen names, see whether any have been trademarked. Start with the Patent & Trademark Office database, which lists all names filed with the federal government for the purpose of doing business. The owner of a name registered with the PTO trumps anyone who comes afterward, as a federal trademark holds throughout the country. You can search this database yourself at no cost, but an intellectual-property lawyer can do a better job. Inexperienced searchers, for example, won't know to search the different product classes. An expert can also help you find names that sound like yours, which may take precedence even if they are spelled differently.

Next, you'll need to consult state registries. To save money, businesses with limited geographic scope, such as restaurants and dry cleaners, typically register their names only in the state where they do business. No free, central repository exists for the state registries, so for this leg of the journey, you should hire an intellectual-trademark attorney. Most charge in the range of $400 an hour. Trademark specialists will also search databases such as CT Corsearch and CCH for so-called common-law names. Although these names, which specialists cull from trade magazines, local publications, and other sources, have not been registered, trademark law gives precedence to the first user. Companies with state-registered or common-law names can use their mark either locally or nationally, if no one else has a nationwide claim to the name. And be aware that if a business owner can prove he has been using a state-registered or common-law name nationally before you filed for a federal trademark, you could lose your right to the name.

Once your name checks out, you must file the appropriate documents with the federal or state government, effectively serving notice that you intend to do business under the name. For a federal filing, you'll have to register your name for particular classes of goods, of which there are 45, ranging from musical devices to hand tools to clothing. The fee per class is $375 ($325 if you register online at uspto.gov), with the term valid for 10 years. After five years, you must also file a document of continued use to keep your trademark active. Fees for state registrations are typically half the federal rate.

After you've filed your trademark, you can begin using it immediately. But you'll still have to keep your fingers crossed. The PTO could reject a name for any number of reasons: It may be overly vague, say, or lewd, scandalous, or inaccurate, or it may span several classes that you have not included in your filing. Names can also be dinged for being generically geographic, such as Bermuda Onions or Idaho Potatoes. Intellectual-property lawyer Herbert Hammond, a senior partner at Thompson & Knight in Dallas, says: "You can't use a trademark if it would deprive others from using a term that geographically describes their product."

If you plan to operate online, you'll have your own peculiar challenges. Just about every domain name known to man has already been registered, which explains the proliferation of nonsensical names and strange spellings, such as Flickr. "Finding a clean, top-level domain name is extraordinarily difficult," says Shore. Even if you manage to get a federal trademark for a bricks-and-mortar business, you might find someone using your name online or squatting on it: Squatters buy names with no intention of using them, other than selling them to businesses later on. If the user is a legitimate business, you're probably out of luck, and you'll have to find another name to use online. If you run into squatters, you will either have to buy them out or take them to court to get the name that should by rights be yours.

Whatever the obstacles to finding a good name and making it yours, resist the temptation to settle for one that you suspect is uninspiring. After all, if you can't get excited about it, your customers won't, either.

Back to BWSmallBiz December 2007/January 2008 Table of Contents