Choosing a Startup Company Name

You’ve just brain-stormed with your creative colleagues and come up with a fantastic name for your new start up, but STOP and consider:

1. Can you REGISTER it?

Will your chosen name distinguish you from your competitors? In other words, is it distinctive or does it merely describe the goods or services you provide or a characteristic of them?

If it’s distinctive or subtly alludes to the nature of the goods or services, it will be registerable. If not, you will be refused registration.

2. Can you USE it? The last thing you want is to launch and a cease-and-desist letter to arrive the next day alleging trade mark infringement and/or passing off.

Although, question 2 is, in practical terms, more important and urgent to address, the two questions are related. The more distinctive your brand name, the less likely you’ll run into infringement issues. Trade marks that stand out from the crowd in a given sector is legally stronger, easier and cheaper to register and, ultimately, by affording you better protection, also much easier to enforce.

1. Can I REGISTER?

Examples of distinctive brand or trading names (i.e., those fulfilling the definition of a trade mark: a sign capable of distinguishing your goods and services from those of others) include:

• Invented words, e.g., KODAK, EXXON, ROLEX, AUDI
• Arbitrary words: Those that have no connection with the nature of the goods or services, e.g., APPLE for computers, BOOTS for pharmacy goods and services
• Suggestive words, e.g., COPPERTONE for suntan oil and AIRBUS for aircrafts. These allude to a characteristic of the goods or services without directly describing them. The consumer must use a degree of imagination to understand what goods / services are being offered. They are great from a marketing point of view, as they subtly describe a positive attribute of the goods / services or their USP. Think of the trade mark NIKE and its ‘swoosh’ logo for sports shoes and clothing. Nike is the Greek winged goddess of victory and the logo symbolises the goddess’ wing. Both bring to consumers’ minds speed, movement and success.

Other factors to take into account when choosing a brand name:

• Is the name memorable?
• Are there variations on spelling? e.g., gray/grey, Steven/Stephen
• Will it work abroad? It’s best to avoid anything that has negative or embarrassing connotations in a foreign market into which you might expand. Daewoo adopted the name ESPERO for a new model of car, which means “I hope” in Spanish!
• Avoid comic plays on famous marks. You can be sued even in relation to dissimilar goods and services where the registered trademark has a reputation and the unauthorised use is detrimental to the mark. Even if there’s no confusion, association between the trade marks is generally enough. So, no “free rides” !

Bad trade mark choices are those that describe the nature, kind or quality of what is on offer. Everyone should have the legal right to use such terms in describing their goods or services. Consequently, they are considered not deserving of protection. For example, Premium Strength for lager or toilet paper, Apple for apple juice, Creamy for yoghurt, Glass Company for glass suppliers, or very common surnames.

Whilst it is possible to acquire legal rights through use (so-called “acquired distinctiveness”), such rights can take years to build up and in the meantime your trade mark and the goodwill it generates will be vulnerable. Generally, to succeed in registering such a trade mark, you will need to prove around five years’ use and demonstrate this with documentary evidence. However, such trade marks do exist, e.g. Booking.com

Takeaway for Choice of Name: Think of at least five names, test them (confidentially) on potential employees, partners, investors and customers. Then talk to your legal adviser before you use.

2. Can I USE?

There are two types of clearance searches:

• Identical search: This is a search against your list of possible names. It will flag up potential clear clashes with earlier marks.
• Full Clearance Search: This is the most comprehensive search of the Trade Marks Register and will provide you with a full assessment of the legal risks associated with using the proposed mark for the goods and services of interest in a given territory.

Such searches should be done by legal advisers / trade mark attorneys, but with vital input from you. For instance, think about any potential for business expansion into new markets or sectors and extensions of your brand. This will impact on the extent of the search since infringement rights are territorial and linked to the protected goods and services.

However, there are some preliminary steps which you yourself can do, especially as you know your market and competitors. Bear in mind that these are initial checks and are not sufficient to clear the mark for use. For instance:

• Do a Google search on your name. Is the name already in use, where and in relation to what goods or services?
• Do a UK Trade Marks Registry search: https://www.gov.uk/search-for-trademark
• Do a company name check: https://find-and-update.company-information.service.gov.uk/
• Look in trade directories or trade press
• Do a search on a domain name site such as: https://www.godaddy.com/en-uk/domains, https://www.name.com/domain/search
• You have the best knowledge of your sector, so think about the names of your competitors, suppliers and even customers.

These checks are important for the reason that, whilst trade mark registration is the best form of legal protection, owners of unregistered trade marks can prevent use if there is a risk of confusion amongst the public between your business and theirs (a legal action known as “passing off”). Furthermore, a full clearance search only reveals what is on the Trade Marks Register on a specific day and this might substantially precede your launch.

A final word:

A trade mark can consist of a word(s), a logo or device, or combination of the two, as well as non-conventional marks such as colours, sounds, smells, slogans, numbers and letters, the 3-D shape of the product or its packaging, patterns and monograms.

So, be imaginative and novel, and wrap your “baby” in a protective legal “blanket”!

This article is intended for general information only, applies to the law at the time of publication, is not specific to the facts of your case and is not intended to be a replacement for legal advice. It is recommended that specific professional advice is sought before relying on any of the information given. © Jonathan Lea Limited.