Brower: On the complexities of naming a business
Andras, owner of what is now Moon Frog Coffee Shop in Winter Park, did everything right when it came to naming his business the first time.
He pondered the idea behind his business and ran it by many people for a market test. People liked it. He hired a lawyer to help file with the secretary of state and became reassured that, in Colorado at least, his business trade name wasn’t an exact copy of another similar business. He paid his fees to the state, registered the business and moved forward.
But, alas, his original business name, Stoked Meeting House, after more than a year, got the attention of another similar business with a similar name. He received notice that this similar business in a state far away had the same name and “owned” it because that business had been using it far longer than Andras.
They also had registered it with the United States Patent and Trademark Office. Anyone can run a name through their database to see if the same or a similar name is registered for use in the same type of business. Yet no inexpensive search is 100% guaranteed.
After a lot of deliberation, Andras decided, in consultation with his attorney, to simply change his business name. With a new name, there’s no conflict, no threat of a problem, and he can get on with business. Literally.
Which is why he has a new name on that main street coffee shop and meeting area: Moon Frog Coffee Shop. I like the new name, which gets its inspiration from the NASA photo depicting a frog flying through the air in the glowing blast of a rocket launch (Google “NASA frog” if you’re curious.)
And besides, the timing was good for Andras because his business model was changing a little at the same time (the candy store isn’t there anymore, having moved to a new location in Winter Park) and he’s going to start roasting coffee.
Which brings up issues relating to names and trade names that all business start-ups discover. First, pick a name or trade name that reflects what the business does.
Then file with the Colorado Secretary of State. When the name of the business is entered in the state’s database, it will automatically be matched with other similar names or even the same name. It’s usually good to have a name that isn’t exactly like another name, which is why the database pops up. Register, pay the fee, and the trade name is on the books.
But that doesn’t mean your name is absolutely protected, even in Colorado. Somebody else can choose the same name. The only recourse in that case is to threaten legal action if “damage” to your business can be shown.
A business can go another step in the naming game, which is expensive. That is to register the trade name at the national level, which then avails a search of the national database of trade names. Most likely, there will be a name similar to the one chosen. At least the business knows this starting out.
But going the national route doesn’t solve all the problems because some of the state trade name databases aren’t reflected in the national database, so to be really sure a person can search the databases of all 50 states for similar trade names.
Which is all a long way of saying a business doesn’t really “own” a name in the sense of being able to claim it uniquely. The way that actually happens is market dominance. Think Apple, Nike and Coca-Cola. They have the resources to really own their names and litigate to protect them.
So pick a name that is best for the business and hope that someday you’ll have the market dominance to protect it. There’s always some risk in starting a business and the possibility that you choose a name someone else has used longer is one of those risks. However, conflicts come up rarely.
And remember, a business always has the right to use his or her own name.
Patrick Brower is the Enterprise Facilitator for the Grand Enterprise Initiative. He offers free and confidential business management coaching to anyone wanting to start or expand a business in Grand County. He can be reached at 970-531-0632 or by e-mail firstname.lastname@example.org.
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