You’ve found out that someone else is using a similar business name to yours. What do you do?
There are a number of different factors to examine in this process and you may have some legal recourse. Getting another business to change its name that’s similar to yours depends on a few things.
Let’s explore these different options.
If the Business Is in Another State or Industry . . .
If you’re wondering, “Can my business name be similar to another?” The answer is, yes. The biggest factor in business naming disputes that are examined in court cases is customer confusion. This comes down to geographic location and industry.
If the two similarly named businesses are in different states and/or operate in different industries, then there’s likely to be no or minimal customer confusion. In this case, it’s unlikely that you would be able to legally get the other business to change its name. Your only recourse in this instance would be to change your own business name.
If your business operates nationwide or in multiple states and the other business operates in just one, you may have more standing to force the other business to change its name as it could cause confusion for your customers.
The first step, in this case, would be to send the other company a cease and desist letter and involve legal counsel. If the cease and desist letter doesn’t work, you may have grounds for a lawsuit.
If Your Business Is a Sole Proprietorship . . .
When determining your action steps for when someone else is using a similar business name to yours, it’s important to consider which business entity you’ve chosen.
If your business is a sole proprietorship, you get the benefits of being a business owner but have no business name protection. As a sole proprietor, your business name is automatically your legal name. Another option is to file for a DBA or "Doing Business As" name. Once filed, your assumed business name or DBA becomes the legal name of your business. No one else in your area can register or use the business name you've filed as your DBA.
If you’re a sole proprietorship and another business is using a similar business name to yours, you have no protection or legal recourse to get them to change their business name. You do have the option to change your business name or to choose a different business entity type, register your business name and try to file for a trademark.
If the other business has already filed for a trademark or is registered to use that business name in your state, you won’t be able to use that name, and you’ll be required to change the name of your business.
If Your Business Is an LLC or Corp . . .
If your business is an LLC or a corporation, you have more business name protection than a sole proprietorship. As an LLC or corporation, you had to register your business name at the time that you formed your business entity.
During business formation of an LLC or corporation, you must search the business name registration in your state and choose a name that’s not already taken. Once you’ve found a name that’s not already in use, you register it as your business name.
Each state has slightly different regulations for how different a business name must be from others, but in general, they must be different enough to not cause confusion. If another business in your state is using a similar name, start by finding out if that business is registered as an LLC or corporation in your state. If it’s not, it may be a small sole proprietor who you could ask to change their name so as not to cause confusion.
It’s important to remember that LLCs and corporations must include their business entity as part of the legal name of their business. For example, if your business is a registered LLC, it would be called "ABC Marketing, LLC." If another person tried to use that name, but as a corporation, that isn't different enough to be distinguishable and wouldn't be allowed.
If You Hold the Trademark . . .
The best-case scenario for finding another business using your business name is holding a trademark for your name. If you are the trademark owner and your name is being infringed upon, you can file a civil lawsuit in either state or federal court.
To prove infringement in a trademark case, you must show:
- That you own a valid trademark
- That you owned that trademark before the other business
- That the other business's use of the mark is likely to cause confusion
If you hold the trademark and are able to prove infringement in court, your next steps could include:
- A court order for the other business to stop using your trademark
- The other business owner must destroy all material using the mark
- Financial reimbursement for damages
A trademark isn’t a guarantee that no one else will use a similar business name, but it’s the best legal protection you have against this happening. And while the legal proceedings can be costly and time-consuming, it can be worth it to protect your business.
There are a number of factors to consider if your business and another is using similar business names. For example, can two companies have the same name with a different spelling? All in all, what’s important to remember when it comes to business names is customer confusion. If the two businesses have the same name but different spellings, that could very likely cause customer confusion — especially if both are large, nationwide businesses.
For example, you couldn't open a grocery store named "Hole Foods" because it would be too similar to the well-known "Whole Foods" grocery chain."
How to Protect Your Business Name
If you want to protect your business name, there are a few steps that you can take. These steps are a great way to proactively protect your business name.
Perform a Business Name Search and Register Your Business
The first step in protecting your business name is to register your business as either an LLC or a corporation. When you register your business, you must perform a business name search, which will identify whether or not the business name you want to use is already in use by someone else.
A business name search will tell you whether or not someone else is using a business name in your state. In addition to a business name search, you can find out if anyone in the country is already using your business name by performing a trademark search. To conduct a trademark search, you can perform a search on the U.S. Patent and Trademark Office website.
Get the Domain Name and Social Media Handles
Another great way to protect your business name is to purchase the domain name that would be associated with your business and reserve the social media handles. If these aren’t available, then it might mean that the name is in use by another person or business.
Try similar variations to see if you can get a close enough match. As well, you can find out who is using the current domain and social handles and what their business is. They may be willing to give or sell them to you.
Get a Trademark
The best, most certain way to protect your business name is to register for a trademark. A trademark is a word, symbol, phrase or design that can be used to identify a business or its products. A trademark is the mark used to identify a business and differentiate it from other businesses.
You can file for a trademark on the USPTO website or use a trademark service to save yourself time.
Finding out that another business is using a similar name to yours can bring up a lot of emotions for a small business owner who has put their time, money and effort into building a business. Depending on a number of factors, there are things you can do to remedy that situation.
Most importantly is to proactively protect your business by registering for a trademark. While the process is simple, it can be time-consuming. If you’d like to save time and effort, you can use a trademark service to make the process faster and easier.