I’ve had some discussions lately on the problem of business name conflicts, reserving names, and owning names.
Here’s a horror story: we had a vendor in Portland named emedia. They did data management and some web hosting service. We’d known them for about a year when had to change their name to Consonus because they ran into a conflict with a Texas company of the same name. The Texas company could prove they used it first. Bam. Change your name. Lose your branding, lose your marketing, that’s horrible.
Here’s another true story: In 2001 some guy appeared in email trying to threaten me with a lawsuit over the name Palo Alto Software, Inc. He said in his email he’d owned that name in 1983 and dropped it before I registered it in 1987. So what? You dropped it, you said so yourself. Names are like that: use it or lose it. So no lawsuit, not even a threat, just somebody misunderstanding legal use of names.
Google me and you’ll find me and another Tim Berry who’s in Indiana state government. We are of course two different people with the same name. Another Tim Berry was producer of the TV show Cheers. We all use the same name legally. Until, that is — and this is important — one of us tries to be the other. It’s illegal to trade on somebody else’s name. If the Indiana government Tim Berry says he’s the business plan Tim Berry, that’s illegal. If I claim to be the publisher of Cheers, that’s illegal.
This same basic idea applies to company names. Similar names can exist but there’s no problem until one business pretends to be another. Counties normally regulate fictitious business names so there can’t be two identically named businesses in the same county, but there could be two in two different counties. States register corporations so there can’t be two identical corporations in the same state, but there could be identical corporation names in different states. Think of “Guardian Security,” for example, or “AAA Plumbing.” The Eugene, OR phone book has more than 100 businesses with names starting with “Emerald.” The Palo Alto, CA phone book has hundreds of business starting with “Peninsula.” They aren’t suing each other.
The problem is confusing customers. That’s the key to understanding the names issue. Consonus had to drop “Emedia” as a name because the first Emedia feared, with every right, that the second one might confuse customers. They were operating in similar business services. So McDonald’s will squash a restaurant named McDonald’s, with good reason, but our town has a McDonald’s Business Services, McDonald Theater, and McDonald Gallery Fine Framing. They don’t confuse people.
These different businesses with similar names don’t have a problem until they start confusing customers. They can’t confuse identies on purpose. Try to name a restaurant McDonald’s and you’ll get blown out of the water by legal action from McDonald’s restaurants. There are lots of companies named Jefferson this or that, or Forest Lake, or Twin Peak, or whatever. Technically whatever your company name is, there could be another company with the same name in every other county in your state, and another corporation with the same name in every other S; the problem is when one pretends to be the other. Your local telephone directory has several businesses named “AAA” this or that, like “AAA Hardware” or “AAA Plumbing.”
So this doesn’t solve any real problem of business names. It’s just background you need before you get into the heart of business naming, which includes the real questions: what about domain names for websites, and how do they affect business names? How to research a name, and how much to spend? And, perhaps the most interesting, what’s a good name for your business? How can you tell?
That’s all very important, but too much today. I promise some future posts. And in the meantime, you can use this search on bplans.com if you can’t wait.