Safely Choose a Tradename for Your Business

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Using a tradename (or fictitious business name) before you are certain it is available will cost you if the name is found to conflict with someone else's prior rights to that name. Use this Guide to decide if the name is available.

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The Law No. 1: Tradename Protection under Common Law

There are two kinds of protection available for tradenames, the first of which is common law protection. The basic rule is that the person who (1) first uses a tradename (2) in a specific geographical area (3) for a specific business purpose, has the exclusive rights to that tradename in that area for that purpose.

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The Law No. 2: Tradename Protection by Registration

The second kind of protection available is registration of your tradename with a governmental agency. Examples of this would be a fictitious business name filing with your county recorder, or registering a trademark with the US Patent & Trademark Office. This type of registration bars anyone from commencing use of the registered tradename in the registering agency's jurisdiction AFTER the date of registration. There may be limits on the duration of your protection, or the business purpose in which you are afforded the protection. For example, federal trademark protection requires that you have used the tradename "in commerce" before a trademark application is submitted.

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Protection Requirement No. 1: Name is Distinctive and Not Confusingly Similar

Not every tradename is eligible for common law or registration protection: only those that are deemed (1) "distinctive," and (2) not confusingly similar to another tradename, are eligible. Tradenames that are merely descriptive of the goods or services to be provided are not granted protection. Note: domain extensions like .com are considered descriptive.For example, I trademarked the term "transdental" in 1998 for my dental transactional practice, because at the time of registration "transdental," while evocative of "dental transactions" and "dental transitions," was both distinctive and not strictly descriptive, plus there was no other similar tradename that could be confused with mine.

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Protection Requirement No. 2: Name is First in Area

As mentioned earlier, a tradename must be first in its geographic area in order to have protection. This concept of "first in area" depends greatly on circumstances. Tradename protection applies not only to the area where a business already uses the tradename, but also can extend into areas of the tradename's zone of reputation, zone of likely expansion, and zone of marketing."First in area" also applies to your business purpose. The Rose Cafe (a Mexican restaurant) does not conflict with The Rose Law Firm (legal services), nor does either conflict with Rose Story Farm (a nursery). However, if someone wanted to open the Rose Mexican Bistro, that name could be sufficiently confusing to bar its use in the same area as The Rose Cafe.IMPORTANT: if you are engaged in an internet business selling regionally, nationally or internationally, your "area" is the area of your proposed sales. Be very careful in researching available names.

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Protection Requirement No. 3: Good Faith vs. Protection Efforts

Sometimes, a tradename's zone of marketing enters into another tradename's zone of reputation or likely expansion. It becomes an issue of determining the Good Faith behavior of tradename 1 vs. Protection Efforts by tradename 2.Did tradename 1 enter tradename 2's zone with the KNOWLEDGE of tradename 2's prior use and with the INTENTION to exploit tradename 2's reputation? Did tradename 2 have the OPPORTUNITY to protect its name, and once it did so did it ACT (by name registration or complaint) within a REASONABLE amount of time to prevent tradename 1 from using the name in tradename 2's zone?Obviously, this is a very nuanced, fact specific, area that is contentious and expensive to resolve. This is why it is very important to do your research ahead of time, to confirm that your chosen tradename will not end up in a conflict with an existing tradename, and to complete whatever tradename registrations may be available.

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Tradename Availability No. 1: Telephone Directories, Search Engines, Domain Search

Once you have determined that your proposed tradename is protectable, you MUST see if your tradename will be the first use in your area. This is completed by old fashioned research.Look in your local white pages alphabetically, and in the local yellow pages by business category, for your chosen name. If you pass this test, use search engines like Google and Yahoo to hunt for use of your name. Do a "whois" search of your tradename with the major domain extensions (.com, .org, .net, .biz, .pro if you are a professional) to see who is using that name. A "whois" search link is provided below. That someone owns a domain name with your tradename does NOT confer tradename protection, but it does let you know of the potential conflict.

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Tradename Availability No. 2: Federal Trademark Filings

The most important place to check for availability is at the United States Patent & Trademark Office. You can input your name to see what registrations have been made, and in what business purpose (or "Class") those trademarks have been issued. The trademark search link is provided below.Trademark registration prevents anyone in the United States from commencing use of your tradename (1) AFTER your filing is complete (2) in the Class the trademark was obtained. If someone was using your newly registered tradename before your trademark registration, they would be permitted to continue use of that tradename in their geographic area. Someone could also begin using your registered trademark AFTER your trademark filing if that name is used in a different Class than the one in which you registered. There are 45 different Classes, and multiple Class registrations are common. A trademark must be renewed every 10 years or it will be lost.

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Tradename Availability No. 3: State Registration of Business Organizations

Most, if not all, states have computer access to determine whether your proposed tradename has been used to register a business organization, such as a corporation or LLC, in that state. Some are free searches (California), others are not (Texas). If you can, do the business organization search. Like with domain names, registration of a business organization does NOT confer tradename protection, but it does let you know of the potential conflict.

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Tradename Availability No. 4: Local Fictitious Business Name Registrations

Fictitious Business Name (FBN) registrations can be filed in your state, county or city, and should be available in the locality's Official Records division - in California, it is the County Recorder's Office that has these records. FBN registrations act like trademark registrations, except the registration only covers the locality to which it applies, and must be renewed at some interval determined by your locality (in California, a FBN must be renewed every 5 years or it will be lost).

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Tradename Availability No. 5: Professional Licensing Boards

If you are a licensed professional (doctor, lawyer, dentist, contractor, etc.) you may be required by law to register your proposed tradename with your state licensing board. Also, a professional's choice of tradename or business organization name may be severely restricted by state law. Check with a local attorney familiar with your type of professional practice in your state for details, or contact your state licensing board for guidance.

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That's It!

Once you have found that your tradename is distinctive, non-confusingly similar, and available, you need to protect that name. Obtain the tradename's domain name with all the prominent extensions (.com, .org, .net, .biz, and if appropriate .pro). Form your corporation or LLC (if applicable) using that tradename (as permitted by your state licensing board, if applicable). File your trademark and/or fictitious business name registrations as appropriate. Set up your website, print your business cards and letterhead, and you are on your way!

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Disclaimer (Legal Stuff)

IMPORTANT: This Legal Guide is made available for educational purposes only. There is no attorney client privilege between you and the attorney author. This Legal Guide is not a substitute for competent legal advice from a licensed attorney that specializes in this area in your home state and with whom you have an attorney client relationship. Also, law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question. Copyright 2009 by Robert W. Olson, Jr. - all rights reserved.

Additional Resources

Whois Search

US Trademark Search (click "Trademark Search" in the blue box to the left, then "Basic Word Mark Search").

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