How to Name a Business: Protecting Yourself from the Outset

Among the decisions to be made when starting a business, your new company’s name could be one of the most important. Yet, most entrepreneurs don’t know where to begin when it comes to how to name a business. A name has implications for your visual identity, company culture, marketing, and… of course… your competition.

What’s in a name?

Terrance, a father and solution-oriented entrepreneur, was tired of seeing the negative imagery that was on a lot of sports apparel. And while his 3-year-old son wasn’t going to start playing football anytime soon, he was upset that his clothing options were void of what he saw as positive messaging.
With the idea of creating a sports apparel brand with a more uplifting message, he founded a company. Terrance started a business selling positively-messaged shirts out of his basement for $25. Pretty soon, his business was rolling along.
Unfortunately, this story isn’t about a bootstrapping success. Just as things started to pick up for Terrance, he received a letter. This wasn’t a letter from local parents thanking Terrance for the positive impact his company was having, or a big name athlete asking how they could help. No, it was a cease-and-desist letter from a global sports brand.
As it turned out the letter was just the tip of the iceberg in a larger legal campaign. The global brand’s legal team was on a mission to corner the market when it came to any similar-sounding name in the sports apparel industry. At first, Terrance tried to fight it. He thought, “Our doesn’t name is entirely different from theirs!”
But Terrance was no match for a multinational corporation’s legal team. He realized that ultimately the name of his brand-new business wasn’t worth the thousands of dollars in legal fees he would incur to even have a chance at keeping it. His opponents had lawyers on staff whose jobs were to keep the process going until each and every small business caved in—either changing their name or going out of business entirely. After spending significant time, energy, and a hefty chunk of change, Terrance was forced to switch his business’s name.

What can you learn?

Was Terrance cutting into his opponent’s profits? Not in the slightest. Was that level of legal action necessary? Not really.
But the real question is: Does it matter?
The answer to that is simple: No. It doesn’t matter. Strong, multinational companies exist in every industry, and it’s their legal team’s job to find similar names, slogans, or logos. As a small business owner, it is your responsibility to see if your business will infringe on another business’ trademark. Had Terrance sold literal armor, virus protection software, or any other type of armor, his situation would probably not have occurred. But because they were selling sports apparel, the opponent potentially had a case.
As you start a new business, it can be confusing what to do with your intellectual property. When it comes to naming, it’s critical to study other companies in your industry, and especially in your region, that have similar names. The time, stress, and financial burden of a legal battle can be completely avoided by choosing a different, and often very similar name.
Figuring out how to name a business can be intimidating, but your name, brand, and the rest of your business’ intellectual property are incredibly valuable. They might be your business’s first assets, so you need to protect them. Start by clearing your name in the beginning.
This article was referenced when creating this post

About Startblox

fully-integrated platform combining structured startup information, entrepreneur communities, and connections to business resources

Recent Posts

Follow Us