Products
may come and go, but company names can last forever. When starting a
new company, take the time to choose a name that distinguishes your business from the competition. Otherwise, even with the best idea or invention, your customers may have a difficult time finding you and your product in an increasingly crowded marketplace.
All entrepreneurs face a classic marketing dilemma:
They want a company name that tells consumers exactly what they sell,
but descriptively naming a new venue the Country Music Hall, Blues
Center or Music Palace creates confusion with other similarly named
businesses. Ironically, even companies that specialize in branding--The
Brand Consultancy, Brand Design, and Name Development--fall victim to
this misguided approach. Such descriptive names make it hard to stand
out from the competition.
Indeed, the U.S. Patent and Trademark
Office won't even register a name that is merely descriptive unless it
has acquired a reputation. The standard used by the USPTO in
determining whether a name is descriptive is whether it describes an
ingredient, quality, characteristic, function, feature, purpose or use
of the product. Keep this simple test in mind when choosing a new
company name.
It's All in the Name
Successful company names are suggestive rather than descriptive. When
applied to the product, they require imagination, thought or perception
to determine the nature of the goods. A hypothetical example of a
suggestive company name is the Sunshine Orange Juice Co. Sunshine
suggests the nature of the orange juice that the company sells, without
immediately describing it.
Even
better than suggestive terms are arbitrary names that comprise common
words, but when used to identify particular products, do not suggest or
describe a significant ingredient, quality or characteristic of the
goods. For example, Amazon has no meaning other than trademark
significance when applied to book selling, much like Apple for
computers and Camel for cigarettes.
Another approach is to pick a
fanciful name--one that has been invented for the sole purpose of
functioning as a trademark, such as Pepsi, Kodak and Exxon. What a
company does today may not necessarily be what it does tomorrow, so
choosing an arbitrary or fanciful name allows for future flexibility.
Since Amazon has no significance in connection with books, Amazon.com
was able to expand into selling music, electronics and most every other
kind of product under the sun, using the same company name. Similarly,
the name Google has unlimited flexibility as a brand because it isn't descriptive or suggestive of an internet search engine.
Even
if one avoids choosing a descriptive company name, there's another
issue to consider: Some names are so common that they lack any real
marketing strength. Think of names like Strategic Solutions or Pro
Express or Business Advantage for a consulting service. They share the
same shortcoming--failing to resonate in the minds of consumers.
In
today's crowded marketplace, compound marks work better than one-word
marks. If one term is descriptive or common, the other term should help
the overall name stand out. Indeed, the whole may be more than the sum
of its parts--DoubleClick or RazorFish.
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How to Trademark
The USPTO may register common non-descriptive names, but they run the
risk of conflict with other similar names. The more common a name, the
less likely the USPTO will register it.
An
exception is when an entrepreneur owns a generic domain name--a word
that cannot usually be trademarked on its own. For example, the company
that owns Cars.com may want to use Cars.com as its name to make a
direct association between the company and the website.
The best
approach to company naming is to create a list of five or 10 names and
send them to a trademark lawyer, who can quickly tell whether or not
these names can be trademarked. After whittling down the list, the
trademark lawyer can conduct database searches on the proposed names
and determine the least risky candidate.
Have a Story
Using an arbitrary name can set apart even smaller and growing
companies--not just large ones. Pangea3 (co-founded by one of this
article’s authors) is a legal outsourcing services company that uses
the story behind its name to get people to remember the company's
services.
When
consumers ask about the derivation of the name, they get a story:
Pangea was the single supercontinent that existed before continental
drift separated the world's continents. The second Pangea occurred when
mass transportation reconnected people from the separated continents,
enabling global commerce. In the third Pangea, the internet and global
telecommunications systems have electronically reconnected the
continents and their inhabitants, making continental and national
borders irrelevant, creating, once again, a single supercontinent.
From
this story, people remember what the company is all about. Plus, the
company's application to register Pangea3 with the USPTO avoided
conflict with other company names in a nascent but growing industry and
saved the company legal fees.
Is there a story behind your new
business name? If not, go back to the drawing board and think of some
suggestive or fanciful names that will help your company stand out from
the crowd. Finding a distinctive name that will interest consumers,
will help brand your company identity and define itself in a congested
marketplace. Support your unique name with some creative advertising
and gain that competitive edge from the start.
Peter S.
Sloane, a partner at Ostrolenk Faber LLP and a member of the
Association of Patent Law Firms (APLF), is an attorney specializing in
trademark matters. His work includes counseling clients in the adoption
of new trademarks as well as trademark searching and filing in the U.S.
and abroad.
David Perla, a lawyer by training, is
co-founder and co-CEO of Pangea3, a leading legal outsourcing company,
with nearly 300 employees in India and the U.S. He previously served as
vice president of business and legal affairs at Monster.com.
