Secrets of Creating a Successful and Distinctive Brand Name

Feb 4, 2013

Photo: Bloomberg

No matter what market you’re in, it’s getting crowded. Every day, more and more new businesses are created. So while the current name of your business may have served you well for years, if you are growing or changing direction—or even if it simply has been a while since you have given this any thought—your company’s name should be reviewed to see if it is keeping up with current market realities.

Because your business is continually exposed to potential clients and competitors, the name by which it’s known has to work hard to stand out. Here's an insider's look into what makes a good company name under the law, and in business.

Four Categories of Distinctiveness

The law divides trademarks into four categories, from the strongest to the weakest:

    Fanciful/arbitrary
    Suggestive
    Descriptive
    Generic

Understanding these categories will help you ensure that your company name has a greater chance of obtaining a trademark registration at the United States Patent and Trademark Office (USPTO). And they’ll also help you create a moniker that is both memorable and appealing to customers.

The strongest trademark is one that is either fanciful or arbitrary. A fanciful trademark is a term or terms that have been invented for the name of the product or service, such as Pepsi, Kodak, and Xerox. An arbitrary mark is made up of a real word or words, but does not suggest or describe the goods or services. The name Apple is a good example, as there is nothing about the word that suggests or describes a MacBook Air or an iPhone.

The next category, suggestive marks, does not describe the product or service for which it is used, but with a little imagination you can understand the connection. MeetMoi is the name for "downloadable software in the nature of a mobile application for social networking and online dating." The word moi is the French word for "me," so the entire mark translates into "meet me" which suggests, but does not describe, a dating service.

A descriptive trademark merely describes a portion or all of the product or service to which it relates. If you open a store selling shirts and call it Shirt Store, you have a descriptive mark, one that is very weak in trademark law and will not receive approval for registration as a federally registered trademark. Shirt Store also is not a great name for a business, because it is not very distinctive or memorable.

Finally, there are generic terms. A generic term is simply the name of the item being used as a trademark. If you are selling hammers, you will not be able to register "hammer" as a trademark for this product. However, you may be able to register "hammer" as a trademark if you are using it to identify a superhero doll that you are selling.

If your business's name is not a suggestive mark or stronger, you may want to consider modifying it. It would likely be too much of a leap to change your name to an arbitrary mark, since that would have absolutely no connection with your current name. But with a suggestive mark, you can come up with something that maintains a connection to the original. For example, changing Shirt Store to Shirt Express creates a stronger name.

Should You Register Your Trademark?

You should apply for trademark registration, unless your business name is not very important in your marketing efforts. Would the loss of your business name lead to the loss of sales? Would you have to incur a great expense to change the name of your business, such as redesigning and reprinting promotional materials? If the answer is “yes,” then you should apply for a trademark. If “no,” then there is no reason to take the time or incur the expense.

Registration of your own last name is subject to special scrutiny because it prevents someone else with the same last name from doing the same. If you wish to register “Weber Accounting,” you must have either used that name in the same business for at least five years, or demonstrate how it has become distinctive in the industry.

You do have certain trademark rights without registration, but they are limited. You usually can claim trademark rights to a name if you have used it in connection with a business or service, but only in the geographical area in which it is used.

A registered trademark has rights for the entire country. If you have a registered trademark and someone else challenges your right to use your business name, the other party has the burden of proving that he has any rights. Moreover, with registration, you get to recover legal fees incurred as a result of the litigation, and can receive additional damages in certain circumstances. You can also file your registered trademark with U.S. Customs and Border Protection to prevent importation of infringing foreign goods, typically illegal knockoffs selling at substantially discounted prices.

The Trademark Registration Process

Before filing a trademark application, first hire a trademark search company, such as Thomson CompuMark, to see if others are using the same name. While using an internet search engine can be helpful, it will not be as comprehensive.

Then, file an online trademark application at www.uspto.gov, where you provide your trademark and a description of what goods and/or services are being offered. While you could do this on your own, it would be helpful to have a lawyer with a background in trademark registrations write the broadest and the most accurate description of the goods and services, since this is where the value of the registration is determined.

The USPTO will determine whether or not the use of your trademark will cause confusion in the minds of consumers with the use of other trademarks. For example, you can have Dell Computers and Dell Publishing, each with separate owners, because computers and books are completely different products and there is little chance that a consumer will think they are coming from the same source.

If you do address all of the USPTO's concerns, then your mark and the accompanying description of its goods or services will be published in the USPTO Trademark Official Gazette. If, after 30 days, no party contests this registration, then the USPTO will issue you a certificate of registration for your trademark within 12 weeks of the date of registration.

Knowing these ins and outs of trademark law will help you review your company's name and make sure that you have the best name for your business.

David Leffler is a member of the New York City law firm Leffler Marcus & McCaffrey LLC. His firm represents small to medium-sized businesses in intellectual property matters, business contracts and transactions, financing, business and employment disputes, and bankruptcy proceedings. He can be reached at dleffler@lmmlawfirm.com.

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