It is a common belief among prospective business owners that because a business name is available for registration with the relevant Department of State, that name is free and clear for use generally. This is a misconception.
The Department of State in any state allows formation of a business entity as long as there is no other entity with a similar name already registered as a business in that state. The degree of similarity required in order to prevent registration is extremely high. For example, registration of the following variation would likely be allowed: Empire Solutions LLC and Empire LLC. However, if these two entities are offering similar goods and services, this may be an issue under U.S. trademark law.
U.S. trademark law prevents use and registration of confusingly similar marks. These are marks which are similar in sight, sound, and connotation, when used in connection with related goods and/or services. Thus, under U.S. trademark law, Empire Solutions LLC offering staffing services may be found to be confusingly similar to Empire LLC also offering staffing solutions. While the Department of State in one state may allow registration of both names as business names, under trademark law the company that used the name first may have a potential trademark infringement claim against the other company, even if the businesses are formed in different states.
Before forming your business it is prudent to have a trademark clearance search conducted. A basic search engine and United States Patent and Trademark Office (“USPTO”) database search can be conducted on your own, however a trademark attorney will conduct a more comprehensive search which includes a number of additional sources and can provide an opinion on proceeding with use of your proposed business name. The value of the search does not lie in the results at face value but instead lies in an understanding and analysis of the results.
For more information on trademark clearance searches feel free to contact us.