BusinessTN

So you gave the right side of your brain a workout thinking of the perfect name for your new small business. But coming up with the perfect name is only half the fun. Before you order the company stationery, be sure to employ your left-brained powers to help you legally make the name yours.

Law does not mandate federal or state registration of a business name.In fact, there are laws that protect people who don’t.

“Someone can acquire a trademark name by simply using it,” says Julie Baldridge, a Memphis attorney who works in trademark law with Butler Snow. “If a name or symbol is in use on goods or services for commercial use, then it is protected by common law trademark rights.”

It might seem more convenient to take full advantage of the common law rights and skip the registration process. But in the end, a company that fails to acquire a trademark for its name and logo could be jeopardizing its possibilities for growth across state lines and is leaving itself vulnerable to legal attack. Because, even though there are common law rights, “having a registered trademark will strengthen your position in litigation should a conflict arise,” says Stephen Roth, a Knoxville attorney who practices trademark, patent, and copyright litigation with Baker, Donelson, Bearman, Caldwell & Berkowitz.

Though there are state trademarks, most companies with nationwide expansion in mind bypass those and file federally, admits Tara Ertischek, corporate counsel with Nashville’s Ingram Barge Co. who is experienced in intellectual property law. By federally registering a trademark, the business owner gives constructive notice to the entire nation that he or she has exclusive legal rights to use the trademark on or in his or her services.

“But before registration even takes place, you must do a comprehensive search to see if the name you’ve come up with is already in use,” says Robert Pitts of Knoxville’s Pitts and Brittian. “One of the most avoidable, but common, mistakes people make is using a name without doing a comprehensive search first. Six months down the line, they get a cease-and-desist letter and then they’re stuck.”

The United States Patent and Trademark Office (USPTO) has a database that contains listings of both federally registered trademarks and pending trademark applications. There are also companies like Thomson & Thomson that provide database searches for a fee. Other online companies offer similar services, but it is wise to remember that no one database will contain every single trademark in use. But for all practical purposes, the USPTO Web site, www.USPTO.gov, is a good place to start. If the name is not in use, the business owner can submit an application online with the USPTO. The base fee is $335 per class of goods and/or service (T-shirts would be in one class, while computers would be in another).

However, if the name is already in use or there’s a problem with the application, it might be wise to consult an attorney. There are all kinds of rules in trademark registration. For example, there are rules that prohibit trademarking commonly used words like “soap” or “tires,” Roth says.

An attorney also can help keep a previously established trademark up to date. “Trademarks have to be renewed every five to 10 years, and many attorneys have a docket system that helps them keep up with their client’s trademark renewal,” Roth says.

Sometimes, the process can be quite painless, but in other cases an attorney can help erase doubt and protect a business owner from dealing with questions that he or she is unqualified to answer.

Of course, there are times when a trademark lawyer is necessary. Suppose a trademarked name is already in use with one company in a totally unrelated field, or another company claims that it was using the name first. These types of situations usually call for procedures beyond the realm of electronic registration, sometimes involving litigation. Trade- mark law is based on the likelihood of confusion for customers, and an intellectual property lawyer can help a business owner construct a successful argument that proves that his or her trademark is not confusing.

Trademarks (names especially) can indeed be shared as long as they’re used in totally different fields or industries.

“You just have to show that the customer base is different or that it’s so specialized that no one who buys a particular product with the same name would think it was owned by another company,” Ertischek says. For example, a canned food company and an athletic gear company can co-exist with the same name without the consumer being confused. So both would most likely be granted trademark rights.

The process isn’t that complicated—at least it doesn’t start out that way. And even if there is a problem when securing the name, it’s a lot easier to deal with in the beginning than in court five or ten years down the road.