Legal Goals for Naming a New Business 1

Melissa is a mother of 2, lives in Utah, and writes for a multitude of sites. She is currently the EIC of HarcourtHealth.com and writes about health, wellness, and business topics.

You have decided to start your own business. That is great news! The excitement of a new venture combined with the dream of growing into something big can be thrilling. The Small Business Administration estimates that 627,000 new businesses open each year. Unfortunately, the reality of setting up and creating legal entities and protecting those big dreams from future litigation headaches can be equally daunting.

A simple internet search will reveal a myriad of “helpful” articles, apps, and advice on everything for your small business. However, as you begin to read and attempt to follow all this advice you will find that many of them are contradictory, or simply don’t apply to your situation. Like most topics on the internet, creative searching will always yield something to agree (and disagree) with any idea.

From a legal perspective, there is a goal every small business owner should have, but many new entrepreneurs overlook. That goal is: always avoid legal troubles. Trademark attorney Nicholas Wells, who has helped thousands of companies manage their trademarks, notes that “It costs a lot less to engage a lawyer to prepare for and avoid legal troubles than it does to deal with a legal dispute when things have gone wrong because of bad decisions and someone is determined to attack you.”

A few simple decisions made with this goal in mind can save a lot of time and money in the future. The adage, “an ounce of prevention is worth a pound of cure” is very apropos in this situation. The last thing an entrepreneur wants is to invest their life savings in branded merchandise only to receive a cease and desist letter from a large company citing trademark infringement. Many businesses have started and failed in scenarios just like this. The US Bureau of Labor Statistics estimates that 20 percent of small businesses fail in the very first year with the estimate growing to 50 percent by the time 5 years have passed.

Those numbers are sobering and provide even more incentive to keep the goal of avoiding legal troubles in mind, here are some things to consider when choosing a new business name:

  • Don’t choose a trademark that describes what you make or do.

This sounds counterintuitive, but it is a great first step. Thousands of trademark applications are refused for being “merely descriptive.” Be creative and come up with a brand that is protectable and defendable. Think of brands like Apple and Nike; they are instantly recognizable for what they make and sell, but not because of the words themselves. That is successful branding. If you are making custom t-shirts, naming your business “Custom Made T-Shirts,” is not protectable as a trademark.

  • Complete a professional trademark search.

A professional trademark search is an initial investment, but well worth it when compared to the cost of defending the business against a lawsuit because of an infringement with a registered trademark. A professional trademark search is NOT the same thing and a search to see if a business name is available in your state, nor is it the same as a search to determine if a domain name is available. Owners of a registered trademark have gone through the process of registration for a reason–they plan to defend their rights. Create a name and a brand that can be registered so that those same rights are possible for your business.

  • Plan to trademark both the name of your business and your logo.

Two separate trademark applications are recommended. Of course, the startup costs for a small business must be considered. If only one trademark is possible, apply first for the “word mark.” This is the name of the business, the words themselves, without fancy font styles, formatting, or colors. However, have a solid plan and follow through with an application for a well-designed logo as well.

With these considerations in mind, enjoy the process of starting a new business. Study all the how-to videos, advice, and information you can find. Use those name-generating websites and create a word that has never been heard before. Enjoy the fact that the only person you must please in the end is yourself. Whether your taste ranges to from quirky to fantastical or perhaps you favor a kitschy play on words, the perfect name, that fulfills all your business goals, is possible. When you find the perfect name, seek out professional legal advice and create your new business entity on a solid foundation. Protect that name with a trademark and give the business solid legal rights to defend your professional niche. Welcome to the world of business.