So you have a great idea for a new business and have thought of the perfect name. But what if it turns out there’s a company who has already been using the same (or a similar) name to the one you’re planning on? Or perhaps you’ve registered a domain name that happens to be similar to another’s?
The good news is this isn’t necessarily a cause to change the name you loved. The bad news is there are a couple of claims that could be made against you depending on your circumstances.
For someone to make a claim against you, first your name needs to be a trademark. A trademark is a word, symbol or device used in commerce on goods (or services) that identifies and distinguishes your goods and services from others. Merely using the mark is enough to establish a trademark, but you can choose to federally register it with the USPTO to gain some benefits. These include the registered mark as being presumed valid in litigation, it holds others responsible not to infringe on your mark regardless of whether an individual knows about it, and it can stop importation of infringing goods from abroad.
Whether you register your trademark or not, let’s consider some potential issues.
Trademark Infringement
If you use a mark that is similar to another’s, you could be liable for trademark infringement if that similarity could cause consumer confusion. In other words, if a consumer looking for another’s product is confused by yours, you may have an issue.
So, how do we know what would cause consumer confusion?
Courts have identified core factors they analyze when assessing whether two trademarks are likely to create consumer confusion. One such factor is how similar your good or service is to that of the individual claiming infringement.
For example, if you’re planning to sell nail polish under the name “Perfect Nails,” it’s highly unlikely that there could be trademark infringement if a company with the same name was selling construction equipment. This is because nail polish and construction equipment are very different classes of goods. And, in fact, there are examples of companies in different industries using the exact same name without issue due to lack of confusion such as Francesca’s the clothing brand and Francesca’s the Italian restaurant.
If your product and that of the other company is different, you’re likely to not have any infringement issues. However, if consumers think the other company is sponsoring or an affiliate of your product, that likelihood of confusion is grounds for a trademark infringement case.
But, let’s assume that they are different While it’s a good start, you’re not yet.
Trademark Dilution
If the name you wish for your company is the same as an already famous trademark in the US, you could run into issues with federal trademark dilution. In these cases, there’s no confusion required for you to be liable. Rather, you could be ‘diluting’ a trademark by 1) Blurring and or 2) Tarnishing.
Blurring means that your good (or service) being sold under its name erodes a famous trademark’s power in the market. This can occur whether or not your mark is also famous.
For example, Nike is a world-famous brand name. When hearing that word, you likely don’t think of anything other than the running brand. There’s a power to that, one that brands care deeply about. Say you’ve decided to honor your passion for Greek mythology and want to name your nail company Nike. Now when someone hears ‘Nike’ they could think of two things on the market, the mega conglomerate athletic-wear company, and the nail polish. Thus, the Nike mark is now “blurred” as the famous mark has lost some of its recognition power.
Once again, even if it were out of the realm of possibilities that a customer would think Nike had made a foray into the beauty scene, this could be an issue where the word Nike is blurred.
Now, onto tarnishment.
Tarnishment means that associating the famous mark with your good (or service) harms the famous brand’s reputation. This likely occurs when your product is of a lewd nature or is of shoddy quality. Again, when it comes to your nail polish (that is no doubt of a superior quality) this likely will not be an issue.
Cybersquatting
The last claim we will discuss is cybersquatting. Now, this is only an issue when you’re registering a domain name and use another’s trademark in your domain name with bad faith intent to profit from it. For example, if you try and register ‘www.Opii.com” and hope to sell your nail polish to people who mistakenly type in that extra ‘i’, that would be a potential cybersquatting. It would also be cybersquatting if you obtained ‘www. Opii.com’ and then attempted to sell it to OPI with the threat of using it. But, as long as you haven’t in bad faith registered a domain name with the intent to profit off of it, you should be good to go!
Trademark infringement, dilution and cybersquatting are all claims to look out for if you obtain a trademark, and hopefully now you have a better idea of what they entail!
Natalie Allen
Associate Blogger
Loyola University Chicago School of Law, JD 2025