Of course, your company owns its own name, right? Maybe not. The reality is that many companies think they own the rights to their corporate name, when in fact they could be infringing on the rights of other companies.
There are at least two sources for this confusion. The first comes from the corporate name filing requirements of each individual state. The second source of confusion comes from the rights of other people. Each is discussed in more detail below, and some strategies to keep your company name protected are discussed at the end.
First Confusion Source: Filing Requirements
In the U.S., each state has its own name filing requirements for corporate registration/name protection. Assuming that the name “ABC Company, LLC” is not already taken in Texas and New York, for example, you could start ABC Company, LLC in Texas, and you could also start a completely different ABC Company, LLC in New York. In this example, neither the State of Texas nor the State of New York would know about the other filing.
Once a name is accepted by the applicable Secretary of State, many people think that the name is protected. In a way, it is protected because people cannot file in the same state using the same name. However, people in other states may very well have the exact same name, which may or may not be protected. This brings me to the second reason for confusion, shown below.
Second Confusion Source: Rights of Other People
Whether or not a name is filed with the applicable governmental office, there may be inherent rights in the use of the name from other sources that may prevent you from using it.
For example, say that ABC Company is a plumbing company in Texas. Then, assume that another, entirely different company files to become ABC Company, LLC, and for good or bad, the Texas Secretary of State accepts the filing. Which ABC Company has the right to the name? The answer is that it depends.
Factors to be considered include (A) whether or not the two companies are both in the same industry; (B) whether or not both companies are registered with their state of incorporation; (C) whether or not both companies are registered in the same state or different states; and (D) whether the name is registered at the U.S. Patent & Trademark Office, which is a federal office that protects such intellectual property nation-wide.
How To Protect Your Company’s Name
Carol Wilhelm, a trademark attorney with Looper Reed & McGraw wrote a great article on this subject found at this link. I recommend reading that entire article to determine if you have an issue with protecting your company name.
Next, prevention is the best cure. When starting a business, be sure to check in all states (or at least the geographic area in which you plan to operate) for any companies named the same or even similarly as your planned entity. It is best to have a professional do the search for you, and yes, attorneys are often the best choice. In that same vein, a federally registered trademark is one of the best protections available, and you should consider registering the name of your company with the U.S. Patent & Trademark Office.
Finally, if you have already formed your company and if you know of an issue with a similarly named competitor, address the situation with an attorney. Because the rights are complex, you should have competent legal counsel advise you of your rights, and the sooner you address the issue, the better because time can be a deciding factor when it comes to what you own.