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By Dexter Larsen and Martha Markusen
Selecting the name of a business is an important decision. The name may be intended to describe the business, such as Johnson Car Repair, or it may be a fanciful name such as Microsoft, which required significant marketing to associate the word Microsoft with a company, and ultimately with its products. In either case, substantial money will be expended in the advertising and marketing of the name.
A business, like a person, may have a legal name and a "nickname" by which it and its products and services are identified. When the nickname identifies the business, it is an assumed name or trade name. This trade name sometimes becomes a trademark if it ultimately identifies the products and services of the business. For example, the legal name of Microsoft is Microsoft Corporation. The trade name of Microsoft Corporation is Microsoft, and Microsoft when used in connection with one of its products, such as Microsoft Windows, is a trademark.
Most states, including Minnesota and Wisconsin, have specific legal requirements with respect to the legal names of business entities organized within their jurisdictions. For instance, in Minnesota, legal names of corporations are required to include the word corporation, incorporated, or limited or an abbreviation of one or more of those words, or the word company or the abbreviation co. (provided it is not immediately preceded by and). Your attorney can help you identify these legal requirements.
The legal name of a business also must be distinguishable from other business entity names. The offices of the Secretary of State of Minnesota and Wisconsin make determinations of distinguishability. Thousands of entities are organized each year, and for each new entity to have a distinguishable legal name creates ever growing difficulty in identifying new and distinguishable names. Fryberger lawyers and paralegals will help you determine the availability of specific names.
A business may use its legal name as its trade name, or it may adopt a separate and distinct name as an assumed name or trade name. In Minnesota, businesses are required to publish a notice of intent to do business under a trade name. However, neither Wisconsin nor Minnesota has statutes governing what can be registered as a trade name. The marketplace generally tends to monitor this area. If you select a trade name that interferes with an existing trade name, there is a strong likelihood that the owner of the trade name which first used the name in the marketplace will request that you immediately cease using the similar trade name.
In choosing a trade name, it is important to use a name that will distinguish your business from other businesses. It is also important not to use a trade name that is confusingly similar to trade names or trade marks of competitors.
A trade name or trademark which is highly distinctive can serve to strongly identify the business or its products or services. The strongest trade names and trademarks are those which are coined or arbitrary. For example, Kodak is a coined word with no meaning apart from serving to identify Eastman Kodak Company and its products. The disadvantage of strong trade names and trade marks is that the business must educate the public so that the public associates the business with the trade name or trademark. For example, the public did not know what Kodak stood for when it was first used as a trade name, and Eastman Kodak Company spent substantial sums of money in\ educating the public as to the products and services provided by Kodak. Another advantage of a strong trade name and trademark is that it is much easier to protect the trade name and trademark and drive off potential infringers.
In contrast, if a business picks trade names or trademarks which are descriptive of the type of business or its products and services, differentiating the business and its products from those of others is more difficult. Johnson Car Repair, for a business that repairs cars, is an example of a descriptive trade name. The advantage of a descriptive trade name or trademark is that it immediately conveys the nature of the business and the products and services it offers. However, it may be difficult or impossible to stop others from using similar trade names or trademarks, because direct competitors commonly must use similar words to describe their similar businesses.
Fryberger attorneys can also help you choose trade names. We can help you discover whether your proposed trade name might infringe the rights of others and we can undertake various searches to determine whether there are similar trade names or trademarks which may lead to confusion in the marketplace. We can publish and register your chosen trade name with the state, and we can register trademarks with the United States Patent and Trademark Office.
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