Insights

written by Emily Haas, Senior Counsel, Michael Best & Friedrich LLP

A famous playwright asked, “What’s in a name?” When it comes to names for small businesses, the answer is, “Quite a lot!” Choosing the right name can make all the difference for a new business. A business’ unique name – and the reputation that the business builds and attaches to that name – is a valuable asset.

In turning to the question of choosing a name, the natural inclination is to select one that tells a customer what the business is. At first glance, this seems useful. A name describing what informs the customer what they can expect at that business. This approach to naming, however, comes with drawbacks. 

One of the more significant issues with choosing a name that describes what a business does is that any proprietor may fairly describe their line of business. This means that another business can use the same descriptive ‘what’ terms to fairly identify and describe their own competing products or services.  For example, a garden center in Springfield may choose to call itself Springfield Garden Center. A competing garden center in Springfield, however, could fairly identify itself as “a locally-owned Springfield garden center” on its website.  Even if the competitor does not identify itself as a Springfield garden center, customers may still describe both businesses in this manner. If a customer recommends checking out the plants at the Springfield garden center, the person receiving the recommendation might not be able to identify which Springfield garden center. It is, therefore, best to choose a name that cannot be used to describe the business.

In contrast, when a business name is distinct from the products or services the business offers, the business can use its name to develop its own unique personality. This allows customers interacting with the business to associate the name with that particular business, its values, and its quality of products or services. Such an association can add substantial value to a well-managed brand. Customers familiar with a particular brand expect that purchasing products from that brand means they will receive a certain type of product at a certain quality point. As a result, those customers are more likely to purchase additional products and services from the brand and are more likely to recommend the brand to others. 

Despite the benefits of choosing a distinct, unique name, a new small business might feel some reluctance to do so. One common concern is that it can take customers time to learn to associate the business’ unique name with what the business offers.  An effective solution to this problem is to use the name with a tagline. The business’ name can be the unique identifier, while the tagline can describe what the business does. For example, the garden center in Springfield might name itself Mums The Word and include the tagline “Springfield’s favorite garden center.” This allows the garden center to have a unique identity, provide differentiation from its competitors, and still put customers on notice as to what they can expect at Mums The Word.

Once a business believes it has found a unique name and identity, it should take several steps to safeguard its use and protect its name. First, a business should conduct searches of trademark registries to ensure there is not a similar business with a similar name operating in their jurisdiction. Two businesses using similar names to offer the same types of products can confuse consumers and hinder the development of a valuable, unique, strong name. Once a business establishes that no other entity is using the name of choice, the business should apply to register the name with its jurisdiction’s trademark office. By registering its name, the business is able to put others on notice that this is its name and prevent competitors from using a name that is confusingly similar. Starting a new business is an exciting time.  By taking a few steps before opening day, a business can establish a strong, unique, original name, and set itself up for success. If you have questions about selecting and clearing a name for your business, your local trademark lawyer can help you navigate these waters. You can also find useful resources at WIPO’s Trademark Resource Center.