Four Tips to Start-Up Companies for Avoiding Trademark Pitfalls

In the early stages of start-up companies, generally protection of intellectual property rights is not a priority—whether it be from oversight or as a result of tight finances. Understandably, the leadership of start-ups primarily focuses on funding, organization, strategy, growth, talent, and marketing. Whatever the reason, neglecting to protect a start-up’s intellectual property at the inception of the company can be devastating in the long run.

Fortunately, with a little research and a reasonable cash outlay, companies can avoid many intellectual property pitfalls. Here are four tips that start-up companies should follow:

Tip 1: Not Already in Use

The business name is a critical factor in establishing and maintaining a brand to be protected by state and federal trademark law throughout the life of the business. One major stumbling block to a successful start-up is selecting a company name that is identical or similar to a name that is already in use. Remember, someone in a neighboring city, county, or state may have come up with a similar name. This problem can be avoided entirely with some preliminary research.

From the onset, the business should also decide if it will operate under a trade name. A trade name is the official name under which a company does business. It is also known as a “doing business as” name, assumed name, or fictitious name. For example, the name of a start-up company might be Robertson, Inc., but the company may decide to open all of its offices under the name “Robertson’s Rentals.”   As with the business name, it is important to select a trade name that is not already in use in order to receive maximum protection under federal and state trademark laws.

Start by researching the business name AND the trade name with the Secretary of State. The Secretary of State holds a database of registered domestic and foreign businesses and most can be searched online (Georgia and South Carolina). It is recommended to search the databases of all states in which the new company plans to do business. After searching the Secretary of State database for registered names, the start-up will need to search for registered trade names (not business names) in the records of the Clerk of the Court of General Jurisdiction in the county containing the principal place of business. While this type of search is not online, it can still be performed with relative ease.

Note: In your business formation process, contact a trademark attorney to register the trade name or fictitious name should you decide to utilize one. Luckily, registering a trade name is generally an inexpensive pursuit, especially in Georgia or South Carolina.

Tip 2: Does Not Run Afoul of Existing State or Federal Trademarks

Another consideration in choosing how to name the business is selecting a company name that is not identical or similar to a registered state or federal trademark. This is separate from a Secretary of State search or a county trade name search. A start-up should also exercise the same caution when naming products or services. Trademark rights are generally based on the principle that the first person or entity to use a mark has priority, whether trademarked or not. A trademark does not necessarily need to be registered in order to have priority. Therefore, if a start-up chooses a company name, product name, service name, or slogan that is already in use by another company, the start-up runs the risk of exposing itself to costly litigation, otherwise known as infringement.

Search the Trademark Electronic Search System (“TESS”) on the website for the United States Patent and Trademark Office (“USPTO”). Also, some Secretary of State websites have the capacity to search registered state trademarks. Finally, searching Google, Bing and Yahoo will also help a start-up in deciding a name.

Tip 3: Not Already an Existing URL

When choosing a company name, product name, service name, or slogan, a start-up should perform an online search to find out what URLs have been secured. Companies often overlook that website addresses are a form of intellectual property. Registering a domain name costs merely a few dollars, so a start-up should be sure to register a domain name that would not be easily confused with other businesses. Searching Google, Bing, and Yahoo is generally all that is needed to be sure that no identical or similar domain names are already in existence.

Tip 4: Plan in the Early Stages of the Start-up

While intellectual property registration should be sought as soon as the start-up can afford it, companies justifiably spend their limited budgets on strategy, growth, talent, and marketing. Thus, it is important that a start-up strategically plan to protect its intellectual property. As the company generates revenue, funds should be earmarked for intellectual property protections. A start-up should retain a trademark attorney for help in performing a full trademark search, filing a trademark, and executing other necessary legal actions to protect its intellectual property. A start-up should also police its intellectual property—meaning that the company should ensure that others are not making use of its marks without permission. If someone steals intellectual property, the start-up should retain counsel to send cease-and-desist letters and file infringement suits if need be. After the start-up has worked so hard to foster and hone its intellectual property, it should protect it.

Why Start-Ups Should Follow These Steps?

Following these four tips will provide a start-up with protection against the copying, theft, and illegal use of its marks. Additionally, the start-up will be protected from infringement litigation from other established businesses for intentional or unintentional use of their marks. Finally, seeking financing for the start-up will be easier because a start-up with protected intellectual property rights will gain improved attractiveness to investors. Starting a business with an intellectual property strategy is key to the success of the business.

Check out our other links for more information about copyrights and trademarks.

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