When a Startupís Name Leads to Litigation


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Many that start new businesses may not be aware that there are several steps necessary to complete before a companyís name may become public. It is important to register and, in many instances, trademark the name or logo so that it may only be legally used by that one organization.

However, without these first steps, it is possible to find the owner in a legal conflict with another company with a similar name or with the same name. If this is within the same state, it is possible to be sued. However, if the name exists in another state, and registration for the name has not been completed nationally, then it is possible to avoid a court case.

A startup depends on many different things including the ability to sell products or services. However, long before the consumer buys these items, it becomes aware and remembers the name of the business. The name is sometimes one of the most important aspects of an organization, as this may embody a feeling, a memory and it could be synonymous with certain activity such as community assistance or green energy. It is vital that the name of the business is chosen wisely, but research should be performed to ensure that another company has not already chosen the same name within the same state.

Planning and Intellectual Property Protections

When planning a new startup, the name and everything after should be well thought out with a strategy. This may even extend to applying for intellectual property protection through a trademark. If this is considered to be beneficial by the owner, he or she must then determine if the registration of the company name will be for only the state where it resides or throughout the entire country. Without the protection of a trademark, it may be easier to become involved in a lawsuit over the name or similarities to another companyís name. It is also best to ensure a lawyer is retained for the possibility of litigation or violations to trademark protections.

Even with protections in place, there are many situations where the name of a company could lead to litigation. When it is similar to another that has already obtained a trademark based on similar words, symbols or phrases, the new company may be taken to court because of the similarities. If the company has conflict with another that has started the same type of use where similar words or symbols are used and that business proves to have applied for a trademark first, the organization may lose the ability to utilize the name even if it was in existence first. Many of these aspects depend on the state, judge and circumstances of the event.

Litigation Over a Name

When someone starts a company from nothing, he or she usually decides the name based on various factors that may increase business, accrue revenue or ensure a greater remembrance in the publicís eye. However, there are still many business owners that start off without much research completed to ensure that the name is singular in the state where it is registered. If no trademark is obtained for the company, then it is possible that registration may miss multiple business names being recorded within the same state borders. The smaller the local town or city this occurs in, the less likely that the state officials are notified of duplicate company names.

Some litigation occurs with a company that starts online. It is easy to miss the forming of a company that has an initial creation online, and it is often only when the owner decides to form a business through a physical store that the registration may be noticed with the same name as another company. Even if the words or phrases are similar, this is generally enough to lead to a lawsuit. Litigation is typically quick to start when the other company with the same or similar name has a trademark in place. They have the power to seek a remedy to the situation and ensure that the new startup ceases using the name even if it has been in place for years in certain situations.

Business Lawyer Use for Name Litigation

For the owner of the company with a trademark or similar intellectual property protection in place, it is vital that a business lawyer or intellectual property lawyer be hired to assist with violations. Any startup may register a name that could be missed which may deride business or revenue from the original company, and a lawyer is necessary.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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