Archive for March 13th, 2009

Why Trade Name Infringement Is Not a Good Way to Introduce Yourself in the Industry

A new member registered for our forum the other day. Unfortunately, we had a dilemma because this person was operating under the same business name as one of our members.

So, I’m taking this opportunity to remind folks about trade name infringement and our principles and standards around that as a professional association.

Because of the online nature of our businesses, we have no geographical boundaries from each other, which makes having a unique business name more important than ever.

I don’t know how other professional associations handle it, but at the ACA, we believe it’s important to uphold the principles of operating ethically and honestly and treating each other well, which includes not infringing upon your colleagues. We do that by not condoning or enabling the practice of trade name infringement.

Besides just being the wrong thing to do, here’s why it’s not in your own best interests to tread on a colleagues toes in this manner and why it’s important for you to come up with your own unique business name:

  1. You don’t want to get sued. Someone with legal rights and established use of an existing trade name can sue you for infringement. It costs a lot of money and energy to defend yourself. If you lose (which you can by either default or because the Court finds in the plaintiff’s favor), it will cost even more. It’s a can of worms you don’t want to open. You should always expect that anyone who takes their business seriously is going to also protect their business interests just as seriously.
  2. It’s not a great way to be welcomed into the community. Relatively speaking, ours is a very small, tight-knit community. People will know you are infringing on one of their comrades. Think about it. If it were you, how would you feel if someone new came into the industry and started using your business name, the one you’ve been using for X years, the one you spent blood, sweat and tears (not to mention money!) building, and around which all your identity and marketing has been based? You are going to create ill will and negative energy for yourself by stepping on an established colleague’s toes.
  3. You don’t want to be confused with another business in the same industry. It’s going to be really important to differentiate yourself from others and that includes having a unique business name and identity. It doesn’t do you any good to be using someone else’s established business name if traffic and name recognition is going to be diverted to the person who was using it first. It creates confusion in the marketplace and there are laws in place to protect right holders from this.
  4. You don’t want to have to redo everything (e.g., web site, marketing materials, etc.). If you are caught infringing, your website can be shut down, you can be forced to relinquish domains you’ve unlawfully squatted on, and it’s going to be a lot of work and more money to start all over again.

So, what do you do? A bit of homework is in order.

To make sure you come up with a unique name and do not infringe on the established trade name rights of any of your colleagues, there are steps you can and should take:

  1. Search industry directories. Make sure no one else is using the name already or anything close to it.
  2. Conduct a search for the name (or the predominant unique identifying part of it) in several different search engines. I suggest Google, MSN, Yahoo and any others you might think of. Better to be thorough now than sorry later.
  3. Search the uspto.gov database. Check to see if anyone else in the industry is already using the trade name you’re considering or any form of it. Changing a letter or word is not going to help you if the name can be considered to be substantially the same and would still create confusion. What does all this that mean? It means it doesn’t matter if you are using “(Same Name) Business Solutions” and they are using “(Same Name) Administrative Support.” You are in the same industry and it’s the novel, identifying part of the name that matters.

One thing that people don’t commonly understand about trademark/trade name law is that owners are required to protect their rights or they could end up losing them. That means, the way the laws are written, they don’t have the luxury of ignoring an infringement and letting you off the hook. They HAVE to go after you if they want to protect their rights in the name. So you are just asking for costly legal trouble if you infringe, and especially if you do it willfully knowing full well that someone else was already using the name.

Also, your domain or domain name availability has no relevance. If you infringe on someone’s name rights (and I’m not talking about generic search engine terms), you can be compelled to relinquish the domain.

Once you find a name that is unique and that in no way can be confused with anyone else’s existing, established identity in the industry, you’re home free.

If you think you were the first to use the name, contact the other Virtual Assistant and see if you can work things out. The good will and positive energy you create by engaging in honorable, ethical business practices will serve you well.