How a good name is one you legally own
OK, so you own the web domain and you have a business registration. Do you then own the name? Could you capitalise on it? Often not. Others can still stop you from using your name. This is part three in a series of articles about what makes a good brand name.
Company name, trade name, word mark
Too often, businesses think they can freely use a name by having registered it as a company or trade name*. Some even think they own it when they have the domain name.
The reason why this is not the case is that whoever owns the name as a word mark can still stop its use as a trade name. As a word mark is intellectual property, it enjoys stronger protection. The owner of a word mark can even stop the use of names that are not exactly the same, but only similar in a potentially confusing way. A word mark is valid throughout the country, while a trade name only applies locally. And in the first years after registration, a word mark can be protected even if it isn’t actually used yet.
Check for conflicting word marks, always
This not only means that you should probably register your name as a word mark. More importantly, you should consider letting a trademark attorney check for usage risks posed by existing wordmarks. Their owners might object successfully against your use of a name even if you don’t register it at all.
For small companies, such research is often too expensive and not always important because they attract little attention. But for scale-ups and mergers that are growing and expanding, it is an important consideration. In a buy-and-build strategy, synergy is sought which often means a new, better common name. Of course, this must be one that competitors cannot stop using. Private equity firms are often surprisingly unaware of this.
Not every word can be a word mark
You cannot call your company Computer if you build computers. You cannot claim a word for an existing category as your intellectual property. However, an apple grower would be allowed to call himself Computer and, as everyone knows, the reverse has already happened. This is possible because the name does not describe the category. It is a metaphor, which is allowed because it designates not the product but the brand.
That brings up the question how a name like Booking.com can exist for a booking service. The reason is that the name leans heavily on the “.com” part for distinction. Even then, some legislators must have scratched firmly behind the ears. It no doubt helped that they were one of the first in a category that hardly existed yet.
Names consisting of generic claims such as "great" or "the best" may also be rejected. Similarly, a name like Shiny would not easily be accepted for a detergent brand in England or the US.
But in non-English-speaking countries such as Morocco and Argentina, it is indeed a word mark for detergents as it is not a standard claim there. In the UK, the word mark is also registered, but by a provider of high-quality video editing services. As such, it is again a distinctive name that can hardly be a literal product claim.
And not every name *should* be a word mark
Even if a name is distinctive enough to be a word mark, it not always should. Too many existing names in fact lack brand potential. Grab some random IT business names from an average American town** and you get ones like Trans-Comp International, CloudFit Software and Upsource Solutions. These names don’t score high on future-readyness and engagement, because they focus on the offering instead of conveying any unique and relevant ambition.
The point here is that you need to own not only the name, but even more the story it conveys. An appealing and distinctive name starts with a ditto brand ambition.
For that, we would like to refer to both of our previous articles on what makes a good brand name:
* The company name and the trade name are slightly different. The trade name is normally a less complicated version of the company name, to allow simple communication. For example: Johnson can be the trade name where Johnson LLC officially is the company name. In some countries you need to provide both when you register your company with authorities.
** In this case Lynchburg, Virginia: an exceptionally average town in the US.