Products may come and go, but company names can last forever. When starting a new company, take the time to choose a name that distinguishes your business from the competition. Otherwise, even with the best idea or invention, your customers may have a difficult time finding you and your product in an increasingly crowded marketplace.
All entrepreneurs face a classic marketing dilemma: They want a company name that tells consumers exactly what they sell, but descriptively naming a new venue the Country Music Hall, Blues Center or Music Palace creates confusion with other similarly named businesses. Ironically, even companies that specialize in branding--The Brand Consultancy, Brand Design, and Name Development--fall victim to this misguided approach. Such descriptive names make it hard to stand out from the competition.
Indeed, the U.S. Patent and Trademark Office won't even register a name that is merely descriptive unless it has acquired a reputation. The standard used by the USPTO in determining whether a name is descriptive is whether it describes an ingredient, quality, characteristic, function, feature, purpose or use of the product. Keep this simple test in mind when choosing a new company name.
It's All in the Name
Successful company names are suggestive rather than descriptive. When applied to the product, they require imagination, thought or perception to determine the nature of the goods. A hypothetical example of a suggestive company name is the Sunshine Orange Juice Co. Sunshine suggests the nature of the orange juice that the company sells, without immediately describing it.
Even better than suggestive terms are arbitrary names that comprise common words, but when used to identify particular products, do not suggest or describe a significant ingredient, quality or characteristic of the goods. For example, Amazon has no meaning other than trademark significance when applied to book selling, much like Apple for computers and Camel for cigarettes.
Another approach is to pick a fanciful name--one that has been invented for the sole purpose of functioning as a trademark, such as Pepsi, Kodak and Exxon. What a company does today may not necessarily be what it does tomorrow, so choosing an arbitrary or fanciful name allows for future flexibility. Since Amazon has no significance in connection with books, Amazon.com was able to expand into selling music, electronics and most every other kind of product under the sun, using the same company name. Similarly, the name Google has unlimited flexibility as a brand because it isn't descriptive or suggestive of an internet search engine.
Even if one avoids choosing a descriptive company name, there's another issue to consider: Some names are so common that they lack any real marketing strength. Think of names like Strategic Solutions or Pro Express or Business Advantage for a consulting service. They share the same shortcoming--failing to resonate in the minds of consumers.
In today's crowded marketplace, compound marks work better than one-word marks. If one term is descriptive or common, the other term should help the overall name stand out. Indeed, the whole may be more than the sum of its parts--DoubleClick or RazorFish.
How to Trademark
The USPTO may register common non-descriptive names, but they run the risk of conflict with other similar names. The more common a name, the less likely the USPTO will register it.
An exception is when an entrepreneur owns a generic domain name--a word that cannot usually be trademarked on its own. For example, the company that owns Cars.com may want to use Cars.com as its name to make a direct association between the company and the website.
The best approach to company naming is to create a list of five or 10 names and send them to a trademark lawyer, who can quickly tell whether or not these names can be trademarked. After whittling down the list, the trademark lawyer can conduct database searches on the proposed names and determine the least risky candidate.
Have a Story
Using an arbitrary name can set apart even smaller and growing companies--not just large ones. Pangea3 (co-founded by one of this article's authors) is a legal outsourcing services company that uses the story behind its name to get people to remember the company's services.
When consumers ask about the derivation of the name, they get a story: Pangea was the single supercontinent that existed before continental drift separated the world's continents. The second Pangea occurred when mass transportation reconnected people from the separated continents, enabling global commerce. In the third Pangea, the internet and global telecommunications systems have electronically reconnected the continents and their inhabitants, making continental and national borders irrelevant, creating, once again, a single supercontinent.
From this story, people remember what the company is all about. Plus, the company's application to register Pangea3 with the USPTO avoided conflict with other company names in a nascent but growing industry and saved the company legal fees.
Is there a story behind your new business name? If not, go back to the drawing board and think of some suggestive or fanciful names that will help your company stand out from the crowd. Finding a distinctive name that will interest consumers, will help brand your company identity and define itself in a congested marketplace. Support your unique name with some creative advertising and gain that competitive edge from the start.
Peter S. Sloane, a partner at Ostrolenk Faber LLP and a member of the Association of Patent Law Firms (APLF), is an attorney specializing in trademark matters. His work includes counseling clients in the adoption of new trademarks as well as trademark searching and filing in the U.S. and abroad.
David Perla, a lawyer by training, is co-founder and co-CEO of Pangea3, a leading legal outsourcing company, with nearly 300 employees in India and the U.S. He previously served as vice president of business and legal affairs at Monster.com.