Business Tips – Choosing A Name For Your Business

As a bonus installment to our business tips series, we are pleased to provide a review of the classifications of business names under trademark law.  Each of these categories of names has different protections under trademark law. In general, the more unique the name is, the more protections that it receives.  A thoughtfully selected business name may prevent others from using the name for their business.

There are four types of business names, which are listed in accordance to their hierarchy of distinctiveness:

                                 1) Arbitrary or fanciful;

                                 2) Suggestive;

                                 3)Descriptive;

                                 4)Generic.

Category one, “Arbitrary or Fanciful,” is almost always protectable due to their obscurity and deviation from the norm (inherently distinctive). These names can be created through made up terms or common words in uncommon usage. Examples would be the use of the word “Apple” to describe a computer company, or “Xerox.”

The second category, “Suggestive,” is also protectable on its face, which means that no secondary meaning is needed. In other words, these names suggest characteristics or qualities of a good or service, but do not actually describe them; it takes extra thought for the public to associate the term to the product or service. Famously, an example of this arose in Peaceable Planet v. TY, 2004, 7th Cir., in which the Court found that the name “Niles”  was descriptive when it was used to name a toy camel.

Names which are descriptive are also protectable if they are distinctive and have been shown to have a secondary meaning. Simply put, the general public recognizes and associates a name with a specific business. A perfect example would be “Home Depot”.

The fourth category, Generic, is not protectable, as allowing a business to trademark a generic name such as “Store” or “Gas Station,’ would create unfair competition and leave competitors at a significant disadvantage.

We hope that the above guide has helped clarify your business’ options in the search for a business name that is properly protected under trademark law.

This article was written by Nezar Habhab, Law Clerk.

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