What’s in a name?
In the legal context, a business name is much more than the words on a website or the logo on the company merchandise. It is distinct identifier that implicates a company’s potential liability, right to exclusivity, and reputation.
For example, corporations and limited liability companies are required to have certain specific words in their business name, such as “Inc.,” “Company,” “Co.,” “Corp.,” or “LLC.” This tells the general public how the company is structured and that, absent certain limited exceptions, the owners of the company are not liable for the company’s debts.
However, many companies also have “DBAs” or names under which they “do business as.” These names are not the formal name of the company, can be used to “rebrand” or expand upon an existing corporation or LLC, and generally fall into two categories: trade names and fictitious names. While these two categories are colloquially used interchangeably, they are not the same.
A trade name is “a name used in business or trade to designate the business of the user and to which the user asserts a right to exclusive use.” Ohio Rev. Code 1329.01(A)(1) (emphasis added). A fictitious name is “a name used in business or trade that is fictitious and that the user has not registered or is not entitled to register as a trade name.” Ohio Rev. Code 1329.01(A)(2). A fictitious name cannot include the name of any entity registered under the Ohio Revised Code, such as a corporation, LLC, or registered trade name and does not carry a right of exclusivity.
The incentive for registering a trade name is, typically, the right to exclusive use. Because a fictitious name does not include the right of exclusive use, the primary reason to register a fictitious name, if at all, is to be able to file and maintain a cause of action under the fictitious name. See Ohio Rev. Code 1329.10(B).
To register a trade name, the proposed name cannot include certain words and abbreviations such as “company,” “corp.,” etc., and must be “distinguishable” from any other names within the Ohio Secretary of State’s records. Ohio Rev. Code 1701.05(A). Importantly, a name is not considered “distinguishable” merely because it includes differing punctuation, abbreviations, or a different tense or number of the same word. Ohio Rev. Code 1701.05(B).
If another person or business attempts or purports to use a name that is the same as, or not readily distinguishable from, a registered trade name, such person or business may be liable for trademark infringement.
“[A] party [is] entitled to protection against the use, by another, of its established trade name and trademark in such manner as to mislead the trade and the public to believe that when they are dealing with one, they are dealing with the other, or in such manner that such use results, or may result, in appropriation of the good will, a property right of the other.” Patio Enclosures, Inc. v. Borchert, 8th Dist. No. 40592, 1980 Ohio App. LEXIS 12190, 1980 WL 354611, *2 (May 15, 1980).
“The touchstone of liability [for trademark infringement] is whether the defendant’s use of the disputed mark is likely to cause confusion among consumers regarding the origin of the goods offered by the parties.” Daddy’s Junky Music Stores, Inc. v. Big Daddy’s Family Music Ctr., 109 F.3d 275, 280 (6th Cir. 1997). In determining whether a likelihood of confusion exists, a court will typically weigh the following eight factors: (1) strength of the senior mark, (2) relatedness of the goods or services, (3) similarity of the marks, (4) evidence of actual confusion, (5) marketing channels used, (6) likely degree of purchaser care, (7) the intent of defendant in selecting the mark, and (8) likelihood of expansion of the product lines. Id., citing Frisch’s Restaurants, Inc. v. Elby’s Big Boy, Inc., 670 F.2d 642, 648 (6th Cir. 1982); see also Interactive Prods. Corp. v. a2z Mobile Office Solutions, Inc., 326 F.3d 687, 694 (6th Cir.2003).
The right to trade name exclusivity can be particularly useful in protecting your brand—or, in other words, your company’s reputation. If another company is using a substantially similar name, which is likely to cause confusion among consumers and is, for example, acting illegally, not providing quality products or services, treating its customers poorly, etc., that is not conduct that you want to be confused or associated with your brand. Having the legally protected right to prevent such a bad actor from using your company name (or one that is not readily distinguishable) can be a powerful tool, especially considering the relative simplicity and low cost of registering a trade name.
For assistance forming, restructuring, and/or protecting your business, or to enforce your rights with regard to your company or trade name, please contact Attorney Casey A. Jones at (513) 943-5673 or [email protected].
