WHAT’S IN A COMPANY NAME?

What’s in a company name? A great deal if you choose the name carefully, as it will identify the company and be recognized by consumers as the source of the company's products and services. With this in mind, you will want to:

  1. Choose a name that is memorable;
  2. Choose a name that is simple and easy to spell;
  3. Choose a name with a positive connotation;
  4. Consider an eye-catching design or logo; and
  5. Consider a distinctive corporate color.

Choose a Name that is Memorable

When selecting a company name, remember that the name will communicate the essence of your business to the public. Accordingly, you will want to consider a name that either describes your products or services (for example, "United Parcel Service"), one that is suggestive of your products or services (for example, "Greyhound Lines" or "Microsoft") or even a name that is coined, arbitrary or fanciful (for example, "Apple" or "Xerox").

Although a descriptive name may more immediately identify a company and its products or services, in the long term, a descriptive name will be difficult to distinguish from other company names, as a single company cannot have exclusive rights to a descriptive term or name. Instead, a company may want to choose a name that suggests something about the company and its products or services, as the owner of a suggestive company name will be able to protect its rights in the name. Perhaps the best name is one that is coined and used in a "totally arbitrary and non-descriptive" manner, such as Etsy, an e-commerce website that sells handmade and vintage items. According to CNN, Etsy was selected by its founder because he wanted a "nonsense word … and to build the brand from scratch." Apparently, Etsy came to him while he was watching the Italian film, "8 ½".

(See http://www.cnn.com/2011/LIVING/04/22/website.name.origins.mf/index.html?hpt=C2.)

Although a coined name may not be immediately recognizable to the consumer, it can quickly develop name recognition and will not run the risk of confusion with another company name, thereby providing its owner with the strongest protection.

Choose a Name that is Simple and Easy to Spell

When deciding on a company name, you will also want to choose a name that is simple and easy to spell, so it will be easy for a consumer to recognize, remember and spell. Particularly in this era of domain names, a short name can be critical to a company’s success. Depending on a company’s financial resources, it may want to hire a marketing organization to assist with the name search and then narrow the names down to a handful for clearance by its trademark attorneys. Regardless of how a company selects a name, this last step – clearance of the name – is essential to ensure that the company does not select a name that is identical or similar to a pre-existing company name and, thereby, risk trademark infringement. Although this step may seem tedious and unnecessary -- particularly when the frontrunner is determined to be unavailable -- the consequences of infringement can be severe and extremely expensive if a company has to choose a new name and completely rebrand everything to do with the company -- from its products, services and website to stationery, business cards and signage.

Choose a Name with a Positive Connotation

It goes without saying, that, with very few exceptions, a company will want to select a name that has a positive connotation – a name that consumers can identify with and that makes them "feel good" about the company. According to CNN, when Microsoft was considering a name for its new search engine, it wanted a name that was "a single syllable, memorable, and easy to spell." Although Microsoft was naming a search engine, rather than a company, the same key factors discussed above, apply. One name that Microsoft considered – and rejected -- was "BANG," because it could not be used as a verb and have a positive connotation. Instead, the company selected "BING," because it sounded like "BINGO" and Microsoft hoped "BING" would also connote the moment an idea was created.               

(See http://www.cnn.com/2011/LIVING/04/22/website.name.origins.mf/index.html?hpt=C2.)

Consider an Eye-catching Design or Logo

An eye-catching design or logo can be worth many millions of dollars to a company, once the consumer comes to associate it with a particular company. For example, the Coca Cola logo or the Nike "swoosh" stripe are known around the world and are immediately recognizable to consumers as the source of a cola drink and athletic shoes, respectively. As with choosing a company name, selecting a logo or a particular design for the company name can require consumer research to determine whether the design will be viewed favorably and provide a positive connotation. In addition, a logo can also run the same risk of infringing another company’s trademark rights, so it is essential that the company’s trademark attorneys clear a logo design, in addition to the company name, before the company begins to use it.

Consider a Singular Corporate Color

Although selecting a corporate color – and sticking with that color – can be more difficult than selecting a company name or logo, when properly enforced, the benefits to a company can be invaluable. In order to maintain strong trade dress rights in a color, however, it is critical that once a color is selected, the company never deviate from its chosen color and that it provide explicit guidelines both within the company and to any licensees or franchisees as to the proper use of the color. There is no room for error, if a company wants consumers to associate a particular color with the company, as well as enforce the company’s rights in its corporate color. Everyone is familiar with the pink used by Mary Kay, the brown used by UPS, and, more recently, the multi-colored logo design used by eBay. (In fact, UPS has recently run a significant advertising campaign that emphasizes the color brown in its branding.)

Once a company has selected a name – or even a handful of frontrunners – it is critical not only that the corporate name be registered in the state the company selects for incorporation (often Delaware, because of the benefits of incorporating in that state), but that the company also file trademark applications with the U.S. Patent and Trademark Office (and in other foreign jurisdictions, if the company is multi-national or is contemplating expanding beyond the United States). By registering its company name as a trademark, a company will have exclusive rights to use the name with its particular products and services and to enforce its rights against infringing use by another entity of an identical or similar name with the same or similar products or services.