Choose safe name for new business
Posted on Mon, Jun. 26, 2006
The Cereal Bowl. It's the type of name that gives John Cyril Malloy III a headache.
As a trademark and patent expert with Malloy and Malloy, the Miami lawyer often finds himself coaching entrepreneurs to choose a name that sings - but is also easy to protect.
``The business person's mind thinks in terms of coming up with a name that conveys basic information about their product or service,'' he said. Terms like ``Juice Bar'' or ``Speedy Courier'' might make good billboards but are so common they're bound to cause problems.
(Early on the The Cereal Bowl found itself sending a letter to an outfit in Gainesville called `Bowls - a Cereal Joint' because the name was too close for comfort.)
INVENTING NAMES
Cereal Bowl President Kenneth Rader admits it might have made sense to invent a name, like their Chicago-based competitor Cereality did.
``It would make life a lot easier if it was a unique name, but [The Cereal Bowl] kind of says what we do and doesn't cause any confusion,'' he said. ``And I like it, and everyone else seems to like it too.''
Malloy says lawyers love names like ``Cereality,'' ``Kodak'' or ``Exxon'' that mean nothing but are ``extremely strong and easy to enforce.''
``There is always this tension between the marketing mind and a trademark lawyer's opinion,'' he explains.
While most entrepreneurs immediately think of the U.S. Patent and Trade Office when they think of registering their name, Malloy said it's also important for small companies to look at state protection. Companies selling products locally - and not across state lines - may not qualify for a federal trademark, he said.
In addition, state trademarks can be faster and less expensive to obtain.
And thanks to some recent changes in Florida law, finding that perfect name just got a little easier.
CHANGES IN THE LAW
As of next year, the duration of state trademarks will change from 10 to five years. That should help recycle ``deadwood'' trademarks that aren't being actively used, said Michael Chesal, a partner at the Miami law firm of Kluger, Peretz, Kaplan & Berlin.
The law also has another important provision - it allows companies that want to defend their trademark to sue for legal fees. In the past infringers often hid behind the high barrier of court costs.
``But knowing that they may have to pay attorney's fees, it creates an incentive to resolve the case,'' Chesal said.
Choosing the right name from the very beginning can avoid the pain of a lawsuit.
Malloy said staying out of court can often be as easy as doing a little research - flipping through the Yellow Pages, federal trademarks [www.uspto.gov] and state marks [www.sunbiz.org] to make sure you're not trampling on someone's property.
``No one wants to be in the position of investing in a business and building a customer base with a name they might have to change later,'' he said. ``Or even worse, face the possibility of being sued.''
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