Business owners can easily research their own company’s name on any major search engine, perhaps when trying to register a domain or create a social media profile. They may find that there is another business that has a similar name to theirs. In some cases, business names may be identical.
As a business name is an important part of a company’s branding and it is the owner’s intellectual property, wouldn’t another’s use of this name be unlawful? For better and for worse, the answer to this question is quite nuanced.
Do similar or identical names create consumer confusion?
The problem with two businesses having the same name is that it can create consumer confusion. A potential buyer may go to the competition, thinking that they are buying from the other company. This scenario can be unfair to consumers, and some business owners may even use such an opportunity as a form of manipulation – intentionally picking the same name to steal sales from a competitor.
As a result, similar names are sometimes permitted if they’re not going to cause any consumer confusion. For example, if two local businesses are not in the same geographical location, there may be few instances in which a potential customer could confuse the two brands. If someone finds another business with the same name on the other side of the world, or in a completely different state, that may not be a problem. The internet does make it far easier than ever to discover that these businesses exist, but consumers are generally not going to think that the companies exist as the same enterprise simply because their names are similar or the same.
Similar or identical names are also often allowable when businesses operate in very different industries. Perhaps one company is a restaurant chain and the other is a startup tech company. Even if the names are similar, there will be no real consumer confusion risk because the industries, products and services are so different.
What if you think there is consumer confusion?
As a business owner, you may take a look at a same-name situation and decide that another company is trying to infringe on your rights. Maybe they do operate in the same area or within the same industry, and customers are constantly getting confused between the two – or you believe that you’re losing out on sales because customers don’t know exactly which company they’re buying from. If you find yourself in this position, then it’s important to carefully look into all of the legal options you have at your disposal by seeking legal guidance and moving forward in informed ways.