Be Careful When Selecting Your New Company Name

Starting a new business venture is not easy.  Selection of entity, agreements with founders, fundraising and investments, finding office space, purchasing equipment, materials, and supplies,  creating a new web-site, and attracting customers or other relationships is difficult work.  Entrepreneurs and new business owners sometimes find the most onerous task in selecting a new organization name.  While it is important to select a business name that not only relates and identifies your business, most marketing experts would recommend that you select a name that you can build a brand around.  Eventually, as your business grows, you will build a reputation, loyal customer base, as well as a name and logo that uniquely identifies your business.  These intangible assets, or "goodwill," become valuable when you consider a sale or buyout of your business or interests. 

In addition to the creative and artistic challenges of selecting an entity name, what types of legal issues can arise during entity name selection?

First, and foremost, it may be that an entity with the same name already legal exists in Massachusetts.  If the name of your organization, and the organizational type (LLC, Inc., Corp., etc.) has already been selected by another organization, and it remains an active, valid entity, you will not be able to use that name. The Secretary of State for the Commonwealth of Massachusetts will not permit entities operated and owned by different parties to use the same legal organization name. (You can use the same trade name as another organization so long as your organization type is different. Example: You are an LLC, and the other entity is a Corporation). In this instance, your name selection may be limited by another organization's prior use and registration of that name.  

Second, your ability to obtain a domain name, for the purposes of identifying your Internet resources (computers, web-site, email server, etc.), may also be limited.  In all likelihood, unless you have selected a unique or obscure name, the domain name and extension will not be available for the original top level domains, including .com; .org; and .net.  You may have to select a name and extension at a generic top level domain, such as .attorney or .financial.  Or you will have to use a variant of your actual entity name, or adopt a trade name (D/B/A). 

Finally, and most importantly, selecting the "wrong" trade name can expose your business to a trade mark or service mark infringement cease and desist letter, or infringement action. There are both state common law trade mark laws across the United States, including Massachusetts, as well as Federal trade mark laws, The Lanham Act.  These laws and acts make it unlawful for a business that provides similar products or services to use the same or similar name and/or logo of another business that has already secured rights to that name and/or logo.  In other words,  you cannot profit from the exact use or variation of another entity's name and/or logo.  The test for Federal trade mark infringement is whether your use of the trade mark of another can cause confusion to potential customers. If you are opening a fast food hamburger restaurant, you could not use the name "McDowell's" and use a yellow "M" in an Arial font to identify your business without infringing upon one of the most recognizable service marks world-wide. 

As described above, selection of a new organization name is not an easy task, and there are some potential intellectual property legal issues that should be evaluated by a qualified business lawyer.  If your business needs business startup or business formation services, please contact Attorney Stefan Cencarik at 617-669-9780. 

Before You Develop and Release Your New App . . . Legal Issues to Consider

As our business and social communications become increasingly based on mobile devices, there will be a continuing need for new applications (apps). As such, there will continue to be a strong market for new app developers.  It may be that a group of like minded and talented individuals have decided to form a joint venture and create a new application.  Or it may the instance where one is tired of being an employee, and has developed the skills, network, and talent to improve an app and develop a new app. It is sometimes difficult to predict the market success of an app, however, once you realize the potential of your venture there are some important legal issues that one should consider. 

First, and foremost if you are developing a new app, and have not yet retained the services an a business law attorney, you may want to consider your options for forming a registered entity. In other words, you should strongly consider forming a corporation to organize your business and to set up a deal with the other founders.  If you intend on seeking any funding rounds from venture capitalists or other private investors, you should strongly consider Delaware as your state for incorporation. Delaware has favorable corporate laws and, most importantly for venture capitalists and investors who will own shares of your company, does not tax shareholders. 

The second issue to consider when developing a new app, and you will certainly need an attorney specializing in intellectual property and/or business (corporate) law to secure your rights to valuable app (intellectual property). You will need non-disclosure and non-compete (non-competition) agreements for your employees, independent contractors, investors, vendors, and other parties. You may need a trade mark to secure your rights to a particular name or tag line for your product of company.  You may produce various media, art, graphics, designs, or other written materials that require Copyright protection so that you may restrict others from publishing or profiting from your intellectual property without your permission.  Finally, you may have a process or method that is unique to your app, and you will require a patent attorney to assist you filing a patent application with the United States Patent and Trademark Office. 

Another issue to consider is how your have structured your partnership with the other founders or key managers of your new app company. Who owns what and what that ownership interest provides (in terms of profits), voting on important corporate matters, etc.  What happens when one of the founders disagrees with the direction of the company, and wants a "buyout?" How do you intend to handle the admission of new shareholders to the corporation, such as venture capital firms and other investors? These are but a few issues that any new app company must discuss with a small business lawyer in an effort to draft a shareholder agreement.  It is essential to put down the deal in writing during the early development stages of any company to avoid potential financial and legal issues at a later date.  

If you are seeking an attorney that can provide advice, counsel, and legal work for your new application (app) venture, please contact the Law Office of Stefan Cencarik, PLLC, a Lynnfield, Massachusetts business and intellectual property lawyer, at 617-669-9780 or visit www.northshorebusinesslaw.com. 

Does My Business Need a Trademark or Servicemark?

What is the difference between a trademark and servicemark? The word "trademark" is used in two senses: First, to define the legal concept that protects visual representations, and as a broad term that encompasses both trademarks and servicemarks.  In fact, Federal law specifically references trademarks, and makes little mention of servicemarks, however, those laws concerning trademarks apply equally to servicemarks.  In the case of a servicemark, it best to think of it as a type of trademark. 

A trademark is a word, phrase, logo, graphic symbol, or other device used to identify a good or product so that it may be distinguished from competing goods and services. A servicemark is used to identify a mark that markets, sells and distributes services.

When an application for registration is pending before the United States Trademark and Patent Office, you may use the ™ or TM symbol to declare that you have filed for registration of the trademark.  When an application for registration is pending before the USTPO, you may use the ℠ or SM symbol to denote that you have applied to register your servicemark. Upon approval of your application and registration of your trademark or servicemark, you may use the ® symbol to declare to the worlds that you own a valid registered trademark. 

If you have questions about when to use a trademark or servicemark, or combination of both, to identify your business, products, or services, you should contact an intellectual property attorney to determine the best strategy to protect your business assets. 

What is Trademark Infringement, and What Can My Business Do About It?

In order for your business to take advantage of the Federal rights and protections contained in the Lanham Act (the Federal trademark series of laws), you must first possess a registered trademark or servicemark.  If you have not already applied for a trademark or servicemark for your unique and valuable company name, company logo, product brand or service, you should consult a qualified business law and/or intellectual property attorney to discuss how you can protect your valuable assets.  This article will presume that a business has already received a certificate of registration of a trademark or servicemark from the United States Trademark and Patent Office.  What rights does this Certificate of Registration provide your business when you discover that a competitor or former employee (or ex-business partner) is now using your trademark? 

This blog article will focus strictly on trademark infringement, as this type of injury and civil claim is the starting point for any type of trademark dispute. (Future articles will discuss other claims and remedies concerning Cyber piracy and Unfair Competition).  

A claim for trademark infringement is rooted in 15 U.S.C. s. 1114, and declares use of a trademark without the consent of the owner to be unlawful.  Copying, counterfeiting, or imitating a registered mark in connection with the promotion / marketing, sale or distribution of goods and services, which is likely to cause confusion, a mistake, or deception to consumers qualifies as infringement. In other words, if a competing business is using a name logo to attract new customers that contains the same or very similar characteristics of your registered logo mark, you may have a claim for trademark infringement.  This is an oversimplified example, and each case is fact specific, therefore, only an intellectual property lawyer with litigation experience can determine whether your business is a victim of trademark infringement. 

If you learn that your registered trademark is being misused, then you may file a civil action in the United States District Court for the District of Massachusetts.  You will be able to obtain an injunction that prohibits further use of your mark; and in more egregious cases, obtain the profits earned by the infringer by use of the mark, recover losses incurred by your business due to the infringement, and costs of action. Prior to filing a civil action it is customary for an attorney representing the trademark holder to serve a cease and desist letter on the infringer. This will put the infringer on notice of your mark and potential claim.  

If your business already possesses a registered trademark and you suspect that you are a casualty of trademark infringement, it is best that you contact Attorney Stefan Cencarik to determine your rights under Federal law. 

Protect Your Brand and Identity: The Benefit of Trademark Protection

The intellectual property of your business is a valuable asset, and deserves the same protections as your other important business assets.  A small business typically invests a considerable amount of time, effort, and money towards developing a unique name and logo for their organization.  Those resources could go to waste, and the reputation and market for a particular business all could be in jeopardy if a competitor decides to use the same or similar logo or name.  What kind of confusion would it cause to the customers of a small business if a competing business set up a web-site or store that mimics your exact business? How would the bottom line of a business be affected by this type of scenario? And most importantly, what rights does a business owner have to prevent this type of activity?

A Federally registered trademark is the best method to restrict competition, former employees, vendors, independent contractors, and other parties from misusing your valuable name and logo for their own financial gain. A trademark also prevents these organizations and individuals from profiting at the expense of your business. A trademark is typically a visual representation, such as a design, logo, emblem, picture, or image that is associated with a business name, product or service.  A trademark allows a business to distinguish itself from its competition by providing it with a unique means of identification and brand identity.   

Applying for trademark protection is the best method to provide protection of your mark pursuant to Federal law. As soon as you file an application for trademark registration, you have the exclusive right to use your mark across the United States, and, upon approval of your application and Registration, your business will enjoy all the Federal rights and protections of a Registered ® trademark.  These rights include the ability to file a lawsuit for trademark infringement in Federal Court (United States District Court for the District of Massachusetts), which will allow you to recover damages (including lost profits and the infringer's unfair gains), legal fees and costs. You may also serve a cease and desist demand on any infringer and use the Registered trademark symbol to provide notice to any party that your mark is protected.  Your trade mark will also further your claim and demand to exclude any other entity or person from using your mark since you will be able to prove ownership and use of those marks. How do you intend to prove that you own a particular mark and used it prior to a competitor if you have not registered your mark? 

In this instance, the costs and benefits of retaining an intellectual property attorney outweigh the small cost of applying to register your mark.  The trademark process is not simply filing forms and paying a fee.  There is a substantial amount of due diligence that must occur prior to the filing of an application, then there is the technical application process itself along with subsequent filing requirement to ensure that your mark is protected throughout the life cycle of your business.  Attorney Stefan Cencarik, a small business lawyer in Lynnfield, Massachusetts, is able to assist with any intellectual property legal needs, including trademark or servicemark registration.