Why a trademark search before incorporation makes sense
One common pitfall of incorporating is selecting a company name without first conducting a trademark search. Typically, founders consult with a corporate attorney to see if their desired corporate name is available for incorporation without any regard to the possibility that others may have registered a similar name for similar products or services.
At some point after incorporation, the startup company may decide to file a trademark application for their company name which they intend to develop as a brand for their products. To their dismay, their trademark application may get rejected by the USPTO because someone else has already registered a similar name for similar products.
What is the difference between a company name (trade name) and a product name?
As far as trademark rights are concerned, there are no practical differences between company names and product names if they’re all being used to promote and sell product. If a company chooses to keep its company name unknown and use a different name or brand for marketing, then the official company name will not pose much risk of trademark infringement.
In most cases, however, startups choose a company name they intend to use in marketing and selling their products. So, the plan would be to use the company name in commerce to sell their products. Such use would be generally be considered trademark use that incurs the risk of infringing the rights of a trademark owner who may have been using a similar mark for similar goods/services from an earlier point in time (i.e., called “priority” in the trademark world.)
What are the risks of not searching trademarks prior to incorporating?
One major risk is that other trademark owners with prior, superior rights may sue you for trademark infringement. If your company remains unnoticed for awhile, you may be able to avoid or defer this risk. I know of very few startups who do not want the world to know about what they’re doing once they launch.
Assuming for the moment that other trademark owners have not yet found out about your usage of your trademark, you may end up on their radar by filing a trademark application. Certain vigilant trademark owners use trademark monitoring services to alert them of new trademark filings for similar marks.
What if others have registered trademarks for different goods or services or in different classes?
The issue is not whether those registered trademarks are identical to yours. Instead, the primary issue is likelihood of confusion – i.e., would your mark be considered confusingly similar to those registered marks? It is possible and common for likelihood of confusion to be found even if the goods/services seem quite different.
It’s even common for likelihood of confusion to be found where your goods/services would be classified in a different class number than those of the registered marks. For example, restaurant services could overlap with food or beverage products. Software in class 9 could overlap with various online services or telecommunications services.
How an early knockout search can save time and money
A knockout search of USPTO trademark filings could save huge hassles down the line. Only live trademark filings matter, but dead trademarks can often provide some insight on what happened to similar marks. If registrations or pending applications for highly similar marks are found upfront, founders can quickly pivot to a new company name without the costly burden of changing several projects/investments already in motion.