Ed: In this article Ben Bodien from Neutron Creations recalls his experiences of naming his new web company. You can learn more about running a successful web company at Future of Web Apps Miami – buy tickets online today!
Starting a company around an exciting idea will be one of the best experiences of your life, as any entrepreneur will tell you. Company ownership is a roller coaster of a ride, and the infancy of the business will bring you some of the best of times as you charge headlong into your new world with unbridled optimism and vigour.
One of the first decisions you will make as an entrepreneur is the label to be proudly stickered onto your new venture – the company name. Of course you can plan your business model, carry out market research and put some other pieces of the puzzle into place first, but if you’re anything like me then the question of the company name will bug you until you’ve decided on one.
Selecting a name is an arduous process, as you have to find something that meets a whole bunch of selection criteria. You want a name that suits your business, ideally goes some way to describing what it is you actually do, is snappy and memorable, and isn’t a rude word for a part of the human body in a foreign language. Beyond all these basics though, you’ll also need to make sure that nobody else is already out there doing what you are planning to, using that name or one very much like it.
When names clash
With everyone so passionate and naturally protective about their businesses, it’s quite understandable that you won’t make any friends by starting up with a name that’s similar to one used by an existing company, particularly if you operate in the same industry.
When we started our company, we were eager to register our company with our chosen name of “Nucleus Creations” and get started with making a name for ourselves. We did a bit of research into companies with similar names, checking Google, domain registrations, the company registration database for the UK, and then we were off. Had we been a bit more thorough at this stage, we probably would have spotted the company who we would receive a letter from a few months later.
The letter in question was a cease and desist order from a company with a similar name, which smugly pointed out that they’d been in business for decades and had a huge client base of multinational, household brand names, and that we’d better abandon our use of the name unless we wanted to taste their metaphorical legal steel.
After a lot of deep breaths and cursing at the sky (mostly out of inward “how could we have been so careless?” frustration), we started thinking. After verifying that their claims were valid, and realising that we had indeed made an oversight, we worked out our plan of action. A simple cost/benefit analysis that fitted neatly on a post-it note made the picture clear:
- Launch what would surely be a suicidally expensive defence of our rather tenuous legal position
- Realign our branding, which would only be a minor headache given the early stage of our business
Since we were bootstrapping the company rather than taking funding from investors, we simply didn’t have the money to fund a legal battle so there was really only one option. We had recently paid good money for the design of our logo and our website which was based on our chosen particle physics theme, so we switched from Nucleus Creations to Neutron Creations (http://neutroncreations.com), allowing us to keep our designs, changing only the text in the logo.
In total, the cost of the re-branding amounted to less than £100 (new domain registrations, business card printing, and an admin fee with the UK company register), plus a bit of paperwork for our bank, and an hour’s worth of renaming accounts for web apps we’d starting using like wikis and issue trackers.
Note to web app owners and developers – please make sure it’s possible for your customers to rename their accounts completely (usernames, subdomains, etc), as it is very frustrating to get stuck with an account in your old name that has all your data in it!
How to avoid the problem
Nobody wants to get themselves into this situation, so here are a few tips for avoiding it in the first place
- Select a name you can claim some rights to. It’s a lot harder for someone to claim they have more rights to a name than you do if the company name is your name, so naming your company after yourself or its founding partners is solid strategy. You could also go for a name based on your company’s principal location, such as a street address. Of course it helps if your offices have a catchy address like “101 Super Avenue”.
- Check with your legal jurisdiction’s intellectual property (IP) registration directory to see if your chosen name is in use as part of a trademark or patent registered by another company operating in the same industry sector. In the US, check with the Patent and Trademark Office (USPTO) (search forms: http://www.uspto.gov/main/profiles/acadres.htm), and in the United Kingdom you can search the Intellectual Property Office (IPO) (http://www.ipo.gov.uk/).
- Search for your chosen name on your country or state’s company registration database. In the US, each state has its own register, and most if not all have online search tools. In the UK, you can look up companies using Companies House WebCHeck (http://www.companieshouse.gov.uk/info). Make sure you look up subtle variations and alternative spellings of your name, as well as the more distinctive component words of it, if it’s made of two or more words (for example, “Nucleus” in “Nucleus Creations”).
- Do your Google homework, searching for existing organisations’ brands which may not necessarily be registered as companies. If they aren’t legal corporate entities themselves, they’ll have a hard time making a case against you, but you’ll still have to shoulder your way past them for position in search engine result pages, if organic search traffic is important to your business model.
- Once you’ve identified a safe name, plant your flag. Register domains (optionally including foreign market domains that you may want to expand into later, but this is by no means necessary), apply for trademarks on your logo, sign up for accounts on Twitter and any other social media or web applications that you will use to operate and market your business. The earlier you create all these records of your existence the better, as who came first is one of the big questions when it comes to name ownership.
What to do if this happens to you
Should you find yourself on the receiving end of a challenge over your company name, remain calm, don’t lash out, and try the following.
- Research the case – Make sure their claims are valid by reading up about their business, and that they aren’t just squatting the name. If they haven’t provided proof that they own a particular piece of Intellectual Property (IP) and you can’t find any evidence either, ask them to send you copies of relevant registration certificates.
- Consult a legal professional – Unless it’s a clear cut case (as ours was) in which the only sensible option is to back down, you will need to seek the expertise of a lawyer who can give you case specific advice. A case review consultation won’t cost a ton – you’ll only face the infamous legal fees if you actually retain their services to take up the defence case.
- It’s probably better to re-brand – Unless you have a really well established name and re-branding would be devastatingly painful, as the saying goes; once it goes to court, only the lawyers win.