Why Registering with the Secretary of State is not Enough

I once got a panicked call from a business owner-- another company was using her company’s name and neither the North Carolina Secretary of State nor the state Attorney General would help her stop it. She could not understand why the Secretary of State would let someone name their business something that was virtually identical to hers. Some of her customers called in confusion; others likely do not realize the difference and are being diverted to the other company.

What you file with the Secretary of State is a trade name. What was being infringed was her trademark. Many entrepreneurs don’t understand the difference, and if they don’t consult with a trademark attorney, valuable intellectual property can be left unprotected.

A trade name is the company name that is registered with the Secretary of State. To be registered, the name has to be different (by as little as one character) from existing company names. That is why we can have all the following company names in the North Carolina Secretary of State database:

Acme Cleaners, Inc.

Acme Cleaners & Laundry, Inc.

Acme Cleaning, Inc.

Although the Secretary of State allows all of these companies to co-exist, it would be virtually impossible for the potential customer who just spilled red wine on her cashmere sweater to remember and distinguish which Acme Cleaners is the on the corner when she internet searches “cleaners near me”.

Using the name in commerce to designate your company as the source of a good or service, is used as a trademark (or brand name). This is governed by a whole other regulatory scheme that is completely independent from the Secretary of State. A company’s trademark may be the same as its trade name, but they are often different.

Trademarks can be:

words (MICROSOFT, KRAFT);

stylized words (COCA-COLA in script, FORD in the oval);

symbols and designs (LEVI’S stitch, CHEVROLET logo);

shapes (CADILLAC fins, PEPPERIDGE FARM goldfish);

letters (IBM, CNN);

numbers (409 cleaner, CHANEL No. 5 perfume, FORD 150 truck);

telephone number combinations (1-800-MATTRESS, DIAL-LAWYERS);

abbreviations (COKE, BUD, VW);

slogans (“YOU’RE IN GOOD HANDS WITH ALLSTATE,” “WHERE’S THE BEEF?”);

colors (pink for OWENS CORNING insulation);

container shapes (COCA-COLA bottle);

building designs (MCDONALD’S restaurants, FOTOMAT kiosks);

clothing (DALLAS COWBOYS cheerleader outfits);

sounds (NBC chimes, MGM lion’s roar); and

even fragrances (scented yarn).

If you don’t check the trademark availability of your business name before adopting it (in addition to the availability at the Secretary of State), there are a couple of ways you can hurt yourself: you might be one of 15 Acme Cleaners (hard to distinguish yourself in the marketplace) or you may adopt a name that infringes a third party’s prior use (and have to bear the costs of changing your name and re-launching your brand).

If your brand name is important to you, you should think about obtaining a federal trademark registration to give yourself the exclusive right to use your trademark throughout the United States and to stop others from using a name that is substantially similar to yours or likely to cause confusion in the marketplace. You can also file for the exclusive right to use your mark in North Carolina.