In some cases, it’s an intellectual property violation if one business is named after another. It could cause consumer confusion and harm the other company’s branding. A corporation that has a national presence has potentially spent millions of dollars on establishing that brand name, and that intellectual property is legally protected.
However, there are many cases in which businesses can have similar names. If you search for businesses with generic names, you can find them all across the country. You can even find some major brands that may not be exactly the same, but that are close: Such as an airline and a plumbing parts manufacturer both operating under the name of “Delta.” So when are similar names prohibited and when are they allowed?
The consumer is the key
If you’re wondering how close the names can be, just think about the consumer. Will the name cause any confusion or manipulate them in some way?
For instance, maybe both businesses are operating in very different industries. If one company sells building materials and the other company offers travel planning services, there won’t be any consumer confusion. The industries are so different that no one would mistake the two companies.
The geography is also important. In many cases, a business that is in another region or another state can have a similar name. This is especially true for small businesses that only have an audience in their local area.
How well-known the company is may also play a role – you can’t name your company “Wal-Mart”, no matter where you are located or what you sell – but the main key is usually how it is going to impact the consumer. If you find yourself in an intellectual property dispute, perhaps because another business owner has infringed on your IP, be sure you know what legal options you have.