Attorney Thomas B. Burton answers the following question:
"Can Two Companies Have a Similar Name?"
➮ Want to set up an LLC and not sure where to start?
Download a FREE copy of my 5 Step Wisconsin LLC Startup Guide here!
➮ Subscribe to Burton Law LLC’s channel to get notified when we post new videos. Subscribe here!
Hello, I'm Attorney Thomas Burton. I'm a business law, estate planning and asset protection attorney here in Wisconsin and today's question has to do with businesses and the name of your business.
So let's jump right into it. The question is the following:
"I registered my business/created S.Corp in state I'm doing business in. No one had the same name, similar but not same. However, as I was looking to see how my business showed up online, I see another website with same name as mine. It's the company that had a similar name registered in the same state but publicly, they are my same exact name. They are an LLC, I am an S.Corp, can this occur without a problem? It's very easy to confuse us as the same company. We do similar activities. We service the STR industry in multiple areas and have our own rentals. The other company just has property rentals. Do I need to trademark my business name; would it even make a difference? Do I need to change my name since they had one similar first? Thanks!"
So you can see this is a complex question and as you're thinking about your business or naming your LLC, this is an important thing to keep in mind. Now he says STR and mentions rentals, I think he's referring to the short term Rental Industry which we commonly think of as rentals on Airbnb, VRBO and just renting through your own website, a vacation home, things like that and you can see where there's names that are popular in that industry that likely a lot of people want to use. So it sounds like he registered in the same state, now this question was asked in Wisconsin, so I'm assuming it's here in Wisconsin and he says an S.Corp, I, just as a side note, in general you don't form an S.Corp, you file the S.Corp election with the IRS, to be taxed as an S.Corp. So it's likely he formed either a C Corporation or an LLC which can both file the S Corporation election.
And then, this other entity, he doesn't say, he says, "they are an LLC", so the Wisconsin department of financial institutions has the corporate name registry and they have requirements for forming a new LLC or corporation and under those requirements, the name cannot be substantially similar to a name already in use and they use some examples where in their naming guide, you can't just have one small filler word be the difference like 'Acme incorporated' and 'The Acme Incorporated' or 'Green Bay Packers Inc,' and 'The Green Bay Packers Inc' which actually the 'Green Bay Packers', I believe used to be 'The Green Bay Packers', then they dropped 'The' and it's 'Green Bay Packers Inc'. Also just the last designation, whether you're an Inc, a C Corporation or an LLC.
So he's saying, they have the same, similar name, it sounds like "publicly had a similar name registered but publicly, they are my same exact name".
What may have happened with this first business is that they formed an LLC and then they started marketing the LLC, leaving off a little bit of the name and that's what they're marketing.
Let's say they're called 'Wisconsin Vacation Rentals' or something like that but the LLC name is 'Wisconsin Vacation Rentals of Madison LLC', but their signs and everything just say 'Wisconsin Vacation Rentals'. I'm just making this up but that does happen and in terms of trademark and intellectual property, you gain the rights by use of the name, so if this came down to whether or not he could trade mark his name, you have to look at who used the name first in the course of business and in Wisconsin, there is a way you can register a trade name separately with the state of Wisconsin but it doesn't give you federal trademark protections. So if he wants to pursue that angle, I think you should meet with a trademark lawyer who can do a full search for you and get into this analysis of who used the name first.
As far as the corporate names, on file with the department, they only look at are you actually filing a name already in use and if it isn't, substantially similar, if it is distinct, 'Distinct' is one of the words they use and it's not already in use, you can file and get that name. So someone could have been using 'Wisconsin Vacation Rentals' as their marketing for 10 years or even just as a sole proprietor but you filed the LLC name but doesn't necessarily mean, you have the sole use of that phrase in your marketing.
So that's why it's important for other business owners, when you're thinking about starting a business, there's two sides of this, there's what Corporate or LLC name is available in the state of Wisconsin but you should also look at realistically who are your competitors and do an online search, a local search "Who is already using this name, that I want" because if you're the type of business that needs, that wants to build a brand which it sounds like this guy does as well, even if you can get that LLC name, that's just a little bit different than the other one. If it's going to be confusing likelihood of confusion for people searching online and finding you with Google and things like that, it might not turn out the best for you and maybe you're better off going with another name, that is totally distinct from this one, that someone else has marketed for years and years.
There's ways like when I'm forming an LLC for people, you know if their first choice of name is available, sometimes we can add a word instead of 'Badger Best Painting', we can make it 'Badger Best Painting of Madison LLC' or something like that or 'Northwest Badger Painting LLC' to get the LLC name but if you're competing with 'Badger Painting' and they have all this rights and use of the name, just because you can get the LLC name, doesn't mean you're going to be ultimately successful competing it with Google and online marketing and trying to get that website address and things like that.
If your main objective here is to keep the name, I would sit down with the trademark lawyer and look at your options and who used it first and things like that. If you're just kind of confused over why two entities can't have a similar name, there is a way you can change your LLC name. So if you haven't been in business that long, maybe you just want to change it completely to something entirely different. So that you aren't confused with the other company and I was just listening to a podcast the other day, the founder of Zillow and he said why he came up with Zillow was he really liked words that are invented. So they aren't, he was able to get the domain name and he just knew, he wanted to build a brand around it and it did come from pillow and something else, but if you're trying to build this brand, you might want to look at a made-up name completely. I mean that's up to you and your decision on the marketing end.
Also you could search the trade name database, just to see if the other person did register that trade name, like they have the LLC like I mentioned Wisconsin vacation rentals of Madison LLC but they're marketing it as Wisconsin vacation rentals but registering as the trade name alone, isn't the end of the analysis. They could have just been using the name for years and years and have built up that intellectual property, in the name, from the use of the name.
I know this gets a little bit confusing but for others watching, the point of this video is don't just search the corporate registry and end your analysis there if you're looking to build a brand. You really want to do your due diligence on the front end, looking for competitors in your industry, in your area who may already be using the name to decide if it's a good name for you and your new business.
So great question, thank you for asking and we'll see you next time!
© 2021 Burton Law LLC. All Rights Reserved. Transcript and captions provided for ease of access for the hearing impaired. For questions about this topic, or to suggest a topic for a future blog post, please contact the office.