The Conflict Of The Same Name
It has taken a couple of years since starting up, but Alex’s company, Dynamic Drivers, LLC, a (hypothetical) Northern Virginia-based limousine service, smashes his competition there. So he’s thinking of expanding operations. Because he already draws a few clients from nearby Montgomery County Maryland, he’s thinking of opening an office there too. But his plans hit a solid guardrail when he finds that, a few months ago, another limousine service started up in Bethesda, and that company is using the same name, “Dynamic Drivers, LLC!” Is that legal? What can Alex do about it?
Entrepreneurs take pride in naming their company. It represents their brand, but it’s also their baby. To find that someone else is using the same name, perhaps capturing business from customers that rightfully should be yours…well that is just maddening! But who’s at fault here?
Trademark Law To The Rescue…But Which One
The name of a company is just an idea. And all ideas are free for everyone to use…unless the idea is converted into property that can be protected from unauthorized use. A company’s name can be protected by trademark, which is a kind of intellectual property that protects business owners and consumers. Trademark law keeps the marketplace coherent so that consumers can be confident in relying on the name of a company to predict the quality of goods and services they are buying.
In the United States, trademark law was originally exclusively overseen by each individual State. In the 1880s Congress passed the first acceptable trademark law to give federal control over trademarks that protect companies doing business inter-state. To this day, there is still a duality of trademark law: Each State has its own laws, and the federal law applies to inter-state commerce.
Now back to Alex and Dynamic Drivers, LLC. Because Alex’s company was established in Virginia, he enjoyed what’s called “common law” trademark rights in that State. He could use the Virginia State courts to keep anyone else from using that name for limousine services in his geographical area.
However, even though he may have occasionally gotten customers from Maryland, his business was not registered in that neighboring State. So the name “Dynamic Drivers, LLC” could be registered in Maryland under that State’s laws and operate completely legally and completely separately from Alex’s Virginia-based company.
Two companies, separated by a few miles, doing the same thing, with the same name. Crazy, huh?
That is exactly why we have federal trademark registration, to avoid the kind of confusion (and frustration) that Alex is encountering. Is there anything Alex can do about this?
What He Should Have Done: Register Trademark
Well, if Alex had had the foresight to register his the name “Dynamic Drivers” with the US Trademark Office when he first started the company, he could now tell the Maryland-based company with the same name that they are infringing his right to exclusive use of that name for limousine services. And the Maryland company would have to change their name. Even if the owners of the Maryland-based “Dynamic Drivers” did not know when they chose that name that Alex’s company existed across the Potomac, they do not get a pass. Federal trademark law says if there exists a registered trademark to a name for a specific goods or services, then no other company anywhere in the USA or its territories can use the same name for the same goods or services.
But without the a certificate of registration of trademark from the US Trademark Office, Alex is mostly out of luck.
Is There Any Hope For A Trademark Now?
Can Alex get registered trademark on “Dynamic Drivers” at the US Trademark Office now and force the Maryland-based company to stop using that name? Well, that depends, so you have to wait for the next installment of this discussion of trademark law to find out.
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