The notion that the main consideration when choosing a new brand name is its availability as a .com domain is widespread. What is less well known is that you may not be free to use your chosen domain name if the name would infringe on someone else’s trademark rights.
Countless start-ups regularly trip up because they do not realise they need a legal opinion to assess whether the name is free to use. So, there is no point paying substantial sums buying domains as one early stage business owner I met did a while ago. He had paid £10,000 for a .com domain only to be challenged by the owner of a similar trademark when he began using it for his new business. The disruption and financial consequences were an irritating distraction for him. It was completely avoidable. Had he consulted a trademark lawyer before choosing a name he could have avoided this set back. However, many business owners are reluctant to pay for a professional opinion, regarding this as an unnecessary expense. Ironically, this particular business owner, then went out and bought another domain name, again without having any checks, and only turned to us to register it for him. He was lucky that this time there were no problems with the name.
As this is a topic of interest to me, I was amazed when I came across a recent blog post from the CEO and co-founder of “Skilljar” which focused purely on whether the .com was available when choosing a name. In that case the business was changing its name, and surely this is one time when you really don’t want to get it wrong. The disruption of changing names 3 times would be so distracting and wasteful for the business.
Based on her experience of not being able to purchase the .com to the name she was using – Everpath – Sandi Lin decided to abandon use of the name, Everpath (even though her company held every other domain variation, including the important .net) and set off in search of a new name for which the .com domain would be available.
Using the crowdsourcing platform, Squadhelp, she searched for available domain names, and settled on the name “Skilljar”. She was convinced the crowdsourcing site would minimise the time involved searching for a new name. Based on over 800 submissions, she was inspired to pick a new name. Using ‘skill’ and ‘master’ as roots to search for names on Sedo, a domain name auction site, for ‘Buy now’ listings she then found several names that were available to buy within a maximum price limit of $5,000. She also checked for social network availability and searched Google for similar results. So it was that “Skilljar” was born.
What she omitted to do was to check whether the name Skilljar was too similar to a trademarked name in the USA and other parts of the world.
The correct way to choose a name is to do some Google research, check that the desired domain is available, and then get a legal opinion on the name. If the results are favourable, then register a domain as well as a trademark. Trademarks are the way to stake your claim to a name. Even though it is not necessary to register a name to use it, registration gives you far better rights over a name, and puts you in a stronger position if someone else starts using the same name (which they are more likely to do if you haven’t put them on notice of your rights over the name by registering it as a trademark).
So, while Lin is advocating crowdsourcing as a quick and relatively cheap approach which took her only 8 hours and cost the comparatively modest sum of $2,195, it is important that others looking to find a new name appreciate that this expense would be completely wasted if someone else had trademark rights over the name.
As a trademark lawyer I find her decision to rebrand questionable and surprising, particularly as at no point did Lin even consider the trademark implications of her proposed name. She was willing to forfeit all brand confidence to date, and choose a new name, and did not first think to check that the new name would be available for her to use.
Whilst arguably an inconvenience to have to first find out whether someone else has trademark rights over a name, start-ups are in danger of spending thousands of pounds more on enforced rebranding, and on domain names that they are not free to use.
So, don’t just focus on a brand name’s web-friendly characteristics. Avoid a lawsuit for trade mark infringement, and make sure you are using a name you can own.