Can 2 companies have a similar name?

On Behalf of | May 23, 2023 | BUSINESS & COMMERCIAL LAW - Business Formation & Planning

When someone is trying to come up with a name for their new business, it’s best to find something unique. This helps the business stand out. It also lowers the odds of a dispute over intellectual property rights.

That being said, maybe you have come up with an excellent name for your business, only to find that there’s another company with a similar name. Is that going to be a problem, or can you continue on with the name you selected?

Will consumers be confused?

The big question to ask is simply if the name choice would create consumer confusion. This is why you can’t name yourself after major brands with large followings, such as Walmart or Apple. This would clearly create consumer confusion and appear as though you are doing it to try to take sales from the companies that already owned those names.

However, maybe the other company isn’t nearly as well known, and they work in a different industry. Perhaps your company provides auto repairs and the other company is a local tourism service provider. Consumers aren’t going to be confused, so using similar names may be permissible.

Another thing to think about is the location of that company. The internet makes it easy to find another business with a similar name, but what if that business is located in another state or even another country? Once again, there may not be any actual consumer confusion because of the geographical difference.

What if a dispute arises?

Intellectual property can certainly be complicated, and there are situations in which disputes will arise between multiple business owners. That’s when it’s very important for those involved to understand exactly what legal options they have and what steps to take next.