Trade Names Law and Legal Definition
Trade names are names associated with a business and its reputation. Business names are not by themselves a trademark. The name that a business uses to identify itself is called a "trade name." This is the name used on its stock certificates, bank accounts, invoices and letterhead. The business name may be given some protection under state and local corporate/LLC or fictitious business name registration laws (or protected under federal and state unfair competition laws against a confusing use by a competing business), but it is not considered a trademark or entitled to protection under trademark laws unless it is affixed to a product or service. However, if a business uses its name to identify a product or service produced by the business, the name will then be considered a trademark or service mark and be entitled to protection if it is distinctive enough. For instance, Apple Computer Corporation uses the trade name Apple as a trademark on its line of computer products.
A second-comer needs to take care to distinguish their product if they are using a name similar to a predecessor, especially in a competing product or service. Also, a generic term may acquire a preferential right to the use of such a name or word under the doctrine of secondary meaning. In such a case, a duty may be imposed upon a subsequent user to take such precautions as may be necessary to distinguish or identify his goods or business and thus avoid confusion on the part of customers or patrons.
In determining whether relief for unfair competition will be granted, some of the factors considered are the distinctiveness of the name, the similarity or relationship between the subjects involved, whether the goods or services are furnished to different classes of customers, and whether motives of fraud or bad faith intent were involved. Although the ultimate issue is whether the defendant's use of the complaining party's name or symbols results in a confusion as to the source or origin of the goods or services involved, courts will consider:
- strength of plaintiff's name;
- relatedness of goods;
- similarity of names;
- evidence of actual confusion;
- marketing channels;
- degree of purchaser care;
- defendant's intent in selecting name;
- likelihood of expansion of product lines.
