A client met with trademark attorneys to get a trademark and found out there could be problems with another company with a similar name. He asked for my input and this is what I told him.
I don’t think he’ll be a risk to the other company with a similar name, but in a completely different line of business. He may even be able to get a waiver from this company, but …
But I’m wondering what are the consequences if there is a dispute? Could you establish the name in the marketplace and then lose it? I have seen a startup that had gained traction and started cash flowing lose it’s website over a naming dispute. It’s something you want to take seriously. The other guys end up with your name or your website or both, and you have to start branding all over again under a new name.
I’m also curious about the attorney. What does he mean it could be a risk? I’d like to hear something a little more specific. That sounds like he doesn’t know what to expect or whether he can even get it through the process. Is that what he’s talking about or is he talking about getting sued? I’ve gotten the impression start up communities attract a lot of unqualified professionals who get passed around like candy among startups who have no idea. I think networks are so important in those communities that referring someone adds to your status. I’ve seen more train wrecks than I’ve seen good work. Every time I touch something, there’s problems. In fact, I’m seeing this as the weak underbelly of the startup community.
I think it’s unique to the big start up communities because everyone intends to make a big impact, so everything has to be basically perfect. If you saw the Zuckerman movie, he had to keep screwing people just to stay in control. He’s been sued a bunch of times and paid off in most of them. In most places, startups are happy just to survive.
Some otherwise good startups never recovered from bad setups, bad stock grants, etc. One I’m aware of was all set for its first big round of financing when due diligence turned up the company was actually in the name of a former boyfriend. Patents, everything were in the name of the company. Everything died. Pretty funny on one hand, but scary on the other hand.
This shouldn’t be a big deal, but it can be.