We received a call from a frantic gentleman last week. He explained that
he was the Chief Executive Officer (CEO) for a New York based
entertainment company which he and some partners started four years ago. His
company has an extravagant website, owns and operates a
television program, and is preparing to release its first motion picture in May.
The CEO was upset, angry, and quite frankly pissed off. He had just ended
a telephone conversation with the attorney representing a different company.
The attorney informed him that their client owned the name that the
CEO’s company was currently using and that they should “cease and desist” from using the name immediately or be dragged into court.
The CEO knew from one of our Los Angeles based clients that CSGEAST.COM was an industry leader in providing Business Consulting in the areas of Business Formation & Operations, Contract Services, and Intellectual Property Management. If anyone could help him he figured it was us.
We performed a search of the company name and other records for the CEO.
The attorney was absolutely right. The CEO and his partners had failed to
perform the necessary State & Federal Name Searches and had never taken
the steps to obtain Trademark protection.
Like most businesses, they were so excited about being in business that
they failed to take care of business.
The CEO and his partners had some life changing decisions to make. Their list of options were short and none of the choices were simple or without huge financial
implications. They could:
(1) Shut down the existing business.
(2) Completely rename the business. This included reprinting all business
cards, letterhead, and any other document that contained the old company name, obtaining a new website domain name, changing the name on all bank accounts, licenses, permits, and insurance policies, and most embarrassing… explaining the
name change to all of the company’s clients, colleagues, and investors.
(3) Make an offer to the other company to buy or license the name.
There are two major misconceptions that exist among new and even
experienced business owners:
(1) Registering with the your local City Licensing Department as a Sole Proprietor or DBA (Doing Business As) provides the business with an ownership of the company name.
(2) Filing with the Secretary of State or Department of Corporations as a
Corporation, Limited Liability Company (LLC), or Limited Liability
Partnership (LLP) gives your business exclusive rights to use the company
name.
Neither registering your business with the City Licensing Department or
the Secretary of State grants your company the exclusive ownership or the right to use a name. Trademark protection can only be granted through by Federal
Government.
If you are a potential or current business owner you should stop whatever you are doing right now. Ask yourself, “Has my company Trademarked our name?”
If your answer is not a definite “Yes” you should tremble every time your phone rings.
Doing business incorrectly is worst than not doing business at all. Ponder that.
CSGEAST.COM
Providing Solutions to Build Better Business.
You need to be a member of Black Business Women Online to add comments!
Replies