Can I use the same business name as someone else?

We frequently are asked by clients or potential clients if they can use a trademark or business name that is the same as a pre-existing company.  The answer is that it depends.  Trademark law protects the source identifying function of a trademark, trade name, product trade dress, or any other “name, symbol, or device, or any combination thereof” that is “likely to cause confusion, or to cause mistake, or to deceive as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person.”  See 15 U.S.C. 1125.

Thus the typical test for trademark infringement is if there is a “likelihood of confusion” between the marks.  Each Federal Court of Appeals has developed its own test for likelihood of confusion; in the Ninth Circuit the test is called the “Sleekcraft Test” as the likelihood of confusion test for trademark infringement is set forth in the case of  AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979).  The factors of the Sleekcraft Test are as follows (as taken from the Ninth Circuit Model Jury Rules):

(1) Strength or Weakness of the Plaintiff’s Mark. The more the consuming public recognizes the plaintiff’s trademark as an indication of origin of the plaintiff’s goods, the more likely it is that consumers would be confused about the source of the defendant’s goods if the defendant uses a similar mark.

(2) Defendant’s Use of the Mark. If the defendant and plaintiff use their trademarks on the same, related, or complementary kinds of goods there may be a greater likelihood of confusion about the source of the goods than otherwise.

(3) Similarity of Plaintiff’s and Defendant’s Marks. If the overall impression created by the plaintiff’s trademark in the marketplace is similar to that created by the defendant’s trademark in [appearance] [sound] [or] [meaning], there is a greater chance [that consumers are likely to be confused by defendant’s use of a mark] [of likelihood of confusion]. [Similarities in appearance, sound or meaning weigh more heavily than differences in finding the marks are similar.]

(4) Actual Confusion. If use by the defendant of the plaintiff’s trademark has led to instances of actual confusion, this strongly suggests a likelihood of confusion. However actual confusion is not required for a finding of likelihood of confusion. Even if actual confusion did not occur, the defendant’s use of the trademark may still be likely to cause confusion. As you consider whether the trademark used by the defendant creates for consumers a likelihood of confusion with the plaintiff’s trademark, you should weigh any instances of actual confusion against the opportunities for such confusion. If the instances of actual confusion have been relatively frequent, you may find that there has been substantial actual confusion. If, by contrast, there is a very large volume of sales, but only a few isolated instances of actual confusion you may find that there has not been substantial actual confusion.

(5) Defendant’s Intent. Knowing use by defendant of the plaintiff’s trademark to identify similar goods may strongly show an intent to derive benefit from the reputation of the plaintiff’s mark, suggesting an intent to cause a likelihood of confusion. On the other hand, even in the absence of proof that the defendant acted knowingly, the use of plaintiff’s trademark to identify similar goods may indicate a likelihood of confusion.

(6) Marketing/Advertising Channels. If the plaintiff’s and defendant’s [goods] [services] are likely to be sold in the same or similar stores or outlets, or advertised in similar media, this may increase the likelihood of confusion.

(7) Consumer’s Degree of Care. The more sophisticated the potential buyers of the goods or the more costly the goods, the more careful and discriminating the reasonably prudent purchaser exercising ordinary caution may be. They may be less likely to be confused by similarities in the plaintiff’s and defendant’s trademarks.

(8) Product Line Expansion. When the parties’ products differ, you may consider how likely the plaintiff is to begin selling the products for which the defendant is using the plaintiff’s trademark. If there is a strong possibility of expanding into the other party’s market, there is a greater likelihood of confusion.

(9) Other Factors. (any other factors the jury may consider)

Typically the first four factors above are the most important factors.  If the trademarks are the same or very similar, the senior trademark is strong conceptually, and the goods are the same or very similar, there is a higher chance a court or the Trademark Office will find a likelihood of confusion.  Conversely if the senior trademark is weak and the goods are not related, there is a lower chance of a finding of a likelihood of confusion.  The likelihood of confusion test is a sliding scale that assesses all of these factors to determine if there is a likelihood of confusion between two trademarks (or event the same trademark on two goods).  Because this test is very factually intensive and requires a significant amount of legal analysis, we recommend that if you have a question regarding the selection of your trademark and if it creates a likelihood of confusion, to contact one of our trademark attorneys.