It happens to even the most diligent companies. You file to register your corporate name in a state where you’re seeking to do business, and before the ink has even dried on the application, you receive notice that your application has been rejected because your proposed name is allegedly too similar to the registered business name of a third party in the state.
You’re distraught – perhaps you had even performed a trademark search to clear the name, and that search didn’t reveal evidence of any use of conflicting names in the marketplace. This was supposed to be a breeze, and a delay could present serious business interruption costs. How can this happen and what can you do?
The bad news first – sometimes, conflicts like this are unavoidable. States’ practices vary as to how frequently they remove old or inactive corporate name registrations from their books, meaning your application could be blocked by a company that’s no longer doing any meaningful business in the state, or perhaps never was. The state may offer little information about the refusal grounds or the blocking party (sometimes, it won’t even issue a written letter) – so obtaining something substantive is often the first step.
The good news – in many (if not most) states, there are formal or informal processes in place to appeal the refusal. One potential means of appealing is by arguing that no confusion is likely to arise between the parties’ uses of their respective names. The factors in making that determination often mirror those applied in trademark law – for instance, differences in the names, differences in the businesses, geographic proximity of the parties, etc. – but not always. Usually, the governing state statute will be posted on the Secretary of State’s website, so you can see what the factors are.
Another potential option is obtaining the consent of the blocking party. Many states will withdraw refusals if you submit a consent – but be warned, this can be risky. The blocking party may demand money in exchange for its consent. And if you have already been using the name, the blocking party may sue you for infringement.
Often, the best way to evaluate your potential options is to call the Secretary of State’s office. You may be told that the office cannot provide legal advice, but usually you can learn at least what options are available and what the relevant laws might be. Then, if the path forward isn’t clear, a lawyer or third-party service provider may be able to help.