Legal Question in Business Law in Georgia

Hi,

This posting is based around NAMING of a business, and the boundaries/risks around it. I have a number of questions based on my current situation. I'd appreciate any clarification around this topic...

Keep in mind, that all of the names I've used below are fictitious, but it reflects my current situation exactly.

I just started a business (it's a t-shirt clothing company) a few months old now, and I've named it "HIGH LIFE CLOTHING CO". I have registered it as a partnership with two business partners (under the name HIGH LIFE CLOTHING CO), it's not incorporated as yet. We officially launch in September 2010. At this point, we've been promoting the brand and creating buzz which has been going great so far. We've received a lot of great feedback on our clothes, and business in general.

I recently discovered that there is another company (a brand consulting company) called "HIGH LIFE" based out of the same city that I am in. Under their company, there are three child companies: 1) BLINDING; 2) JAMPER; 3) BORNFOOT. All of them are clothing lines (t-shirts, belts, footwear, respectively). The CEO of HIGH LIFE does not promote his parent company brand name, however, all three child companies are well known and profitable across North America (i.e. they have stores and have a constant flow of revenue).

I'm looking for some legal advice on how to proceed. Here are my options, based on certain assumptions I've made:

1) Change our name now, before we launch to avoid hassle. This will be taking a step back from all the promotion we've been doing, but will save ourselves from future hassle.

2) Approach the CEO of HIGH LIFE (the brand consulting company), and ask him if he would like to "invest" in us. Meaning, we propose that we give him a certain stake in our business, and in return, he would support and help build our business using his network of people in high places. If he says no, we change our name.

3) Do nothing, and run the risk of getting sued sooner or later:

a) SOONER - if we get sued in the next year, he may not even have a case, but he may just be doing it under the assumption that we have no money to see the case through. i.e. a scare tactic.

b) LATER - at this point, if we are profitable, we can see the court case through possibly.

The thing that scares me the most is the 'SOONER' scenario. We have NO money to see a court case through (even if we know that we have a case to win).

What do we do in this situation? How much do we have to tweak our name in order to avoid risk? (i.e. can we change our name to HIGHLIFE (one word), or HI LIFE)? Either way, he can still take us to court as a scare tactic.

I'd like some honest legal advice on how to proceed, even if it's just "CHANGE YOUR DAMN NAME" flat out.

Thank you greatly. Again, any professional advice would be greatly appreciated.

Thanks,

Shaun


Asked on 7/29/10, 10:51 am

4 Answers from Attorneys

David Glass Law Offices of David H. Glass, LLC

When you incorporate your business, the Secretary of State will decide if your business name is dissimilar enough to not cause confusion. If they accept your request, it is highly unlikely this other company will try to sue you. (b/c you are using an approved name by the Secretary of State).

If you would like additional advice or assistance in incorporating your company, feel free to contact my office.

David

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Answered on 8/03/10, 11:07 am
Kevin B. Murphy Franchise Foundations, APC

I respectfully disagree with the other attorney's answer. Likelihood of confusion in a trademark case depends on a number of factors including: (a) similarity of the goods; (b) whether party has registered the trademark or is relying on pre-existing common law rights; (b) whether the trademark registration is at the federal or state level; and (c) priority of use. It has NOTHING to do with whether a state agency has allowed a business registration. Trademark litigation should be your primary concern and homework needs to be done to answer the above questions. Consult with a good trademark attorney in your area for specific advice.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

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Answered on 8/03/10, 11:26 am
Glenn M. Lyon, Esq. MacGREGOR LYON, LLC, Business Attorneys

I agree with Mr. Murphy. The standard for registration with the Secretary of State is a completely different and separate standard from trademark infringement and rights generally. The answers to your specific questions are very fact-sensitive. I suggest you consult with a local attorney.

If you would like to discuss any issues further, please feel free to contact my office. The link to my contact information is below. Thank you.

The foregoing is general information only, not specific legal advice. No attorney/client relation has been created or should be implied.

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Answered on 8/03/10, 11:30 am
Byron Sanford Briskin, Cross & Sanford, LLC

In terms of the advisability of the options you listed in your questions, there is a great deal of additional information that would be necessary to answer your question fully and completely. That having been said, the "do nothing" options is the one most likely to land you and your business partners in the middle of a legal dispute.

As several of the others who have responded have correctly pointed out, one of the key considerations for your business to evaluate is what trademarks the other company holds and whether any of your "marks" are likely to infringe upon theirs.One of the key considerations in determining whether there is potential infringement is the "likelihood of confusion" between the marks, referenced by Mr. Murphy in his response.

In order to meaningfully map out a viable business strategy, it will be important to obtain a good grasp on the status of your intellectual property as well as that of the other company. Once you have determined this, it will give you some idea of whether some arrangement with the other company may be desirable, or whether it would be better to revise your marks so as to avoid any potential infringement issues and then move to protect your marks through a appropriate legal steps.

It is certainly possible that there is an opportunity for your two companies to work out a mutually beneficial business arrangement, whether it be merger, a licensing deal, or some other relationship. Before exploring such, however, it is certainly worth your time to have a comprehensive understanding of the strengths and weakness of your position, both from a legal and business standpoint.

DISCLAIMER: The foregoing is offered for information purposes only and is not intended as specific legal advice. Nothing in this communication is intended to or shall serve to create and attorney-client relationship with Byron M. G. Sanford, Esq. or the law firm of Briskin, Cross & Sanford, LLC.

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Answered on 8/04/10, 8:55 pm


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