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When can 2 businesses have a similar name? 

On Behalf of | Apr 5, 2023 | Business Formation |

Generally speaking, when coming up with a name for a new business, it does need to be unique. This can sometimes become a challenge, especially when the name of the business is something rather generic or common.

However, this does not mean that two businesses always have to have different names. There are situations in which similar names – or even the exact same name – could be used.

If there is no consumer confusion

What business owners need to remember is that they should avoid causing consumer confusion. If a consumer is unsure which business they are purchasing from, or if they mistake one business for the other, then that can be problematic. It may even be alleged that one business owner is doing this intentionally as an effort to steal sales from the other business.

However, if the two businesses are in very different geographical locations, it may be permitted. There shouldn’t be consumer confusion between two businesses in different states unless they have a national audience – like Walmart or Apple.

Another thing to consider is if the businesses even work in the same space. An example of this is that you can buy a Delta brand faucet and you can also ride on Delta Airlines. Because these two businesses are seeking an entirely different audience, there should not be any consumer confusion.

Your legal considerations

It’s important for business owners to ensure that they don’t commit IP violations, even without intending to. Owners also need to know what legal options they have if they believe another business may have violated their rights, perhaps leading to consumer confusion and the loss of sales.