It's all in a name (or not)

Choosing the optimal name for your company

Driving into the office recently, I heard a commercial for a local small business broadcast over the radio.  A well-known local radio personality and pitchman explained the business was changing its name to one that better reflected the fact that the business offered its services for a flat fee.  I had heard this commercial probably a couple of dozen times over the previous months.  Clearly, this business was spending a lot of money on its radio campaign. 

Presumably, the business sought to associate itself with the descriptive content in its new name so that potential clients and customers looking for this particular attribute would more easily find it.  I yelled at the radio, “No, bad idea!” No one heard me. Descriptive names and trademarks might boost exposure and even revenues in the short term, but in the long term, the business risks anonymity as others adopt similar names or, more likely, use a similar phrase to describe their similar services.

An example is in order, and I will use my firm as the example, rather than identify the shortsighted business.  “Leyendecker & Lemire” has been my Firm’s name since inception.  Our name, which also serves as our trademark, does not reveal anything about the services we provide.  Let’s say I convince my business partner, Pete, that we should change the name to “Colorado Flat Fee Patent and Trademark Legal Services.” To promote our new name and the fact that we provide flat fee legal services, we embark on an extensive and expensive marketing campaign. 

Initially, the increased revenues in the first few months after the change almost equal the additional expense of the name change marketing campaign.  We project that these higher revenues will continue even as we wind down the campaign. Pete and I discuss hiring new associates to handle the increased workload. The future looks so bright, I buy some shades.

Seeing our success with the flat-fee pricing model, a couple of our competitors change their websites to proclaim that they offer flat fee intellectual property legal services as well. They also starting running Google ads with headlines like “Patent drafting for a flat fee” or “Flat Fee Trademark Application Filing.”  Potential clients who heard our radio ad and type our new name into Google to find our contact information are presented with several law firms all professing to offer similar flat fee services. Some of our competitors are even using headlines very similar to our name and confuse our potential clients.  We begin to lose business to our competitors.  The marketing campaign has been wildly successful, just not in driving clients to us but rather in promoting the availability of flat free intellectual property legal services generally.

We consider suing our competitors for trademark infringement. There is no question that their headlines and services descriptions are causing confusion with our name to our detriment.  However, as astute trademark attorneys, we realize we are likely to lose any lawsuit we file.  We know descriptive trademarks do not possess broad rights and we wonder if a court would recognize our name as a valid trademark.  We also know we cannot use trademark law to prevent competitors from using certain generic and necessary terms and phrases to advertise their services, such as “flat fee.”

In the end, we are forced to shutter the firm as the liabilities associated with the advertising contracts far exceeded our revenues. It isn’t all bad, however, as I finally get the opportunity to pursue my long held dream of chucking it all and becoming a dive instructor (albeit an aging one) on Key West.

What should we and the local small business have done? Companies should pick names that are more fanciful or arbitrary instead of descriptive when compared with the services offered by the business. The purpose of a marketing campaign is to associate the type of services you provide with the unique name so that when a potential customer or client seeks to find a flat fee provider, your trademark name pops into their heads, so that when the potential client performs a Google search to get your contact information, she types your name into the box and not a descriptor of what you do.  If a competitor tries to trade off of your unique name, you send it a cease and desist letter, and if that does not work, you sue it for trademark infringement and damages. 

Still not sure?  Ponder these parting questions: Where would Amazon be today if it was named “An Online Bookstore” at its beginning?  Would Google have become the wildly successful company it is today if it began life as “A Search Engine”?      

Categories: Company Perspectives, Sales & Marketing