Legal Question in Business Law in California

Re: stolen business name

Unless you properly protected your business identity by trademark, tradename, copyright, etc., you are quite limited in your 'rights' to your name. There are probably more than a few using something almost identical to yours. The Corp Commissioner / Sec of State will allow almost identical name filing. You can send the company a 'cease and desist' letter, but unless you protected properly, they can use their own name, just as you can. In fact, that letter could backfire on you, if you are infringing their properly protected name, logo, etc. they could have a claim against you. To have a valid and successful claim, you'd have to show they are infringing and using it to confuse your customers in your area, and you have proper rights to it. If you think you can, feel free to contact me to discuss the risks, rewards and costs of doing so.

Re: stolen business name

Whether you can take action, whether you should take action, and the appropriate kind of action depends upon several unstated facts, but here's a thumbnail guide:

Rights to use a name exclusively do not arise merely from incorporating under that name. The strongest rights to a name arise from trademarking under Federal law. Somewhat similar but usually weaker rights may also arise under California unfair competition statutes or under a so-called common-law trademark.

Even Federal trademark law only protects the owner of the trademark with respect to certain kinds of goods. For example, ABC, Inc. may hold a trademark to call its red wine "Purple Passion" while XYZ, Inc. has the trademark to use "Purple Passion" for a variety of hybrid beet, and LMN Corp. has a trademark to call its lingerie by that name. Among non-trademarked businesses, there are probably 1,000 places in the USA calling themselves Joe's Bar, and probably a couple dozen "Acme Plumbing" and so on.

The real questions to ask yourself, and to research if you don't know the answer, are: (1) Is there a likelihood of confusion between our company and the other? (2) Are we losing business to the other company? (3) Is the other company knowingly and intentionally gaining any unfair advantage? (4) Do our trade areas overlap? (5) Are we even in the same business? (6) Can we prove money damages? (7) How distinctive is our name?

If you were, for example, as Asian restaurant named the "Silver Peony" and located in, say, Baldwin Park, and discovered that there was an Italian restaurant by the same name in Brooklyn, New York, or a florist or dress shop called "The Silver Peony" in San Francisco, this is obviously not a competitive threat, there are no provable damages, and no case.

On the other hand, if the other "Silver Peony" were an Asian restaurant in San Francisco, or an Italian restaurant in Pomona, there might be cause to worry and investigate a possible legal action.

Action could consist of writing threatening "cease and desist" letters, but once a business is well established under a given name, ceasing and desisting is not easily done. Before writing letters or filing suit, you should try for a peaceful coexistence, which may be readily possible if neither business is really threatened by the other and if neitherm business has a strong legal position based on trademark or deliberate advantage-taking with malice.