Legal Question in Business Law in Texas

Here is the question, say there is a non-profit operating in Fort Worth, TX that feeds the hungry, their name is ABC Feed the Hungry, Inc. and they have developed an intricate business model, that is unique. Then another company, unrelated to the first, opens another non profit next door in Dallas, TX and they incorporate as ABC Feed the Hungry of Dallas, Inc. The original company is ok with the new company opening, they are not in "competition" and they are doing a very worthwhile endeavor. But then, something tragic happens and ABC Feed the Hungry of Dallas accidentally has a problem with their food supply and sadly, a couple of people pass away as a result of the "bad" food. Can the families of those affected end up suing BOTH organizations, even though the 1st organization had no direct dealings with the 2nd company (except maybe to offer some advice along the way casually)?


Asked on 7/30/21, 9:13 am

1 Answer from Attorneys
Frank Natoli Natoli-Legal, LLC

One orgnization is not going to be liable for another orgs negligence simply because they share the same name. But you shouldn't have two business in close proximity that are in the same or related industry sharing a name or it can cause confusion in the marketplace and lead to a host of issues.

It is of course best practice to clear it before you start using any trademark and starting with a strong one is your best strategy. Know as well that merely registering your business name with a state or county agency or acquiring a domain does not convey any right to use that name in commerce as a source identifier or trademark. For example, I can presumably register my new tech start up "Boogle" with the TX secretary of state because there is no other business already doing business there under that name, but this does not mean that I would not be infringing on the Google trademark, which I would be. The onus is on you to ensure the name you choose is not a problem.

Your trademark will be one of if not the most important and valuable business assets you will have and you will ultimately spend more money in support if it than you will anywhere else (advertising, marketing, PR, branding, packaging, etc.).

Whenever you endeavor into investing in a trademark it is very important that you conduct the proper clearance due diligence. In the US, this means searching under both federal (USPTO) as well as common law because trademark rights stem from use in this country NOT registration. This means that acquiring a federal registration does not necessarily mean that you are not infringing on another's intellectual property.

I suggest that you consult with a lawyer in private and discuss your objectives in more detail. You can start by calling around to several for a free phone consultation, get some insights then pick the best fit to work with.

If you would like to discuss further over a free phone consult, feel free to contact me anytime that is convenient.

Our firm is now referred by the American Bar Association (see under the New York section):

http://www.americanbar.org/groups/delivery_legal_services/resources/programs_to_help_those_with_moderate_income.html

Kind regards,

Frank

www.LanternLegal.com

866-871-8655

[email protected]

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Answered on 7/30/21, 9:42 am


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