Corporate Issues
Corporate naming issues?
Let’s say I made a big corporation (I’m talking like Google, Apple, etc.) and named it abc radiology. Then 5 years later, another major corporation emerged with the name abc pharmaceuticals. Would I be able to take legal action against them for having “abc” in their name?
And if yes, is it a possible outcome that my company lets abc pharmaceuticals keep their name in exchange for an established amount of money?
This would be an issue of trademark law, NOT corporate registration–the later adopted name would not be allowed (generally speaking) only if the names were much more similar (if they were both, for instance, “ABC” or otherwise exactly worded).
What happened would depend on whether the PTO found that the two marks would be easily confused by the consumer. This in turn depends largely on what each corporation actually sells (goods) or does (services), and where the corporations provided services/goods.
The following is a general guide to how it works–it becomes much more nuanced and would largely be determined by examining the facts of the situation. If both were determined to provide health services (class 44; see the link below for a list of the different classes. ), and competed in the same regional market, the firm that had first registered (or possibly, used) the name would be entitled to use it. If both provide different services and/or in different regions, both would be entitled to keep using the mark.
The name becomes your property (called “intellectual property” because it is intangible), so you can definitely negotiate an agreement licensing the other firm to use the mark (name), for a fee or some other consideration (stock etc.).
CFA Exam Prep Level 2 Corporate Finance: Financing and Control Issues A
