Many business owners use their surname in their business’ name and brand identity. This is especially true in the restaurant, fashion and alcoholic beverage industries.
Is this a good business strategy? Not always. Let’s look at some common scenarios that come into play in these situations.
Selling a brand or a business is a goal of most entrepreneurs. The business owner “cashes in” on the good reputation, loyal customer base and the brand equity, reaping the financial success of the hard work and investment in growing the business and loyal client base. ROI is about the exit plan for the founder(s). However, when the creator later uses his or her surname in connection with a new business venture, the purchaser often claims breach of the contract’s non-use and non-compete clauses. It is the seller’s surname, so he or she assumes s/he has the right to freely use his or her own name.
When the surname was turned into a brand and a trademark it took on a different status. The purchaser paid significant sums for the brand name and good will and complains when the seller uses the name for another related product or service. This happens more often than you would expect. After the business is sold, the owner is often looking for his next project or adventure and is naturally drawn to the industry he knows so well. One example of a famous trademark dispute is Walter Taylor and Taylor Wines. This highly publicized dispute is a textbook case on the topic. This has also been an issue with several fashion designers.
There are other pitfalls because surnames are considered descriptive marks and can’t be registered as trademarks until they acquire secondary meaning.
Use of the surname gives a false impression of an association, sponsorship or endorsement between the old and new branded products. If you are considering using a surname as your business brand, consider the future implications. There may be other brand trade names that have marketability without these complex issues associated with using your family name (surname).
If you are considering using your surname in your business name, or have already done so, you may wish to consult with an experienced trademark attorney about your brand strategy and options.