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The Name Game : Protect your Shop Name

For two similarly named body shops in Limerick, Pa., it’s now up to the courts to determine who keeps their name. Want to avoid fighting a similar battle? Learn how to protect your shop name and keep yourself out of court for violating someone else’s trademark.

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For 10 years, Thomas Minger has owned Limerick Auto Body in Limerick, Pa. For 15 years — in the neighboring town of King of Prussia — Ken Sperring owned Ken’s Collision Center.

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About a year ago, all that changed.

Sperring closed Ken’s Collision Center and moved back to his hometown of Limerick, reopening and renaming his shop Limerick Collision Center.

But can two body shops with such similar names — Limerick Auto Body and Limerick Collision Center — legally operate in the same town? Does the second body shop’s use of the town’s name infringe upon the first shop’s reputation and ability to do business?

Unhappy with the name of Sperring’s new shop, Minger filed a petition in the Montgomery County Court asking for an order barring Limerick Collision Center from using the town’s name. The judge sided with Minger, saying that the two names were "confusingly similar," and issued an injunction ordering Sperring to change the name of his shop.

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"We testified to at least 12 documented incidents in court," says Kenn Picardi, attorney for Limerick Auto Body. "There were mix-ups with insurance company assignments, parts deliveries and people coming to look for their car in the wrong body shop."

Sperring and his lawyer, Greg Dean, disagreed with the ruling and appealed to the state Superior Court to overturn the preliminary injunction. The court reviewed the facts and temporarily lifted it.

After the Superior Court’s decision, Picardi went straight to the top — the Pennsylvania Supreme Court. "There’s a rule that says when you’re dealing with cases that stop someone from doing something immediately, you can appeal that decision directly to the Pennsylvania Supreme Court," says Picardi. "Which is what we did."

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The Supreme Court reinstated the trial judge’s ruling. Judge J. Michael Eakin, one of the Supreme Court judges (and amateur poet?), wrote his decision as a "limerick" for the two shop owners:

"Limerick Auto and Limerick Collision
Are so close one may clearly envision
That the two are the same
So a limerick I frame
And join in my colleagues’ decision."

That may be the end of his limerick, but it wasn’t the end of the case. After further evaluating Sperring’s appeal of the preliminary injunction, the Superior Court issued a ruling that Limerick Collision Center could keep its name for now because Limerick Auto Body still needed to prove secondary meaning.

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"When businesses use similar names, it’s inevitable that confusion will result," said the state Superior Court judges. "However, incidental customer confusion doesn’t establish that one business’ use of a name has given it a secondary meaning." The judges also noted that there was no testimony by any member of the public that "Limerick" was associated solely with Limerick Auto Body in the context of autobody repair.

What does that mean for Minger and his shop?

"Basically, we have to bring in people from the town to say, ‘When we hear of an autobody shop in Limerick, we think of Limerick Auto Body.’ We have to prove that we’re well-known to the public in the area," says Picardi, who’s asked the courts to again reconsider and is still waiting for their decision.

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In the meantime, Sperring has sued Minger for $84,000 in punitive damages.

"We have more than 120 businesses here with the name Limerick," says Dean, Sperring’s attorney. "It’s ludicrous to say you can’t use ‘Limerick’ in the name of your business."

So what about every other small-town USA shop? How does this case affect other shops across the country?

"I could site about eight different examples in the Philadelphia area alone where the same situation exists," says Dean. "It’s not an unusual situation to have the name of the town and then ‘Body Shop’ or ‘Collision Center.’ Not far from here is a town called Trooper, and they have a Trooper Autobody and a Trooper Collision Center."

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When you establish a business in the state of Pennsylvania — where the two shops involved in this case are located — the state Corporation Bureau is supposed to screen out any deceptively similar names. However, the bureau has no legal authority in name infringement cases; it simply processes applications and rejects a name if it’s identical or substantially similar. According to Dean, the state Corporation Bureau has taken the stance that anyone can use the name of a town in their business name. The remaining portion of the name is what they check to see if it’s deceptively similar. At face value, the terms "auto body" and "collision center" aren’t identical. So in the Limerick case, say both attorneys, the names varied enough for the second one to pass through the bureau.

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Picardi assumes other states have a similar structure as Pennsylvania and warns that, at least in Pennsylvania, there’s really no way to be entirely sure the shop name you choose is in the clear.

Is all this even worth fighting for?

Minger says yes. He chose the name Limerick Auto Body 10 years ago and has spent the past decade building a reputation and a future for his shop.

"You don’t pick a name that’s been out there and is well-known in a community or even one close enough to it that you derive some benefit from it because people think it’s one in the same or a branch," says Picardi.

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And according to some studies, the most important thing you can do when picking a name for your shop is to make sure it sets you apart from the rest. A good business name quickly tells people what business you’re in and is distinctive enough to avoid being confused with someone else’s.

So was Sperring’s choice of Limerick Collision Center a mistake since a Limerick Auto Body already existed up the road? He certainly wasn’t going to stand out. Or didn’t he want to?

If you’re thinking of opening a new shop, there are ways to avoid getting into a similar circumstance as Minger and Sperring. How?

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Once you’ve chosen your business name, you need to make sure you aren’t violating someone else’s rights to that name. According to nolo.com — a leading provider of self-help legal books, software and Web-based information and tools — there’s only one way to ensure you aren’t in violation: Do some digging to find out whether another business is already using an identical or similar name.

Unfortunately, warns nolo.com, there’s no one place to look when searching for conflicting business names. In large part, this is because a business can establish a trademark simply by using it — and millions do just that. So you have to use various search methods to hunt for registered and unregistered trademarks.

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How do you go about your search?

Before you invest time and money in a formal name search, take a few minutes to quickly screen out some of the names on your list. Nolo.com suggests typing a name you’re considering into an Internet search engine, such as Google or Altavista. There, you can quickly see whether someone else on the Web is using a similar name to market similar services.

In addition, everyone starting a business — no matter how small — should search the federal trademark database to see whether the name they’re thinking of using has already been registered with the U.S. Patent and Trademark Office (PTO). If you use a trademark that’s already on the federal register and the trademark owner sues you, you can be liable for what’s called "willful infringement" — knowingly violating someone else’s trademark — even if you didn’t check the federal database. Willful infringement carries more costly penalties than other trademark violations.

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You can search for federally registered trademarks by using the free trademark database found on the PTO’s Web site — www.uspto.gov/web/menu/tmebc/index.html.

In addition to checking the federal trademark register, it’s smart to check your state’s database. The state register is often part of the Secretary of State’s office, though in some states it has a department of its own.

To start your search for unregistered business names, try the Internet. By using several search engines, you can quickly see whether and how someone else is using a specific name. Keep in mind that any particular list you use to search for unregistered trademarks is likely to be incomplete, so it’s best to use several different methods.

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After you search for registered and unregistered trademarks, check with your county clerk’s office to see whether your desired name is already on the list of fictitious or assumed business names in your county. According to nolo.com, this list will contain names you won’t find in any other database — usually unregistered trademarks of very small companies. If you find that your chosen name or a very similar name is listed on a local fictitious or assumed name register, you shouldn’t use it.

If any of your search methods turn up an identical or similar name to the one you want to use, you may or may not be able to use it, depending on the circumstances. If your desired name uses part of a name that’s already registered for official trademark protection — especially at the federal level — pick another name. Owners of federally registered trademarks have the right to use their trademarks anywhere in the country, and it’s easy for them to bring — and win — lawsuits against trademark violators.

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There are a few instances, however, when taking a name that’s already in use is OK, as long as the name isn’t famous. If the name is being used by a company that provides a very different product or service than the one you plan to sell, then you can probably use the name, advises nolo.com. This is especially true if the two businesses serve only local markets and are hundreds of miles apart. The key is whether your use of the name, or something similar, would confuse customers about the origin of the service.

Once you’ve found an available name, you may want to register it, though it’s not required. Registering your shop’s name as a trademark can help prevent a competing business from using a name that could be confused with yours and help if you should ever find yourself in court — and the subject of a judge’s limerick.

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Writer Melissa McGee is executive editor of BodyShop Business.

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