Nomen est omen!
A Swiss start-up recently learned the hard way how tricky choosing a name for a company, product or service can be. When Facebook’s lawyers showed up at the door, a legal battle began that the start-up could not win. What to consider when choosing a name.
The Swiss company StressBook was founded three years ago and offers an app to help employees deal with stress. The app records stress factors in the form of a diary and suggests preventive measures. The Swiss newspaper “Handelszeitung” reported on 9 February that two start-up entrepreneurs, Kurt Lobisger and Jan Schleuniger, have lost a court battle against the social media company Facebook.
In the summer of 2014, the founders of the company registered the trademark “StressBook” in the Swissreg register. Facebook’s lawyers appealed. The Federal Administrative Court has now partially upheld the appeal. As a result, the “StressBook” trademark has been cancelled for the “software” class, making it virtually impossible to continue using the app under its previous name. The Federal Administrative Court shared Facebook’s view that there was a likelihood of confusion. The decision states that the adoption of the second part of the word “book” leads to a strong similarity between the two brands. In addition, the pronunciation rhythm and the sibilant sound of “face” and “stress” before the second part of the word further strengthen the similarity. In view of Facebook’s high degree of recognition, a likelihood of confusion relevant to trade mark law had to be assumed. The Institute of Intellectual Property had rejected Facebook’s complaint and found no likelihood of confusion. As the court of last instance, the Federal Administrative Court now followed the plaintiff’s arguments.
Zurich-based trademark attorney Martin Steiger comments on the decision on his website: “The example shows – independently of trademark law – that one should not rely on judges sharing one’s “common sense”.” Of course it is irritating that Facebook can claim the term “book” and that Facebook’s popularity played a role in the judgement. But it shows how careful you have to be when choosing a name. If you want to capitalise on the strength of another brand with a slight similarity, you are taking too big a risk. Names that could even remotely get in the way of a big player should therefore be avoided at all costs. Google, Amazon, Apple & Co. are not to be trifled with. iName, iLoose, iPay.
Quite apart from the legal risk, a company name should be as independent as possible in order to be able to stand out on its own merits. If you want to benefit from another brand name, you are also taking a reputational risk, because another brand may be shining brightly at the moment, but who knows what values it will stand for in the future? Instead of relying on well-known brands, it is worth investing in finding a name that is as independent and memorable as possible. Leaning on is like falling, only earlier.
When setting up a company, a thorough analysis of the brand personality should be carried out before the concrete search for a name. What functional and emotional customer benefits can the new brand credibly offer in the long term? Which benefits are particularly valuable from the customer’s point of view? What values will differentiate the new brand from its competitors? Only on this basis can a sustainable brand be developed. Once a unique, memorable and, if possible, timeless name has been found and the domain “.ch” and/or “.com” is available, the risk of confusion is, of course, still present. As trademark searches and registrations are always provisional and there are long opposition periods, several name variants should be pursued in parallel in the search process. And in addition to the legal examination, it is worth conducting an impact test in the form of a comprehension, association and acceptance test in the core target groups. This is especially true for trademarks that are used in different cultural and linguistic areas.
Due to time constraints or a reluctance to commit resources, the naming of a company is often not given the attention it deserves. Many company founders are unaware of how damaging a wrong name can be to their business in the future. The entire “stressbook.com” website is currently in “maintenance mode”, the company profiles on LinkedIn and Xing have been deleted. Interestingly, however, StressBook still (as of 21/02/18) maintains a Facebook profile under the name banned by the court and is fighting there:
“Thank you for all the feedback, support and contributions. StressBook as a brand will be discontinued. But nobody will kill the idea… #davidagainstgoliath #getupandmoveon #facebookvsstressbook #stresspad #stressdairy #stressbook #stressnotes”
One can only hope that the start-up will quickly find a new name for its good business idea that will no longer cause anyone stress.