What happens when two companies have the same name? Find out on episode #8 of NameChangers!
Episode #8 Transcription:
In 1952, Gene and Betty Hoots of Mattoon, Illinois decided to buy an ice cream shop from Gene’s uncle named “The Frigid Queen”. After some slight remodeling, they decided to expand the menu to include burgers, fries, and other American fare. With a new menu came a new name. Betty said “every queen needs a king” so they settled on the name “Burger King”. They registered for a state trademark in Illinois in 1959.
Meanwhile, a restaurant chain headquartered in Florida which the same name had set it sights on opening some locations in Illinois. Now, understandably, the Hootses thought their state trademark would mean they were the only ones in Illinois who could use that name, but nevertheless, in 1961, the Florida based franchise opened their first Illinois location, and by 1967, opened 49 more. The Hootses decided they needed to take action. They filed suit in state court. The Hootses appeared in court with their family lawyer from Mattoon, while the Burger King franchise showed up six-highly skilled lawyers.
The case went all the way to the federal 7th Circuit Court of Appeals, where the judge decided that the Burger King franchise’s federal trademark had priority over The Hootses’ state trademark. However, since the Hootses were using the name in the Mattoon area before Burger King used it, they came to an agreement. The franchise cannot use the name in the Mattoon area, a radius of about 20mi around the Hootses restaurant, and the Hootses cannot use it outside of Mattoon. To this day, the ruling still stands.
There are countless cases like this where two seperate companies happen to come up with the same name, and in the age of the internet, it’s getting tougher to know if that is ok. So what happens if you have the perfect name, but find someone else is already using it?
I’m James Doherty and this is NameChangers.
Dove chocolate and Dove soap. Delta Airlines and Delta faucets. Finlandia vodka and Finlandia cheese. These are what are known as brand twins, two companies in separate fields with the same name. And these companies are fine with their twin, they are not directly competing. You wouldn’t accidentally buy a bar of Dove soap thinking its the chocolate and you’re not assuming your faucet comes with a round trip ticket.
This is one of the points of trademark, to lessen consumer confusion. And that is why trademark strength is stronger when the name is something no other company in that space needs to use.
It would not be crazy for two computer companies to both name their company “Motherboard Computers” because that is a common computer term, but if a company named themselves “DayDream Computers” it would be much less likely for another company in the space to name themselves that, and if they did, it could easily be seen as them copying the other.
Now if a frozen yogurt company came on the scene and named themselves “Daydream Yogurt”, they would have less of a problem because they are not directly competing with Daydream Computers and because of that, both of them have a very high likeliness of keeping their names.
One of the checks for this is called the “moron in a hurry” test. In 1971, a britist publication named the Morning Star was suing to prevent Express Newspapers from naming their new publication the Daily Star. The judge ruled against the Morning Star, noting that, “If one puts the two papers side by side, I for myself would find that the two papers are so different in every way that only a moron in a hurry would be misled.”
This idea was used in multiple cases after, including the ongoing battle between Apple Computers and Apple Records. I’ll dive into that story in another episode.
Alright, so let’s recap. If you find yourself in this situation, ask a few questions
-Is this company in my industry?
-Would people confuse the two of us and if they do, would it cause harm to either of our companies?
-Would normal people be able to tell we are different companies that only a “moron in a hurry” would be misled?
-Also, will your company serve a certain area like the Burger King in Mattoon, IL or be nationwide or even worldwide?
The reason tons of Chinese food restaurants all share the same name is they only service a small area. Great Wall Chinese in Sedona, AZ has no competition with Great Wall Chinese in Ithaca, NY. Due to that, they do not need to go to court.
Now in this, the one thing I find so interesting is how two companies in completely different fields come up with the same name. To find out, I spoke to a pair of brand twins.
To find out, I spoke to a pair of brand twins.
Michael: Hey, I’m Michael Portman, I’m the cofounder of Verb Products.
Bennet: Hi, I’m Bennet, I’m a cofounder of Verb Energy.
James: Michael and Bennett have never met before, yet. they created the same name for their companies. Let’s find out what happened.
We’ll start with Michael. Michael grew up in a small town in Texas and then went to University to study English. After college, he moved to LA to pursue his dream of being a screenwriter.
Michael: I mean I wrote five scripts, I had a TV pilot, I wrote a novel, I got a bunch of awesome meetings, but there just comes a point, you know, 5, 6, and I don’t know I got into the Hollywood Grinder and I didn’t really like it so much. I mean, I didn’t get a screenplay made, so, you know, and to see my friends, still to this day, are quote-unquote successes and they are in what one of my friends call the “document creation business”, not the making of scripts because none of it really ever sees the light of day. Or their ideas will get bought.
James: Empty pockets and empty promises tend to drive a lot of people out of Hollywood.
I moved to LA when I was 23 years old. I didn’t have any idea, but it was like the greatest. I know another guy who is an entrepreneur here in Austin and who is a former screenwriter and there is a lack of fear that you have because when you’re trying to break into Hollywood and the things people will do and the things you see and the dirty tricks and the, like, the smart things you learn, you know. when my business partner, Jason, said “Do you want to start the barbershop?” I am like “yeah, sure” what are the stakes? What are the stakes to being single and failing at a barbershop when I just spent a year and a half pouring my soul into a, you know, romantic comedy that I found out in eight days wasn’t going to cut it. You know, that’s different.
James: That’s a good crash course in rejection.
Michael: It’s a good crash course in rejection. Or worse, you don’t find out in eight days you find out in eight months.
James: So Michael moved back to Texas and started a new company,
I moved to Austin, Texas, I’m from a small town in Texas, and my best friend, Jason Rappaport, is living and here is my business partner now and in both. But he was here, and it was a different time, and we were just. I was riffing on him with what I was going to do. Now that I had moved to Austin, I moved from Los Angeles, and where I was gonna get my, you know, dry cleaning done and where the grocery store was and all the basics and haircut came up and there was really no option that was remotely fun, or not a chain or not super high-end and we thought this is a great entrepreneur town to start a sort of different take on what a barbershop could be.
Ours being for everyone, being unisex, and now you are starting to see the seeds of what is inherent in Verb. We built Birds Barbershop, I think we were in business for about 5 or 6 years, it has been about eight with Verb, so that’s about right. 5, 6 or 7 years. We grew this, we always had a problem on the retail shelf. We are a professional salon and you have to offer professional products and moving the needle with retail is really difficult especially since we are more affordable with what a haircut should be you know our prices are in line with probably what Verb is everything in the line is the saem price $16 across the board, like I said, very simple thinking of what, our barber shop is very straightforward and if you can’t afford the product on the shelf, if the product costs more than the haircut why are you gonna buy it essentially so we started tinkering, we started looking around for a line that sort of filled that bill and the more we looked the less we found and the more we got picky about what we wanted to see and at the end of that process we said this is what we want a line to be, and i was younger and I started it. That is sort of the story of how it came to be.
James: Bennet grew up in Chapel Hill, North Carolina and went to Yale University for his undergraduate education. There, he met his co-founders Matt and Andre and together they decided to solve a problem
Bennet: Late one night Sophomore year, Matt walked out of a coffee shop with a coffee and a granola bar, having paid too much for it, and it didn’t give him a great energy boost. It kinda left him feeling jittery and still hungry and searching for a healthy and delicious way to get energy. So, he pitched the idea to me and Andre that there should be a better way for folks to get energy in their day-to-day lives and we got to work in our dorm room kitchens making all sorts of caffeinated food. We really settled on an energy bar with 90 calories and a shot of espresso worth of caffeine from organic green tea and this kinda had a better energy effect than anything else we had felt before. They tasted delicious, so we decided to start passing them out to friends seeing what they thought of them. Then from there we rented out a local bakery at night and sold energy bars during the day in between classes. Then we realized we had tapped into something and then decided to launch an online business. Since then we’ve grown pretty rapidly and now we are all a direct to consumer online subscription energy bar company.
James: So where did the name Verb come from?
Michael: Wordsmithing is how I put money on the table, you know, and I just believe there’s always a right one and you know you haven’t got it when you haven’t got it. So, we had lists and lists and we didn’t want it to be anything too male, we don’t like possessives anything because it really doesn’t belong to anybody. It’s really for everybody. So how do you do all these different things at once? And so when I was talking about in my run on sentence, but so we had this long, long list and we were going over it and I remember we were in a hot tub at the YMCA just going through being like what about, ahh, nothing really, and then “verb” got said in the moment and it we just knew it was right. You get that feeling, yea you getting that feeling its like yup, that’s it, stop trying.
James: Everyone shut up. We got it.
Michael: Yea, we got it. No dissenters, please.
Bennet: So, actually it’s funny the story behind Verb. so we had a long list of names we were testing out and someone suggested, I can’t remember who it was, someone suggested Verve like v-e-r-v-e, like with enthusiasm or with energy. Someone misheard them and they were like, oh verb, that would be funny like the part of speech, that would be pretty funny. Actually that’s a really good idea because we wanted to give people the energy so that they could do whatever verbs it was that made them who they are. So you could eat the bars before you went on a workout, went on a run, studied, work, wake up in the morning, whatever it may be this could provide the energy for it. So it kinda gave us our brand mission of providing energy behind every verb.
James: Now there’s also a third player in this story, a surgical device company named Verb Surgical. This company was created under a partnership between Google and Johnson & Johnson and they’re working to create innovations in traditional and robotic surgery, sounds pretty cool. Unfortunately, the company has not agreed to speak at the time of recording.
So we have three companies all with the name Verb and, funnily enough, this isn’t Michael’s only brand twin.
Were you worried though because it is such a common word? It is hard to take a part of speech and make people think of your shampoo.
Michael: Yea, but you know what, I mean, first of all a lawsuit sounds like the last thing on earth an entrepreneur needs right now as a distraction but, ironically, with Bird’s, we had the same problem. There’s a hair product called “Byrd” spelled with a Y and there’s the scooter company called Bird which, let me tell you what I’m talking about when I mean naming meta moments.
I arrive at work the day that scooters took over the planet and there are five Bird, I have never heard of, nobody even told us that the scooter thing was gonna happen, five Bird branded scooters, which I had never even heard of the brand, never even seen the scooter, parked in front of the place I go to work which is a Bird’s Barbershop. In our same font, you know, helvetica, it is like a broad, all caps, like, oh my gosh, like really identical and you’re like, what you going to do, you know, I mean. So verb’s got an energy bar and a surgical, you know, equipment. Now the energy bar, I must tell you, we do get at Verb hair products, we do get questions about our energy bars quite a bit, but that is obviously not us.
James: Here’s Bennet’s experience.
Bennet: There are some other verb titled companies. There’s a shampoo company and a surgical device company, for instance, that we’ve talked with. But there is nothing in the energy food space, nothing really in that space that has our name. So, we were able to kind of carve out a nice niche there. And you can get a trademark as long as you don’t cause customers any confusion so we cleared it with the lawyers, made sure it was all set. Kind of ran with it. And then with food and with any kind of large CPG company, it really is all about getting your name out there and extending the reach as much as you possibly can.
No one’s going to try and, like, you know, eat a shampoo product or put a Verb bar in their hair. So, we’re not really in, we don’t see ourselves as in conflict with the cosmetics company.
James: So what’s our takeaway here? Both Michael and Bennett agree that, yes, there’s other companies named Verb and, yes, sometimes consumers do ask them questions about the other, but that hasn’t caused any real problems in their business.
So, if you’re set on a name, and there’s another company name that don’t let that immediately stop you. Make sure to talk to a good trademark attorney to see if you both can coexist and maybe you’ll have a nice little run-in with the other company just like Bennet did with the people at Verb Surgical.
Bennet: We were in Palo Alto for a summer in an accelerator and I literally just drove up to their office and walked in to their manager and was like “Hey, we make these energy bars, they’re called Verb, would you all be interested in them?” And they absolutely loved them.
James: NameChangers is made in association with names NameStormers, a naming agency in Austin, Texas. Find out more about them and name stormers. Com. Very special. Thanks to speak to Michael Portman and Aly H at Verb Products. Find out about them at verbproducts.com and Matt, Andre, and Bennet at Verb Energy. Find them at verbenergy.co. If you like the show, please rate and review us on iTunes. It really helps people find us. I’m James Doherty, we’ll see you next time.
Michael: Oh gosh, where does Verb come from. That is the hardest question ever and of course your whole podcast is based on this one thing! Sat and thought about it, and it will be hard to articulate it, but I will try anyway.