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A trademark search is more nuanced than most entrepreneurs realize. Simply searching for your exact proposed name in the USPTO database and finding no results does not mean your name is safe to use. Professional trademark attorneys conduct multi-layered searches that look for phonetically similar marks, visually similar marks in design categories, marks in related goods/services classes, and prior common-law uses outside the federal registration system. Understanding this methodology helps you conduct a more effective search and know when to engage an attorney.
The stakes are significant. Using a name that infringes an existing trademark — even unknowingly — can result in a cease and desist letter requiring you to stop using the name immediately, a lawsuit seeking lost profits and damages, destruction of infringing inventory and materials, and court-ordered payment of the trademark owner's legal fees in exceptional cases. The cost of a proper search ($300-$2,000 for a professional clearance) is trivial compared to rebranding costs and litigation exposure.
The USPTO uses the Nice Classification system, a set of 45 International Classes (1-34 for goods, 35-45 for services) that group related products and services together. Your trademark registration protects you only in the classes you specify. Common classes for new businesses include: Class 35 (advertising, business management, retail services), Class 42 (computer software, technology services, SaaS), Class 36 (financial services, insurance), Class 41 (education, entertainment), and Class 44 (medical services). You can register in multiple classes for an additional fee per class.
Trademark infringement does not require identical marks — it requires a "likelihood of confusion" among consumers. The courts and USPTO use a multi-factor test (the DuPont factors) including: similarity of the marks in sound, appearance, and meaning; relatedness of the goods/services; channels of trade and customer sophistication; strength of the senior mark; and evidence of actual confusion. This is why a name that is clearly different from a competitor's name in your head may still be too similar under the legal standard — and why an attorney's analysis of your specific situation is valuable before significant investment in a name.
A knockout search is a quick, informal search designed to immediately eliminate names with clear conflicts — identical registrations in the same class. It takes 10-30 minutes per name and costs little or nothing using free databases. A full clearance search is comprehensive — covering phonetic variations, design marks, state trademark databases, common-law databases, and multiple classes. Full clearance searches typically cost $300-$1,500 depending on the firm and number of marks searched. Use knockout searches to narrow your list, then commission a full clearance on your top 2-3 finalists before making a final decision.
You should search and potentially register both — but the priority is the name that customers actually encounter in commerce. If customers see "Stripe" (product brand) rather than "Stripe Payments, Inc." (legal entity), the product brand name is what needs trademark protection. Legal entity names are registered at the state level and do not automatically confer trademark rights. Many companies have a legal entity name and a different trade name or product brand name, each with separate trademark considerations.
Do not ignore it and do not respond without legal advice. First, have a trademark attorney evaluate whether the claim has merit — many cease and desist letters are sent aggressively and the legal basis is weaker than claimed. If the claim has merit, your options include: negotiating a co-existence agreement, redesigning to increase differentiation, licensing the name, or changing your name. The worst outcomes occur when businesses ignore cease and desist letters and the trademark holder escalates to federal court litigation, which becomes exponentially more expensive.