Most people think that if you’re doing business using a name different from your own (or from your entity’s) (aka “DBA”), you should file a Fictitious Business Name Statement (“FBN”) with your local county. But did you know that you’re actually legally required to file the Statement, and that you must do so within 40 days of the date you start using your fictitious business name? California Business and Professions Code § 17910 reads, in pertinent part, “Every person who regularly conducts business in this state for profit under a fictitious business name shall do all of the following: (a) File a fictitious business name statement in accordance with this chapter not later than 40 days from the time the registrant commences to transact such business…” (Ibid.) Failure to file an FBN won’t likely lead to government action against you, but it can severely hinder your business’s ability to take legal action in the event it needs to do so. (Cal. Bus. & Prof. Code § 17918.)
Further, and likely even less well known than the legal requirement to file an FBN, is the fact that filing the FBN creates a rebuttable presumption that you have trademark rights to use the fictitious business name in your county. (Cal. Bus. & Prof. Code § 14411.) That’s certainly not to say that filing an FBN grants you unassailable rights to use the name (it doesn’t, and trademark law is a complex subject beyond the scope of this brief blog post), but it can help protect you against a competitor who does business using a confusingly similar name within the same county.
Here’s an application of the above: imagine that you’re running a business in your county and you’ve been using a great fictitious name. Because you like to do things correctly, you’ve filed an FBN within 40 days of starting to use the name. But right when you hit your stride (propelled by all the marketing you’ve paid so much for using the fictitious business name), you receive a “cease and desist” letter from a lawyer for a competitor who says you need to stop using the name because it’s confusingly similar to a name the competitor was using before you started using yours. While some might take the letter at face value and immediately cave to the pressure, I’d urge you to do some diligence first: what if the name that competitor claims is a fictitious business name, but the competitor hasn’t filed an FBN with the county? Such a failure would place the competitor in violation of the law, and that failure could prevent the competitor from accruing superior rights to the name. Plus, because you’ve filed your FBN, you’re in compliance with the law so you get to argue that your right to use the name is protected by Cal. Bus. & Prof. Code § 14411. Therefore (and here’s the best part), you get to turn the tables and argue that it’s your competitor who needs to change its name instead. All of a sudden, because you’ve complied with a seemingly minor law, that “cease and desist letter” seems less and less frightening, doesn’t it?
Greg Borman is an attorney in San Diego, California, and he advises and represents businesses of all sizes and stages, as well as their owners. He can be reached at greg@bormanlaw.com or at (858) 232-7100.
