Request By:
Mr. Gary D. Payne
Legal Counsel
Office of Secretary of State
Capitol Building
Frankfort, Kentucky 40601
Opinion
Opinion By: Steven L. Beshear, Attorney General; Gerald Henry, Assistant Attorney General
We have your letter in which you ask for our opinion as to whether the new name Kentuckiana Investigative Services is deceptively similar to the old name Investigative Services, Inc., within the meaning of the Kentucky Business Corporation Act. You note that KRS 271A.040 and KRS 271A.530 provide that names of new corporations "shall not be the same as, or deceptively similar to," the names of already existing corporations in Kentucky. We will presume for answer that Kentuckiana Investigative Services is the proffered name of a new corporation, even though it does not contain the corporate designation required by KRS 271A.040(1)(a).
The rule for resolving your question appears to be in
Burnside Veneer Corp. v. New Burnside Veneer Co., 247 S.W.2d 524 (1952). There, the court had before it the now-repealed statute, KRS 271.045, which provided in part that "the corporate name shall not be the same as, nor deceptively similar to," the name of an already existing corporation. The issue was whether the New Burnside Veneer Company had adopted a deceptively similar name to Burnside Veneer Corporation. The decision favored the New Burnside Veneer Company.
In its opinion, the court stated:
A greater degree of similarity in names of corporations will be tolerated where they are geographical or descriptive than where the first corporation's name is fanciful and arbitrary. A corporation cannot, however, by adopting as its name words simply indicative of the character of the business which it proposes to carry on, or by adopting words indicative purely of locality within the state, acquire a right to their use to the exclusion of others. * * * The pre-emption of such designations as geographic and generic terms for corporate names, if permitted, would unduly interfere with the necessary or proper use of them by others in the same locality or business.
* * *
For us to construe it (the statute) in a manner which would create exclusive rights in geographic or generic terms would lead to absurd results, results of such scope that it can fairly be presumed they would have been expressly mentioned in the statute had the Legislature intended them.
We construe the name Investigative Services as being generic or descriptive of the business of providing services for investigative purposes. If this is correct, then it would appear that, absent additional facts, the names presented are not deceptively similar under the strict rule of Burnside Veneer Corp., supra. We stress that our opinion is absolutely and only based upon this strict rule, and note that a prior opinion of this office also felt compelled to yield, with apparent reluctance, to the Burnside rule. A copy of our prior opinion, OAG 79-391, is attached.