Q: Can two businesses use similar names?

A: Your question involves two different issues: trademarks and the names of entities.

First, let's talk about trademark rights. The essence of a trademark is to identify the source of goods or services. Trademark infringement occurs when one mark used in connection with goods or services (whether or not the mark is the company's name) is likely to cause confusion or mistake about the source of the goods. In other words, if I use a mark in connection with goods that I manufacture that is similar enough to your trademark to cause people to mistake my goods for yours, then my mark infringes yours (or maybe yours infringes mine, depending on who acquired the rights first). Two marks do not have to be identical for one to infringe the other. However, I can use a trademark on my goods that is similar to your mark if the goods that I produce and sell are very different from the goods that you produce and sell simply because there is no likelihood that people will be misled into thinking that you are the source of my goods or vice versa.

Now let's talk about company names. Generally, two companies organized in the same state cannot have names that are indistinguishable. The rules for deciding if two names are distinguishable vary a bit from state to state, but generally even a relatively small difference can make two names distinguishable. For example, Aftermath Cleanup Unit, LLC might be considered distinguishable from Aftermath Cleanup, LLC. As far as I know, there are no states in which the Secretary of State (or equivalent state official) considers trademark rights in deciding whether two company names are distinguishable. So it would be entirely possible for one company to have a name that infringes the trademark rights of another. In addition, a Secretary of State or equivalent official considers only other companies that are organized in that particular state (and probably companies that are organized in another state but registered to do business in that particular state). So it is entirely possible for two companies, organized in two different states, to have identical names. However, the Secretary of State does not consider the type of goods or services the new company will sell. That means you may be precluded from using a name for your company because it is indistinguishable from the name of another company, even if no trademark infringement would occur because there is no chance that the goods or services of one company would be confused with the goods or services of the other.

That's why it is not enough to check the Secretary of State's records to see if the name you want to use for your new company is available in that state. You should also consider whether the name you want to use may infringe someone else's trademark, and that's a very different inquiry.

All that being said, I cannot advise you if your company name infringes a trademark of the company that contacted you, but because trademark infringement can result in significant liability, you should take the claim seriously and contact a lawyer who practices trademark law.