We selected a clip below from HBO's Silicon Valley. A group of tech entrepreneurs start a company that quickly compresses data without sacrificing quality to the benefit of cloud storage. They called it Pied Piper, but unfortunately there was a company already called Pied Piper in California. The owner confronts the startup.
In North Carolina, another entity may sue for unfair competition or trade name infringement if your business chooses a name so similar to another's that it could conceivably deceive or confuse the public. The name your entity chooses must therefore be distinguishable upon the records of the Secretary of State from the name of any domestic corporation or the name of any foreign corporation authorized to transact business or conduct affairs in North Carolina, a corporate name reserved or registered, or a name used, reserved, or registered by a domestic or foreign, nonprofit organization, limited liability company, a limited partnership, or a limited liability partnership.
This is also why it's important to trademark and register certain names with the Secretary of State. It can substantially reduce the likelihood that occurrences such as the one above will happen. The Secretary of State's website contains a record search function where you can search for similar names that might result in a denial of your chosen name. In the end, Pied Piper resolved this matter when the company obtained written consent from the already established entity to use the name. In the show, that cost Pied Piper $1,000, but in reality that expense could be significantly higher.