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For instance, if a company wants to codename a processor microarchitecture after a hero from a MOBA game (eg. League of Legends, Heroes of the Storm, Battlerite, Dota 2), will a license be required?

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  • I rewrote my question to make it less confusing now.
    – user44968
    May 21, 2022 at 17:28

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Overview

There are two issues here.

First, is the name protected as a trademark?

Secondly, if it is protected, is the proposed use an infringement?

There is no copyright issue because names, like other short phrases, are not protected by copyright at all.

Trademark Protection?

As to the first issue, trademarks are words, phrases, images, and sounds used to identify represent, or promote products or services (hereafter "products" will mean both) in commerce (or trade). That means they are used to label or advertise products, or to indicate the source of products. Brand names, model names, product line names, logos, slogans, theme songs, and the like are all trademarks.

In the US trademarks gain some protection from such use, even if they are not registered. Contrawise, a trademark that is not being used in commerce can have any registration canceled after a five-year period of non-use.

Are the names of characters in games serving to identify or advertise those games? are they acting as trademarks? In some cases, yes, in many, no. If a particular name is not in fact acting as a trademark, then it will not have any trademark protection.

Trademark Infringement?

As to the second issue, there are several aspects to it.

For one thing, trademarks are normally only protected against use in the same general category of business. If "Pear" is a brand of computer, another computer maker will not be permitted to call its machines "Pears" without permission, but a maker of lawnmowers, say, could call its new line "Pear" with no legal problem.

(So-called "famous" or "widely known" marks get somewhat wider protections, but even for those it does not cover any possible use.)

Would the use of a "code name" for a new software or hardware product constitute use in the same category as a video game? Probably not.

For another thing, it is trademark infringement to use a mark without permission in a way likely to cause confutation with the product to which that mark is lawfully attached. It is also infringement to use the mark so as to suggest or cause people to assume that the product is sponsored, endorsed, or approved by the owner of the mark, or is made by the mark owner. A properly worded disclaimer can in many cases make it clear that no affiliation or approval is being claimed, and avoid infringement on such grounds. If no such claim is made or implied, and no confusion is intended or is likely, there is generally no infringement. Would use as described in the question imply or suggest such an affiliation, or cause people to believe that the new computer product comes from the makers of the game? probably not.

Conclusion

Thus while the answer in any given case would depend on the detailed facts of that case, I suspect that in most cases the situation described in the question would not constitute trademark infringement and would not require permission from the owners of any trademarks in the game.

Excess Care

All that said, most businesses tend to be risk-averse on such issues. Even if the chance of being found o be infringing a trademark mi quite low, the costs of an adverse judgement would be high, not just in damages owed, but in a need to change names and re-brand a product, and in possible negative publicity. For the matter of that, even a successful defense of trade mark suit has costs, not just in legal fees, but in time spent in documenting use and giving testimony by employees who could otherwise be working on the product.

Therefore, most businesses will be more careful than the law requires, to obviate even a small chance of an infringement suit. The benefit of a pop-culture reference is small compared to even a small chance of such a suit, even a losing suit. It is much easier to simply find a different name.

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    It should be noted that code names are frequently for internal use only. It's difficult to imagine that an internal code name could possibly infringe. For example, if Microsoft decided to use "oracle" as a code name (or the name of any other direct competitor), but never used it in external communications, there would be no trademark infringement.
    – phoog
    May 21, 2022 at 22:55
  • @phoog Quite true, but such "code names" have often enough been used externally, sometimes this happens to names originally intended for pure internal use. May 22, 2022 at 18:09

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