What’s the Difference Between a Registered Business Name and a Trademark?
One of the first decisions new entrepreneurs make is what they will call their business. A lot, including brand recognition, rides on a business name, so naturally, it’s something business owners want to consider carefully.
On occasion, people have asked me how a business name and trademark are different. Generally speaking:
- A business name is just that, a name a company calls itself and by which the public recognizes it.
- A trademark, as defined by the U.S. Patent and Trademark Office (USPTO), is “a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others.”
To essentially own a business name and safeguard against other companies using the same name, a business can register the name officially with the state(s) where it operates. It might also apply for a trademark to further protect the name.
In this article, I’m going to explain the nuances of each.
1. Register a Business Name
When someone forms a limited liability company (LLC) or incorporates their business, the company’s business name becomes protected in that state. So, upon submission and approval of the business’s Articles of Organization (LLC) or Articles of Incorporation (corporation) to establish the business entity, the state will not allow other LLCs or corporations to use the name within its jurisdiction. However, if the type of business and industry are different enough, another company might get state approval to use the same name. States’ laws have varying guidelines on how different a name must be from other business names within the state. The purpose of restricting similar name use is to curtail deceptively similar business names from causing confusion in the marketplace and creating unfair competition.
I must stress that registering a business only prevents other LLCs and corporations from using a business name. Sole proprietorships or partnerships may conduct business using the name that an LLC or corporation has registered. Although they cannot form an LLC or incorporate using the name, they might still file a DBA (a.k.a., “fictitious name,” “assumed name,” or “trade name”) to use the name legally in the state.
Another point to consider is that a state-registered business name only offers protection within that state. Companies in other states may use the name even if they operate similar businesses. This might not pose an issue for businesses that offer localized products or services, such as a small landscaping company. However, a business that conducts business online (like CorpNet, for example) or plans to expand its operations into other states may want to seek more extensive name protection by applying for a trademark.
The USPTO’s website explains why: “…a state’s authorization to form a business with a particular name does not also give you trademark rights and other parties could later try to prevent your use of the business name if they believe a likelihood of confusion exists with their trademarks.”
2. Trademark a Business Name
A registered trademark protects a company’s name across the entire United States. It prevents other companies that offer similar goods and services from using the same (or very similar) name. Specifically, a “trademark” identifies the source of goods, while a “service mark” identifies the source of services. However, the USPTO often uses the term “trademark” when referring to service marks, too.
When the USPTO grants a registered trademark for a business name, the owner has exclusive rights—at the state and federal levels—to use it. No other businesses (including LLCs, corporations, sole proprietorships, partnerships, or other entity types) may sell similar goods and services under that business name in any of the 50 states.
Note that the primary purpose of trademarks is to prevent confusion in the marketplace. So, trademark protection applies to only the particular category(ies) of goods and services for which approval was given. For example, if someone trademarked their marketing consulting firm’s business name, “Top Dog Solutions,” another entrepreneur would likely be allowed to start a pet sitting business that uses that same name. Because the types of services those companies provide are so different, it would be highly unlikely for anyone to mistake the companies for each other, even though they use the same name.
First Things First – Do a Name and Trademark Search
It’s vital to confirm that the desired name is available before applying to use it as a registered business name or trademark. State and federal application fees are nonrefundable, so it’s wise to do some research before submitting forms. Most states have online databases entrepreneurs can use to see if anyone else has claimed a name. The USPTO has a Trademark Electronic Search System (TESS) that allows people to search for registered trademarks and pending applications that might conflict with the desired name. Also, CorpNet offers free and advanced corporate name search and trademark search tools to help business owners verify if their name is available at all levels. For legal advice on whether a name might conflict with another name or trademark, entrepreneurs can benefit from speaking with a trademark attorney.
How to Apply for a Trademark
Trademark applications must be filed online using the Trademark Electronic Application System (TEAS). To access the TEAS, first set up an account at USPTO.gov.
Trademark application costs depend on which filing option the business owner selects:
- TEAS Plus – $225 per class of goods and services (This option has a lower fee but more requirements.)
- TEAS Standard – $275 per class of goods and services (This option has a higher filing fee but fewer requirements.)
Entrepreneurs may handle the application on their own. To ensure the form is completed and filed accurately, they might consider paying their attorney for assistance. A very affordable way to get professional help and peace of mind is to have CorpNet prepare and submit your trademark application.
I must emphasize that submitting a trademark application does not guarantee registration. Applying to register a trademark begins a legal process. The USPTO examines applications to verify that prospective trademarks meet federal registration requirements and are free from legal issues that may bar them from registration.
Also, realize that having a trademark approved takes time—from almost one year to several years. The mark’s complexity and any issues that arise during the USPTO’s review process affect the timeline.
Upon the USPTO’s approval of a trademark, the mark will be effective for ten years. If the mark’s owner complies with all legal requirements for maintaining it, a trademark can be renewed for an unlimited number of consecutive 10-year periods.
How Does a Business Show It Has a Trademark?
When a business intends to apply for a trademark or has a registered trademark, using a mark with the business name can help signal to other businesses that the name has been claimed.
According to the USPTO website, “Each time you use your mark, it is best to use a designation with it. If registered, use an ® after the mark. If not yet registered, use TM for goods or SM for services, to indicate that you have adopted this as a trademark or service mark, respectively, regardless of whether you have filed an application with the USPTO.”
Keep in mind that the TM or SM identifies that a business has stated ownership of the wording, symbol, or design. However, the business may have difficulty legally challenging another party for rights to the name if it hasn’t officially registered the trademark with the USPTO.
Is Registration with the USPTO Mandatory?
The USPTO shares that not all trademarks require registration. “You can establish ‘common law’ rights in a mark based solely on use of the mark in commerce, without a registration. However, federal registration of a trademark with the USPTO has several advantages, including a notice to the public of the registrant’s claim of ownership of the mark, a legal presumption of ownership nationwide, and the exclusive right to use the mark on or in connection with the goods or services set forth in the registration.”
So, while using a business name as a trademark may be enough in some instances to prevent others from using it, only trademark registration with the USPTO provides the full range of legal protections. In short, without registering a trademark, an entrepreneur may have their rights to a name challenged. That could have a devastating impact on the business if a court rules that it may no longer use the name. Besides the potential damage to brand recognition, consider all of the signage, marketing materials, and other assets that would need to be changed.
For more information about trademark protection and the USPTO’s process, I encourage you to read the agency’s “Basic Facts About Trademarks” guide.
Ready to Secure Your Business Name with a Trademark?
The CorpNet team is here to help with business name registrations, trademarks, and more!
Contact us for help with all aspects of choosing a business name, registering your business, and applying for a trademark.
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