What is a trademark? A trademark is a word, phrase, symbol, or design (such as a business name or logo) that identifies the source of a product or service and distinguishes a brand from its competitors. Trademarks give owners of their marks protection from other businesses in the U.S. using those marks.
Preventing confusion in the marketplace is the primary purpose of trademarks. To obtain a trademark, you must file an application with the U.S. Patent and Trademark Office (USPTO).
If you’re still asking “what is a trademark?” read on for more details.
What Are the Benefits of Trademarking Your Business Name?
Filing a trademark prevents other businesses from using your business name as their own. It offers more extensive protection than registering your business name with the state.
When forming an LLC or incorporating a business, your name automatically receives protection in the state in which your company is registered. No other business may form an LLC or corporation with the same name (or one deceptively similar) in that state. The caveat, though, is a business operating as a sole proprietorship or partnership may use the name in the state—it just won’t be allowed to incorporate or register as an LLC under that name.
Relying on business entity formation alone to protect your name has another downside; it does not affect what happens in the states in which your business is not registered. That’s right. For example, if you’re registered as an LLC in California, some other business can form an LLC in New York using the same name. While that may not matter if you’re a local restaurant and won’t be competing for the same customers as the restaurant in New York, it will matter if you sell (or will potentially sell) products and services nationally.
That’s why I encourage business owners who are asking “what is a trademark?” to get help, see the importance of the filing and then consider trademarking their names. The owner of a trademark has exclusive rights to it—in all 50 states. By trademarking your business name, you’ll gain protection at the federal and state level from anyone else using that name.
How Do You Apply for a Trademark?
Before you apply for a trademark, do some research to make sure your business name (or something very similar) isn’t already under trademark protection or that another company doesn’t have a pending application with the USPTO.
You can use CorpNet’s free basic trademark search tool for that purpose. From there, I recommend conducting a comprehensive name search at the state and county level to determine if anyone has dibs on your proposed.
I also encourage you to enlist the help and expertise of a trademark attorney that can provide you with legal advice and make doubly sure your desired name is available.
I can’t stress enough how important it is to go through the name search process BEFORE you submit an application to the USPTO. Without that exercise, you might apply for a name that’s already in use. And if that’s the case, the USPTO will reject your application, and you’ll have lost the filing fee, not to mention the time you spent completing the application.
Expect to pay between $225 and $400 per class when applying for a trademark. Why the variance? The USPTO provides three different application options to choose from, with the primary difference being your readiness to submit a complete initial application and your willingness to conduct all correspondence electronically. If you hire someone to complete and submit the application for you, you’ll have some additional expense, as well. After you file your application, the USPTO will send you a receipt that marks your filing date. You may find it could take from nine to 12 months for the USPTO to process your trademark request. If your requested mark is complex or if issues surface during the review process, you might wait even longer. Although it costs a little more and takes longer than registering a business name, getting a trademark gives you exclusive rights to your business name throughout the United States. The peace of mind is priceless!
When Should You Apply for a Trademark?
Even if you haven’t started selling your products or services yet, you can take measures to protect your business name.
By filing an “intent to use” trademark application with the USPTO, you can reserve a trademark before you’re ready to launch your business. This can give you a head start rather than waiting to file an “actual use” trademark application, which applies when you are already using a mark in commerce.
The primary benefit of the intent to use application is that it regards your filing date as the “constructive use” date for establishing your rights to the mark. So, suppose you file an intent to use application on November 1, and another company files an actual use application on November 18. And then you start using your business name in commerce on December 1. You will be the owner of that trademark even though the other company began actively using it first.
I advise you to file an intent to use application only if you really do have a bona fide intention to use your business name in commerce. You must show objective evidence of your intention to use the mark. If you don’t, your application will be voided. The USPTO does this to prevent trademark trolls from trying to sit on the name and make money off of a legitimate business that wants to use it.
The fees are about the same for intent to use and actual use applications. With intent to use, however, you will also need to file and pay a fee for a statement of use after you start using the mark commercially.
You get six months to use your mark after you file your intent to use application. You can apply for an extension if you find you’ll need more time. With up to five possible six-month extensions from the USPTO, you have plenty of time to move forward with your business after your initial filing.
Although an intent to use trademark application and possible extension requests may seem like a hassle, realize that you can never know when some other business in the making thinks of the same awesome business name. If you don’t start using the name (or applying for a trademark on it) before the other business does, you may be left scrambling to dream up another name for your company.
What do TM, SM, and ® Mean?
This is when the “what is a trademark” question gets down to the nitty gritty. Surely you’ve seen these symbols after business, product, and service names.
TM (sometimes referred to as “this is mine”) and SM are used to denote unregistered marks. These “common-law” trademark symbols may be used when you’re claiming ownership of the wording, symbol, or design—such as when you have a trademark application pending or even if you haven’t filed for an official trademark. Note that these informal trademarks potentially offer rights to your business name only in the geographic areas where you’re selling your products and services—they do not provide protection of your name on a national scale. Also, know that using these symbols does not totally guarantee your rights to the mark so you may have a tough time bringing legal action against another business if it uses a mark that’s identical or similar to yours.
As soon as the USPTO approves your trademark application, you may use the federal registration symbol “®” to identify your mark. That will protect your name in all 50 states, with the possible exception of geographic areas where a common-law trademark has been in effect. A critical word of advice: do not ever use the ® symbol (not even while your trademark application is pending) until your mark is officially approved and registered.
How Long Does a Trademark Last?
Provided that you fulfill the renewal requirements, your trademark will have an unlimited lifespan. Once approved, your trademark will be in effect for ten years—and then you can renew it for another ten years. There’s no limit on how many 10-year terms your trademark may have.
Your Brand Is Worth Protecting
Building brand recognition takes an enormous amount of time and energy. Wouldn’t it be wise to take responsible steps to make sure another business doesn’t infringe on your hard work and reputation? Don’t keep asking ‘what is a trademark’ without getting help and taking the proper steps to protect your brand.
Forming an LLC or incorporating your business in your state is just the first step in protecting your business name. To safeguard it more fully and extensively, I encourage you to consider filing for a trademark.
As I shared earlier, a trademark attorney can be an essential resource in answering your legal questions and offering guidance as you work toward protecting your business name. And remember, CorpNet is here to help you through the process, as well. Within 48 hours, we can prepare your trademark application so that you can submit your paperwork and filing fees to the USPTO as soon as possible. The sooner you file, the faster you’ll have the assurance that your business name won’t be swept out from under your feet. Contact us today!