As an entrepreneur, you know that your business name is everything. It’s the first thing people notice and it’s what they remember long after doing business with you. But did you know that a business name isn’t necessarily the same as a trademark? Confused?
A business name is the name of your company or brand. It’s the name you use to identify your business, and it appears on your website, marketing materials, and products. While a trademark is a legal protection for your brand name and logo. It’s registered with the US Patent and Trademark Office, and it gives you exclusive rights to use your brand name and logo in commerce.
Business Name vs. Trademark
| Business Name | Trademark |
|---|---|
| A name under which a company does business with customers and the public. | A legally registered symbol, design, phrase, or word that distinguishes products or services from those of competitors. |
| Business names can be protected at a state level by registering with the Secretary of State, but generally do not provide nationwide protection. | Trademarks are protected by federal law and provide nationwide protection for the owner. |
| The ownership of a business name is established by common law usage, which means it is used in commerce and becomes associated with the business. | The ownership of a trademark is established by registration with the USPTO (United States Patent and Trademark Office). |
| The protection of a business name is indefinite as long as it is in use in commerce. | Trademarks can be protected indefinitely as long as they continue to be used in commerce and renewals are filed with the USPTO. |
| The protection for a business name is generally limited to the geographic area where the business operates. | Trademarks provide protection for the entire country and can be extended to international territories as well. |
| A business name can be used for any type of business activity or service without being restricted to specific goods or services. | A trademark is registered for specific goods or services and can only be used in connection with those goods or services. |
What is a business name?
A business name is the name of your company, while a trademark is a protected brand name or logo.
You can use your business name without registering it as a trademark, but if you want to protect it from being used by other businesses, you’ll need to register it as a trademark. Trademarks can be registered at the state or federal level.
For one, it gives you exclusive rights to use that name or logo. It also serves as notice to other businesses that you’re serious about protecting your brand.
What is a trademark?
A trademark is a word, phrase, symbol, or design that identifies and distinguishes the source of the goods of one party from those of others. A service mark is a word, phrase, symbol, or design that identifies and distinguishes the source of a service rather than goods. The term “trademark” is often used to refer to both trademarks and service marks.
There are two types of trademarks: (1) registered trademarks and (2) unregistered trademarks.
Registered trademarks are granted protection under federal law by the U.S. Patent and Trademark Office (USPTO). Unregistered trademarks are protected under state common law.
The owner of a trademark has the exclusive right to use the trademark in commerce in connection with the goods or services for which it is registered.
Advantages and disadvantages of registering a business name
Advantages of Registering a Business Name:
- Legal Protection: Registering a business name provides legal protection and prevents others from using the same name within the jurisdiction. It establishes your exclusive right to use the name for your business, helping you avoid potential legal conflicts and protecting your brand identity.
- Professionalism and Credibility: Registering a business name adds a level of professionalism and credibility to your business. It demonstrates that you are committed to operating as a legitimate entity and can enhance your reputation among customers, suppliers, and business partners.
- Branding and Marketing: A registered business name allows you to build a recognizable brand identity. It enables you to create marketing materials, establish a website, and develop a cohesive brand image that resonates with your target audience. A distinctive and registered business name can help differentiate your business in the market.
- Access to Financial Services: Registering a business name may facilitate access to financial services, such as business loans, credit lines, and partnerships with financial institutions. It can demonstrate your business’s stability and enhance your eligibility for financial support.
Disadvantages of Registering a Business Name:
- Cost and Administrative Burden: Registering a business name often incurs fees and ongoing renewal costs, depending on the jurisdiction. Additionally, the registration process may involve paperwork, legal requirements, and administrative tasks, which can be time-consuming and burdensome for business owners, especially in complex regulatory environments.
- Limited Geographical Protection: Registering a business name typically provides protection within a specific jurisdiction or region. If you plan to expand your business beyond that area, you may need to register your name separately in each new jurisdiction, incurring additional costs and administrative efforts.
- Lack of Privacy: Registering a business name requires making certain information publicly available, such as the business owner’s name and address. This can reduce personal privacy, as the registered information becomes accessible to the public, potentially leading to unwanted solicitations or privacy concerns.
- Naming Restrictions: When registering a business name, you may encounter restrictions or guidelines regarding name availability and naming conventions. Certain words, phrases, or terms may be prohibited, or a similar name might already be registered, limiting your options for choosing a desired business name.
Advantages and disadvantages of registering a trademark
Advantages of registering a trademark:
- A registered trademark gives your business exclusive rights to use that name in connection with your goods and services. This means that others cannot use the same or a similar name for their own businesses, preventing confusion and protecting your brand identity.
- A registered trademark can also be used as a valuable marketing tool, helping to promote and distinguish your business from competitors.
- Registering a trademark can give you additional legal protections if someone does try to use your business name without permission. You can take action against them and possibly recover damages.
Disadvantages of registering a trademark:
- The process of registering a trademark can be lengthy and expensive, particularly if you hire an attorney to help with the application.
- There is always the risk that your application will be rejected for some reason, such as if the USPTO deems your proposed name too similar to an existing trademark.
- Even if you are successful in registering your trademark, you may still face challenges from others who claim they have prior rights to the name or who argue that it is generic and should not be protected as a trademark
Requirements for registering a business name
- Your business must be registered with the state in which you plan to do business. This can be done by filing a DBA (Doing Business As) or LLC (Limited Liability Company) registration.
- You must have a physical address for your business. This can be your home address, but it must be a valid mailing address.
- You must have a registered agent in the state in which you are doing business. A registered agent is someone who agrees to receive legal documents on behalf of your company.
- You must have a Federal Tax ID number or an Employer Identification Number (EIN). This can be obtained from the IRS website.
Requirements for registering a trademark
- File a trademark application with the USPTO
- Include a fee for filing the application
- Include a drawing of the mark you wish to register
- Provide a detailed description of the goods or services associated with the mark
- Select the appropriate international class for your goods or services from the USPTO’s list of classes
- Indicate whether you want to register the mark for use in commerce or in connection with specific events or locations
Key differences between a business name and a trademark
- Definition:
- Business Name: A business name is an official name under which a company or business entity operates and conducts its activities. It identifies the entity and distinguishes it from other businesses.
- Trademark: A trademark is a legal protection that grants exclusive rights to use a particular name, logo, symbol, phrase, or design to identify and distinguish specific goods or services in the marketplace.
- Scope of Protection:
- Business Name: A business name provides limited protection and is primarily used for identification purposes within a specific jurisdiction (e.g., state or country). It does not automatically confer exclusive rights or prevent others from using a similar or identical name.
- Trademark: A trademark provides stronger and broader protection. It grants exclusive rights to the owner to use and protect the registered mark nationwide (or in the applicable jurisdiction). It offers legal remedies against unauthorized use or infringement by others.
- Registration Requirement:
- Business Name: Registering a business name may be required by local government authorities for regulatory and tax purposes. The registration process typically involves verifying name availability and filing the necessary documentation.
- Trademark: Registering a trademark is not mandatory but highly recommended to strengthen legal protection. Trademark registration involves a formal application process with the relevant intellectual property office (e.g., USPTO in the United States), including a thorough examination of the mark’s uniqueness and distinctiveness.
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Conclusion
A business name is a name under which a company does business with customers and the public, a trademark is a legally registered symbol, design, phrase, or word that distinguishes products or services from those of competitors. Business names can be protected at a state level but generally do not provide nationwide protection, whereas trademarks are protected by federal law and provide nationwide protection for the owner.
