Why Trademarks are Important when Choosing a Business Name

october 20, 2020 | small business
Business woman

A Business Name Isn’t A Trademark

Finding the right business name means considering what names you can legally use and protect. Choosing the wrong name to trademark is expensive from rebranding and refiling costs to costly litigation around using another company’s name.

Business Names and Trademarks

Two things that you need to be aware of as a business owner are business names and trademarks. As a business owner, you will consider a business name and potentially a trademark when launching your company. The process isn’t as simple as landing on the right name and getting to work on your logo and finding a good URL for the website. Instead, you should work with an attorney to do a search within your state and also across the country, if you plan to do business nationally. Before you can register the business name with the appropriate Secretary of State, you must check that the name you’ve chosen is available and not in use by another business. And even registering your unique name with the state isn’t the final step for protection from copycats; to ensure your rights, you have to file for trademark protection.

The Differences Between Protecting a Business Name and a Trademark

What differentiates a business name and a trademark is time and complexity. A business name is a very simple matter. After all, it’s just that: a name, so that others can identify you and your business. As a trademark is intellectual property protection and has value, it requires a more complex process.

The application process, whereby your trademark would be registered with the federal government, can take six months, or even longer. Part of why it takes so long is that there is so much more to look into with a trademark, given the possibility of similar, conflicting marks. The goal of a trademark is to protect consumers from confusion over two names that sound or logos that look alike. Your attorney will do a trademark search to see if there are similar marks already registered or in use as common law trademarks that might cause your application to be delayed or rejected.

Another important difference is the scope of protection. The protection of a business name is just in the state where it is registered. Different states have different rules about just how unique a business name has to be from any others that are registered in the state. In some, a subtle difference is enough, while in others there are much tougher guidelines to keep names from being too similar. Either way, a business name in one state does not have to differ from names that are registered in other states. By registering with the Secretary of State, no other business in the state can use that name, but other businesses in other states can use that name. And it’s even possible for corporations to use a name that’s already claimed in a particular state so long as they file a DBA, assumed business name, or trade name (which one will depend on the state, of course).

With a trademark, you have exclusive property protection rights. If you own a federal trademark, then you can prevent anyone else from using it—anywhere in the US —and trademarks can be used to protect not only business names but also logos, phrases, symbols, designs, images, or any combination thereof you use in your business. What you trademark, called the mark, must be different from any other mark owned and registered by anyone else for that type of business (called a class). Depending on the mark, it might be enough to change design elements such as fonts, colors, and images to keep the marks from being deceptively similar—as long as a mark does not decrease the value of an existing mark or cause confusion among consumers about the identity of the different marks.

You should work with an attorney to apply with the US Patent and Trademark Office, which initiates an examination period lasting up to and beyond six months. After the examination period, where a number of procedural and substantive questions are studied and taken care of, your trademark then enters the next stage: a 30-day waiting period. During this period, other parties can challenge the proposed trademark by initiating an Opposition Proceeding. If you get through the waiting period and no challenges have been substantiated, then, the trademark is registered. The protection is not automatically forever, instead, there are filings over the years to continue to keep the trademark.  A final caution is that DIY for trademarks is not recommended because if you make any mistakes, you must refile and pay all the fees again.

Federal Tax ID

Another important step for your business is getting a Federal Tax ID number, or an Employer Identification Number (EIN) to go with your business name. Whether you are a sole proprietor or operate as an LLC or corporation, you need an EIN to legally conduct business. The IRS uses the EIN as a way to identify a business entity. Fortunately, an EIN is part of the Launch product.

Get Started Today

An EIN is included when you form your business with Launch by LegalShield and you can have help with your trademarks from an attorney with your SMB plan. Learn more about Launch.

LegalShield provides access to legal services offered by a network of provider law firms to LegalShield Members through member-based participation. Neither LegalShield nor its officers, employees or sales associates directly or indirectly provide legal services, representation or advice. See a plan contract for specific state of residence for complete terms, coverage, amounts, and conditions. This is not intended to be legal advice. Please contact an attorney for legal advice or assistance.If you are a LegalShield member, you should contact your Provider Law Firm.

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