Strategizing and formulating the most suitable brand name matters in a business entity. In the legal landscape, you have two best options to strengthen your brand: getting a trademark or obtaining a trade name. These two concepts should not be interchanged – both have unique purposes, goals, and nature.
However, most young companies, when tasked to distinguish between a trademark and a brand name, have tendencies to arrive in a misconception. The worst case of misconception between a business name and a trademark will lead to expensive legal costs such as trademark infringement.
Are you planning to start a business? Have you prepared for the name of your business? Then start your game at a smooth pace. This article will draw you the line between a brand name and a trademark.
What is a Business Name?
In a simple definition, a business name is the legal name of the company. It is the name reflected on the legal documents, government forms, and business applications.
Furthermore, your business’ legal name depends on the nature and structure of your business – whether you operate in a sole proprietorship, general partnership, or in LLCs and corporations.
Sole Proprietorship
Under a sole proprietorship, your business name is your full legal name. You have the discretion to add description or flowery words. But your full name should always remain in as your business name.
General Partnership
The business name of a general partnership is reflected and written in its partnership agreement. As a general rule, if there’s no agreed name, then owners’ last names will automatically serve as their business name.
Limited Partnerships, LLCs, and Corporations
Here, the Articles of Incorporation will establish the legal business name. It is not necessary to include the owners’ last names – it’s up to their discretion on how to create a business name.
What is a Trade Name? How does it work?
A trade name is the second official name of a business, functioning as the nickname of your company. Although it affords no brand protection, trade name is the key to your market branding.
For instance, Pizza Hut, Taco Bell, and KFC are some of the best fast-food chain brands that people know. However, they work only as a trade name because such brands are under the business name of YUM! Brands – one of the leading American food companies.
What is a Trademark?
A trademark is any word, slogan, tagline, design, logo, or the combination of elements, that distinguishes the sources of goods through a distinctive mark. It helps a business to get a unique distinction against others by their registered marks.
Unlike a business name, a trademark doesn’t have to be incorporated by a business legal structure. It only helps in the marketing and branding of business goods so that customers won’t be confused as to the source of their interests.
Why is it important to distinguish a Business Name from a Trademark?
It is important to distinguish a Business Name from a Trademark to avoid further trademark infringement. Some businesses have experienced trademark violations because they identified their business name as their source of goods.
As a general rule, you can only identify goods and services once you distinguish your brand as a mark. Business names have different functions with a trademark, simply because the former represents a company name while the latter distinguishes goods against other market sources.
If you are planning to create a trademark your business name, get your free trademark consultation in Bold Patents where the best and world-class trademark lawyers can assist you.
Can I register my business name as a trademark?
Yes, you can register your business name as a trademark under a certain condition that it infringes no existing and registered trademarks. The USPTO suggests that the more distinctive your name is, the easier it is to obtain a business name as your trademark.
How does a Business Name differ from a Trademark?
Business Name can be a form of a trademark. Likewise, a trademark can be a business name. While it is true that both have mutual interdependence, there is a gap between a business name and a trademark name – in terms of the registration process and the limitation of use.
Registration Process
Business Name
There are three ways to register a business name:
First, by creating a DBA or “Doing Business As.” DBA will help register your trade name. You only need to comply with the legal requirement and a business account to register a business name.
Second, by creating a business structure. Particularly in LLC or corporation, the business’ articles of incorporation or articles of organization will register the name with the state. Meaning, it automatically registered as a business name.
Third, by filing a trademark registration. You will always have the option to make your business name as your intellectual property. Here, the protection you need will expand since you identify your business name as your source of goods.
Trademark
Similar to patenting an idea, a trademark protection guarantees legal rights to an owner in the exploitation and use of the registered mark. In the trademark application, the registration process is linear and simple.
After your trademark attorney conducted a successful trademark study, you only need to file the trademark application online through the Trademark Electronic Application System (TEAS). Your trademark attorney will help you with USPTO reviews applications, the legal fees, and among others.
Geographical scope of protection
Business Name
State entity registration is the guaranteed legal protection for business names. It gives a business name to legally transact all forms of businesses within the state premises. In other words, when you plan for a market expansion, state entity registration won’t afford any protection in cases of trademark infringement of your business during a market expansion.
Trademark
Unlike a business name, trademarks can guarantee legal protection against other infringers. As it functions as an intellectual property, you have the right to sue anyone who exploits or uses your existing trademark – especially during market expansion.
Hence, if you’re planning to market your brand outside of your locality, make sure to register your brand as a trademark so that customers can directly identify your sources of goods.
Key Takeaways
Strategizing and formulating the most suitable brand name equate to a successful business. In the legal landscape, you have two best options to strengthen your brand: getting a trademark or obtaining a trade name.
A business name is the business’ legal name. It reflects the type of business structure you set up – whether in a sole partnership, a general partnership, or corporations. Hence, it is the name used in legal documents, government forms, and other related formal transactions.
However, your business can be viewed informally through your trade name. Your trade name serves as your nickname which most of your customers will recognize and remember.
On the other hand, a trademark serves as an intellectual property, protecting any word, slogan, logo, designs, or any combinations of elements, to distinguish sources of goods against market competitors.
What are the differences between a business name and a trademark?
(1) Registration Process
(2) Geographical Scope of Protection
More importantly, knowing the difference between a business name and a trademark will avoid further trademark infringement. In most cases, some businesses identified their goods using their business name, without having them as trademark. Remember, a business name only represents the company’s name, and a trademark protects the intellectual property of goods in the market.
Indeed, a comprehensive understanding of the differences between a business name and a trademark amounts to a smooth pace of marketing your brand!