By Nellie Akalp
Do you ever wonder what will prevent another company from using your same name? Or if you’re legally permitted to use the name you picked for your business? If you’re a small business owner, read on to learn about the trademark, and most importantly, if you need one for your business.
First, some basics. A trademark is a word, phrase, symbol or design (or a combination of any of these) that identifies the source of a product or service and distinguishes it from competitors. Trademarks are managed by the U.S. Patent and Trademark Office (USPTO).
When it comes to trademarks and protecting your name, there are two key steps. First, before you settle on any name, you should confirm that it’s available to use and that you won’t be taking someone else’s name. Second, you should consider trademarking to protect anyone from using your name.
Make sure the name is available to use
Before you start ordering business cards and launching your website, you need to make sure your name is available. No one wants to find themselves on the wrong end of a trademark dispute. There could be punitive damages and legal fees to pay ⎯ and you may be ordered to stop using your company name immediately.
- Before you incorporate or register your business with your state, you’ll need to check the state’s database of company names and make sure the name you want isn’t already in use.
- At this point, you should also conduct a free trademark search to check if your business name is available to use at the federal level.
It’s also important to know that you can still infringe on someone else’s mark even if they’ve never formally registered it with the USPTO. For this reason, you should also run a comprehensive nationwide trademark search into state and local databases (beyond just your own state). This should include common law and county registrars.
Do you need to trademark your name?
When you incorporate or form an LLC for your new business, this process registers your business name with your state’s secretary of state. Before approving your application, the state checks that your name is distinguishable from all other business names registered in the state (just in case you didn’t search yourself). Once approved, the business name is yours, and yours alone, to use within the state. This protects anyone else from using your name within your state, but it doesn’t offer any kind of protection in the other 49 states.
Of course, if you’re not planning on incorporating or forming an LLC, you can still register a business name using a DBA (Doing Business As), also known as a Fictitious Business Name. It’s the easiest type of registration and is done through your county government offices.
If you’ve started a business that’s physically tied to your state (i.e. a hair salon or restaurant) and have no plans on expanding into other states, registering your name with the state or county might be enough brand protection for you. However, if you’re planning on conducting business outside your own state (i.e. you sell a product or you provide services and some of your clients may live elsewhere), you should look into trademark protection.
Register a trademark with the federal government
You’re not actually required by law to register a trademark. Use of a name instantly gives you common law rights as an owner, even without formal registration. However, registering a trademark offers a few advantages:
Trademarks registered with the USPTO enjoy significantly stronger protection than “common law” marks (aka unregistered marks). When you register a trademark, it’s exponentially easier for you to recover your properties…for example, if someone happens to using a close variation of your domain name or is using your company name as their Twitter handle.
A trademark is property. It has value and can be sold as a corporate asset.
To register your business name, you’ll need to file an application with the USPTO. Expect to pay approximately $325 per class in application fees that your mark would fall under and the process can take anywhere from 6-12 months once you submit your application. It’s smart to perform a comprehensive trademark search before starting the application process. Why? If your selected name turns out not to be available, your application will be rejected. You’ll lose your application fee, not to mention any time invested in the application.
While the process of registering a trademark is more involved than registering a DBA, rights to your name will be enforced by both the federal and state governments.
As you’re getting your company off the ground, remember that your name represents your brand and business, so take the right steps up front to protect your identity.
Nellie Akalp is the CEO of CorpNet.com, an online legal document filing service, where she helps entrepreneurs Incorporate or Form an LLC for their new businesses.