Trade Name vs. Trademark – Overview
The terms trade name and trademark sound similar, but it is important that business owners, especially those in the early start-up phase, know the difference. Selecting and registering trade names and trademarks is an important part of establishing a brand’s presence and recognition in the marketplace for a company and its products, so it is a process that must be carefully considered. The law makes a definite distinction between the two: a trade name refers to the official name of the company, while a trademark provides legal protection to the company’s brand. While they may not be the same, companies should avoid choosing trade names that are too close to a trademark, as this could expose the owners to potential lawsuit.
- Trade names and trademarks are clearly different from a legal perspective.
- A trade name is an official name under which a person or company conducts business.
- A trademark offers companies legal protection for a particular trademark, which may be associated with a trade name.
A business name is the official name under which a person, as a sole proprietor or company, chooses to do business. A trade name is commonly known as a trade name like (DBA). Registering a business name legally is an important step in branding a business, but it does not provide unlimited brand name or legal protection for the use of the name. State laws vary in the requirements for registering a business name, but most states require registration either with the state government or through the county clerk’s office. The practical function of registering a business name is primarily for administrative and accounting purposes, such as filing a corporate tax return with the Internal Revenue Service (IRS), which is in addition to your personal income tax return.
The Small Business Administration (SBA) website provides a search tool for specific business name registration requirements in each state. The registration requirements for business names are more geared towards keeping tax collection agencies on top of your business rather than providing substantial trademark protection. In many states, registering a business name does not prevent anyone else from operating a business under the same business name, which explains why you may find more than one business called Joe’s Painting and Roofing operating in different cities in the same state.
Although the registration of a trade name does not provide legal protection in the same way that the registration of a trade mark does, the selection of a trade name must be done carefully. That’s because it is the initial step in establishing an identity for your company in the marketplace. As noted above, registering a trade name does not give you trademark rights, it is a separate process.
A trade name does not give companies trademark rights, which is a completely different process.
A trademark is a more significant step identified with establishing brand recognition in the marketplace. A trademark may be associated with or part of your trade name and may be used to provide legal protection for the use of company names, logos, symbols, or slogans. Two examples of easily recognizable trademarks are the Nike swoosh symbol and Coke’s “Coca-Cola” written in distinctive script. Trademarks are easily recognized as they are accompanied by the trademark symbol— ™.
A trademark requires separate registration from the trade name, and this must be done at the federal level and not just at the state level. The registration of a trademark guarantees an individual or company the exclusive use of the trademark, legally establishes that the trademark was not being used by any other commercial entity prior to its registration, and provides official protection to the government against any other company that later infringe. in its trademark. It also provides legal liability protection against someone who later claims that they are infringing a trademark in the past.
When registering a trademark, you or your company can directly register the trademark, or you can choose to have an attorney who handles copyright law or trademark registration do it for you. Having an intellectual property attorney handle the registration provides an additional layer of assurance that the registration is being done properly and completely and that a thorough investigation has been conducted to verify that the trademark has not been previously registered by anyone else. person or company.
It is common practice to register a trademark at the state level in addition to complying with federal trademark registration requirements, although most states follow the guidelines of the Lanham Act, also known as the Trademark Act of 1946, which governs the federal trademark requirements.