By Nellie Akalp
A company’s business name is among one of its most powerful branding assets. And as with other business assets, it’s wise to protect it. If a business owner fails to do so, they run the risk of another company using the name. That can potentially confuse customers and create legal issues.
Formally registering a business as an LLC or corporation will offer some protection of the name. However, it’s not as extensive as the protection a trademark provides.
How registering as an LLC or corporation protects a business name
When someone registers their LLC or corporation by submitting Articles of Organization or Articles of Incorporation to the state, the company’s business name becomes protected in that state. That means the state will not allow other LLCs or corporations to use the name (although it may allow it if the type of business and industry are different enough so that it won’t confuse the public).
That provides some peace of mind, for sure, but there’s still the chance that a business operating as a sole proprietorship or partnership might use the name in the state. Although those business owners will not be able to register the name as an LLC or corporation, they might still file it as a DBA (“Doing Business As,” also known as a “fictitious name”). So, they could conceivably offer similar products and services within the market—even within the same county or town.
Also, registering as an LLC or corporation won’t prevent other business entities in the other 49 states from using the name. For example, suppose an entrepreneur registers their business name, “Elsa’s Gift Emporium,” for an LLC in Illinois. In that case, little prevents another entrepreneur in Tennessee from establishing an LLC or corporation with that name.
The business name protection at the state level may be sufficient for a company, or it may not. It depends on whether the business owner plans to expand the company into other states and the potential effects if another company were to use the same name. For instance, if someone starts a pet-sitting services business serving customers within a 30-mile radius of their home office, they probably won’t care if another pet-sitting company in a different state uses the same name.
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But what if you have your sights set on growing your business into other states or sell products online and compete with other companies across the United States which also sell online? Those are examples of scenarios when federal trademark protection is worth exploring.
Advantages of trademarking a business name
The U.S. Patent and Trademark Office (USPTO), the federal office that grants trademarks, explains that “a trademark or service mark includes any word, name, symbol, device, or any combination, used or intended to be used to identify and distinguish the goods/services of one seller or provider from those of others, and to indicate the source of the goods/services.” In short, trademarks help to distinguish brands from their competitors.
What’s the difference between a “trademark” and a “service mark”? Essentially, they’re the same, except that a trademark identifies the source of goods, while a service mark identifies the source of services. The USPTO often uses the term “trademark” when referring to either trademarks or service marks.
When the USPTO approves a business name as a registered trademark, the owner has exclusive rights—at the state and federal level—to use the name. A trademark prevents anyone else from selling similar goods and services within the United States under that business name.
The primary purpose of trademarks is to prevent confusion in the marketplace, so the protection applies to only a particular category of goods and services. For example, if someone trademarked their photography studio’s name, “Best of Times,” another entrepreneur would likely be allowed to start a restaurant that uses that same name.
How do you apply for a trademark?
Before submitting an application to the USPTO, it’s vital to search the internet and federal and state trademark databases to ensure no other business has claimed the name legally. In addition to the USPTO and states’ websites, other business name search and trademark search tools are available online. A trademark attorney can also help verify that the mark is available and likely to be approved by the USPTO.
The USPTO requires that trademark applications be filed online using the Trademark Electronic Application System (TEAS), which requires setting up an account at USPTO.gov. Filing costs depend on which filing option the business owner chooses:
- TEAS Plus: $225 per class of goods/services
- TEAS Standard: $275 per class of goods/services
Entrepreneurs may consider asking their attorney to prepare and file the application on their behalf or enlist the help of an online business document filing company to ensure the form is completed and submitted correctly.
The time it takes to have a trademark approved may range from almost one year to several years, depending on the mark’s complexity and any issues that arise during the USPTO’s review process.
Once a trademark receives approval, it will be effective for 10 years. As long as its owner complies with all legal requirements, a trademark can potentially be renewed for an unlimited number of consecutive 10-year periods.
According to the USPTO website, “Each time you use your mark, it is best to use a designation with it. If registered, use an ® after the mark. If not yet registered, use TM for goods or SM for services, to indicate that you have adopted this as a trademark or service mark, respectively, regardless of whether you have filed an application with the USPTO.”
Using TM or SM identifies to other business owners that you’re stating ownership of the wording, symbol, or design. However, without officially registering to trademark the business name with the USPTO, you may have difficulty enacting legal action against another party if they use a name that’s the same or very similar.
Where to turn for more information and help with trademarks?
To learn more about trademarks, I encourage you to refer to the USPTO’s digital booklet that contains basic facts about trademarks, considerations for selecting a mark, the application process, fees, and much more. Also, consider asking a licensed attorney to help you determine if your desired mark can be legally protected and guide you in understanding how to maintain, monitor, and protect your mark.
Your business name is a critical component of your brand, so take protecting that valuable marketing asset seriously.
Nellie Akalp is Founder and CEO of CorpNet.com, a trusted resource and service provider for business incorporation, LLC filings, and corporate compliance services in all 50 states. See Nellie’s articles and full bio at AllBusiness.com.
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This article was originally published on AllBusiness.