Although the phrases trade name and trademark may appear to be interchangeable, it is critical for business owners, particularly those in the early stages of their venture, to understand the differences. Selecting and registering trade names and trademarks is an important component of building a company’s and its goods’ brand visibility and awareness in the marketplace, thus it’s a process that should be carefully examined. The law distinguishes between the two: a trade name relates to a company’s formal name, but a trademark provides legal protection to a company’s brand. While they may not be identical, businesses should avoid picking trade names that are too similar to a registered trademark because this could result in a lawsuit.
Trade Name
A trade name is an official name under which alone an owner or a corporation decides to conduct business. Doing business as (DBA) is another term for a trade name. While legally registering a trade name is a vital stage in a company’s branding, it does not grant the company an infinite brand name or legal protection for its use. The regulations for registering a trade name vary by state, but most states involve registration with the state government or a county clerk’s office. The primary objective of registering a trade name is for administrative and accounting considerations, such as filing a company tax return with the Internal Revenue Service (IRS), which is separate from your tax return.
The website of the Small Business Administration (SBA) has a search engine for each state’s specific trade name registration requirements. Trade name registration laws are more concerned with informing tax collecting agencies about your business than with offering any meaningful brand name protection. In many places, registering a trade name does not preclude someone else from doing business under that name, which is why you can see more than one Joe’s Painting and Roofing company operating in various cities within the same state.
Although registering a trade name does not provide the same legal protection as registering a trademark, it is still important to choose a trade name carefully. This is because it is the first stage in developing your company’s identity in the marketplace. As previously stated, registering a trade name does not grant you trademark rights; trademark registration is a distinct process.
A trade name does not grant companies trademark rights, which are obtained through a separate process.
Trademark
A trademark is a more substantial step in developing brand awareness in the marketplace. A trademark can be part of or related to your company name, and it can be used to give legal protection for the use of names, logos, symbols, or slogans. Nike’s swoosh emblem and Coca-“Coca-Cola” Cola’s printed in its characteristic style are two well-known trademarks. The trademark symbol—TM—accompanies trademarks, making them identifiable.
A trademark must be registered separately from a business name, and this must be done at the federal level rather than the state level. The registration of a trademark ensures that an individual or business has exclusive use of the trademark, establishes legally that the trademark was not already being used by another business entity before your registration, and provides official government protection against any other business infringing on your registered trademark in the future. It also protects you from legal culpability if someone later accuses you of infringing on a previously registered brand.
You or your company can register a trademark on your own, or you can hire a lawyer who specializes in intellectual property law or trademark registration to do it for you. Having an intellectual property lawyer manage the registration adds an extra layer of assurance that everything is done correctly and thoroughly and that a thorough investigation has been conducted to ensure the brand hasn’t been registered by anybody else. Even though the majority of states follow the criteria of the Lanham Act—also known as the Trademark Act of 1946—that controls federal trademark requirements, it is usual practice to register a trademark at the state level in addition to meeting federal trademark registration requirements.