The Difference Between a Trade Name and a Trademark - And Why You Can’t Overlook Either
When it comes to starting a business, there’s often some confusion about the process of business name registration. How are trade names and trademarks different? Does a trade name afford any legal branding protection? Can your trade name be the same as your trademark?
When it comes to starting a business, there’s often some confusion about the process of business name registration. How are trade names and trademarks different? Does a trade name afford any legal branding protection? Can your trade name be the same as your trademark?Simply put, a trade name is the official name under which a company does business. It is also known as a “doing business as” name, assumed name, or fictitious name. A trade name does not afford any brand name protection or provide you with unlimited rights for the use of that name. However, registering a trade name is an important step for some – but not all – businesses (more on this below).
A trademark is used to protect your brand name and can also be associated with your trade name. A trademark can also protect symbols, logos and slogans. Your name is one of your most valuable business assets, so it’s worth protecting.
An important reason to distinguish between trade names and trademarks is that if a business starts to use its trade name to identify products and services, it could be perceived that the trade name is now functioning as a trademark, which could potentially infringe on existing trademarks.
To learn more about the role trade names and trademarks have in your business and how to apply for each, read on.
Registering a Trade Name
Naming your business is an important branding exercise. If you choose to name your business as anything other than your own personal name (i.e. a “trade name”), then you’ll need to register it with the appropriate authority as a “doing business as” (DBA) name.
Consider this scenario: John Smith sets up a painting business and chooses to name it “John Smith Painting.” Because “John Smith Paining” is considered a DBA name (or trade name), John will need to register it as a fictitious business name with a government agency.
You need a DBA in the following scenarios:
- Sole Proprietors or Partnerships – If you wish to start a business under any name other than your real one, you’ll need to register a DBA name so you can do business under the DBA name.
- Existing Corporations or LLCs – If your business is already incorporated and you want to do business under a different name, you will need to register a DBA.
Note that many sole proprietors maintain a DBA or trade name to give their business a professional image, yet still use their own name on tax forms and invoices.
Depending on where your business is located, you’ll need to register your DBA name through either your county clerk’s office or your state government. Note: Not all states require fictitious business names or DBA registration. SBA’s Business Name Registration page has more information about the process, plus links to the registration authorities in each state.
Registering Your Trademark
Choosing to register a trademark is up to you, but your business name and identity is one of its most valuable assets, so it’s worth protecting.
Registering a trademark guarantees exclusive use, establishes legally that your mark is not already being used, and provides government protection from any liability or infringement issues that may arise. Being cautious in the beginning can certainly save you trouble in the long run. You may choose to personally apply for trademark registration or hire an intellectual property lawyer to register for you.
Trademarks can be registered on both federal and state levels. Federal trademarks can be registered through the United States Patent and Trademark Office. Applications can be submitted online, by using the Trademark Electronic Application System (TEAS), or by requesting a hard copy application and mailing in a paper form. Although both methods are acceptable, filing online is a faster and more cost-effective process (less than $300).
Tip: Before you register, you’ll need to follow these steps:
- Determine whether your product is eligible for a trademark
- Conduct a trademark search using TESS (Trademark Electronic Search System)
Because it can be tricky to identify potential infringement or clashes, and the penalties for doing so are high, it’s worth talking to a good intellectual property lawyer to ensure you cover all bases.
As with trade names, registering a trademark at the state level varies from state to state. Check out the USPTO's State Trademark Information page for links to your state’s trademark office.
For a step-by-step guide to filing a trademark application, FAQs and more, refer to SBA.gov’s Small Business Guide to Intellectual Property.
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